EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801037
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Australian Paper Pty Limited applied for a TCO in respect of certain paper making machine rolls on 17 January 2008.
Instrument
TCO No 0801037 was made on 28 March 2008. It declares that those certain paper making machine rolls are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0801037 is taken to have come into force on 17 January 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0801037 was enacted in 2008 under the Customs Act 1901 to provide a lower rate of customs duty for certain goods, specifically paper making machine rolls, as applied to Australian Paper Pty Limited. The instrument was introduced to address the gap in the tariff system for goods that do not have substitutable products produced within Australia, thereby facilitating more competitive pricing and potentially stimulating import activities for these specific goods. This legislative measure was enacted by the Chief Executive Officer of Customs, following an application by the company and a determination that the application met the core criteria outlined in the Act. The policy objective of the Tariff Concession Instrument is to provide tariff relief for goods that are not produced domestically, thus encouraging importation and potentially enhancing market access and competition.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty to specified goods. A TCO can be applied for by any person concerning goods that are not listed in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The CEO evaluates applications against the core criteria outlined in section 269C, determining if no substitutable goods were produced in Australia at the time of application, as defined by section 269D. This particular legislation applies to goods such as the paper making machine rolls applied for by Australian Paper Pty Limited, which, upon meeting the core criteria, are subject to a concessional rate of customs duty. The geographic reach of the Act is national, as it applies across Australia, with the TCOs extending their application to the specific goods as declared by the CEO. The TCOs do not disadvantage any person other than the Commonwealth and do not impose liabilities on any person for actions taken before the registration date of the TCO.
Key Provisions
The Customs Act 1901 includes a scheme under which Tariff Concession Orders (TCOs) can be made, reducing customs duty rates on specified goods (s 269F). An application for a TCO must be made to the Chief Executive Officer of Customs (CEO) (s 269F), and the CEO will consider whether the application meets the core criteria (s 269C). A TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged (s 269C). If the CEO determines that the application meets these criteria, they must make a TCO (s 269P(3)).
The obligations imposed by the Act include the requirement for the CEO to consider applications for TCOs and determine whether they meet the core criteria. This includes ensuring that no substitutable goods were produced in Australia on the date of the application. The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (s 269K(1)). Additionally, the Act mandates that TCOs do not affect the rights of any person, other than the Commonwealth, as at the date of registration (s 269S(1)).
Failure to comply with the requirements of the Act can result in civil and criminal consequences. The precise nature of these consequences is not specified within the text of the Explanatory Statement, but they typically include penalties for non-compliance with the provisions of the Customs Act 1901. The penalties can range from fines to more severe criminal charges, depending on the severity of the breach. The maximum penalties would be determined by the relevant provisions of the Customs Act 1901 and any associated regulations.