EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802634
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.
Multix Pty Ltd applied for a TCO in respect of certain greaseproof paper on 14 February 2008.
Instrument
TCO No 0802634 was made on 02 May 2008. It declares that those certain greaseproof paper 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. 0802634 is taken to have come into force on 14 February 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to apply a lower rate of customs duty on specific goods. The purpose of the Act, particularly Part XVA, is to facilitate the application process for TCOs, ensuring that they are granted when certain criteria are met. These criteria, as outlined in sections 269C and 269D of the Act, include the absence of substitutable goods produced in Australia at the time of application. The introduction of TCOs aims to address economic inefficiencies by reducing the customs duty on imported goods, thereby making them more competitively priced in the Australian market. Instrument TCO No. 0802634, made on 2 May 2008, exemplifies this process by granting a tariff concession on certain greaseproof paper, lowering its duty from 5% to free, effective from 14 February 2008, the date of the application. The policy objective is to support industries by making essential imported goods more affordable without imposing any additional liabilities on individuals or entities.
Scope and Application
The Tariff Concession Order No. 0802634, issued under Part XVA of the Customs Act 1901, pertains to the application of tariff concessions on certain greaseproof paper. This instrument applies to Multix Pty Ltd, and the goods in question, which are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995. The scope of the legislation encompasses the application process for tariff concessions, where the Chief Executive Officer of Customs assesses whether the goods meet the core criteria for concession eligibility. Specifically, the Act applies to situations where no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The order benefits importers by granting a zero rate of customs duty on the specified greaseproof paper, whereas the general rate of duty for such goods is 5%. The geographical application of this Act is national, as it involves the administration of customs duties across Australia, subject to the terms and conditions specified in the Customs Act 1901 and its subordinate instruments. The order does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no existing liabilities are imposed and that the rights of importers are advantageously altered to allow for duty refunds on goods imported since the date the order came into effect.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to the Tariff Concession Instrument No. 0802634, revolve around the ability to apply for and receive a Tariff Concession Order (TCO) for certain goods (section 269F). The instrument specifies that a TCO can be issued if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). In the case of Multix Pty Ltd's application for certain greaseproof paper, the CEO made a written order declaring that these goods are subject to a 5% duty rate, which was reduced to free under the TCO (section 269P(3)).
The obligations imposed on the parties governed by this Act include the requirement for applicants to ensure that the goods in question do not have substitutable equivalents produced in Australia (section 269B). The CEO of Customs must also publish a notice in the Gazette, inviting submissions on the application for a TCO, and consider these submissions before making a decision (subsection 269K(1)). Once the TCO is issued, the CEO must ensure that the order comes into effect from the date of the application (subsection 269S(1)).
In terms of consequences, the Act does not impose any liabilities on individuals or entities for actions taken before the TCO comes into effect (subsection 269S(1)). However, if the CEO decides that an application does not meet the core criteria, or if there are submissions opposing the TCO, the application can be denied. The potential for civil or criminal penalties is not explicitly mentioned in the text, but general breaches of the Customs Act 1901 may result in penalties as stipulated under other sections of the Act. For example, subsection 284-10 of the Customs Act 1901 outlines penalties for fraudulent or negligent conduct, which can include fines of up to $22,200 for individuals and $111,000 for corporations.