EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804870
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.
Consolidated Paper Industries Pty Ltd applied for a TCO in respect of certain sheetfed offset printing inks on 22 April 2008.
Instrument
TCO No 0804870 was made on 18 July 2008. It declares that those certain sheetfed offset printing inks 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. 0804870 is taken to have come into force on 22 April 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 was enacted to provide a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, which can be made by the Chief Executive Officer of Customs, allow for a reduced rate of customs duty on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. This legislative framework was introduced to address the need for targeted tariff reductions to support specific industries or goods that may be at a competitive disadvantage due to the absence of local production. The policy objective is to facilitate trade and economic efficiency by ensuring that certain goods can be imported at a reduced duty rate, thereby promoting competitiveness and accessibility within the market. Parliament enacted this provision to balance the need for revenue generation through customs duties with the economic benefits of supporting particular sectors of the economy.
Scope and Application
The Tariff Concession Instrument No. 0804870, made under the Customs Act 1901, applies to certain sheetfed offset printing inks specified in the instrument. The instrument was made in response to an application by Consolidated Paper Industries Pty Ltd, and it provides for a concessional rate of customs duty on these goods. The Act applies to any person who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. This means that if a person can show that the goods in question cannot be substituted by any domestically produced alternatives, they may apply for a Tariff Concession Order (TCO). The TCO exempts these goods from the general rate of duty, which is 5%, and applies a duty rate of free. The instrument extends to the Commonwealth and is subject to the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument does not impose any liabilities on any person, nor does it affect the rights of any person as at the date of registration of the TCO. Any person who considers that there are reasons why the TCO should not be made can lodge a submission with the Chief Executive Officer of Customs. However, in this case, no submissions were received in response to the notice published in the Gazette. The TCO is taken to have come into force on the date the application for the TCO was lodged, which was 22 April 2008.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) and the process for their application and approval under the Customs Act 1901 (the Act). Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for goods, provided the goods are not specified in section 269SJ, which excludes certain goods from being eligible for a TCO. If the CEO is satisfied that the application meets the core criteria, which include no substitutable goods being produced in Australia in the ordinary course of business (sections 269C and 269P), the CEO must make a written order (sections 269P(3) and 269S(1)).
The Act imposes specific obligations on the CEO and applicants for TCOs. The CEO must consider the application and decide whether it meets the core criteria outlined in section 269C. If the application is valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person by affecting their rights as at the date of registration or imposing liabilities for actions taken before the date of registration (subsection 269S(3)).
In terms of penalties and consequences, the Act does not explicitly detail penalties for breach. However, it is implied that failure to comply with the terms of the TCO, such as misapplying for a concession not eligible under the Act, could lead to legal ramifications. The primary focus of the legislation is on the administrative process for granting TCOs and ensuring that they are made in accordance with the specified criteria. The rights of importers, such as the ability to apply for a refund of duty on goods imported since the TCO came into force, are protected under the Act (paragraph 126(1)(r) of the Regulations).
The consequences for non-compliance with the requirements of the TCO, while not explicitly detailed in the Act, could potentially involve legal actions to rectify the breach or reclaim any undue benefits obtained through non-compliance. The legislative intent is to streamline the process for tariff concessions while ensuring that such concessions do not unfairly impact existing rights or impose new liabilities on individuals or entities.
Overall, the legislation focuses on the orderly administration of tariff concessions, ensuring that they are granted in line with the specified criteria and do not adversely affect the rights of third parties. The Act provides a clear framework for application, consideration, and implementation of TCOs, with a particular emphasis on transparency and fairness in the process.