EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807819
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 ceramic covered rolls on 13 May 2008.
Instrument
TCO No 0807819 was made on 01 August 2008. It declares that those certain ceramic covered 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. 0807819 is taken to have come into force on 13 May 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. 0807819, enacted in 2008 under the Customs Act 1901, was introduced to provide tariff concessions for specific goods, thereby addressing the problem of potentially high customs duties on imported items where no equivalent Australian-made products exist. This instrument was designed to offer relief to importers by allowing them to apply for a Tariff Concession Order (TCO) which, if granted, reduces the customs duty on the specified goods. The Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework for such concessions, with the Chief Executive Officer of Customs having the authority to make these orders. The primary policy objective behind this legislation is to facilitate trade by reducing the cost burden on importers, thereby potentially increasing the competitiveness of Australian businesses that rely on importing certain goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to persons or entities that seek to import goods into Australia and who may apply for a TCO to benefit from reduced customs duties on specified items. The application process involves a determination by the CEO that the goods in question are not excluded under section 269SJ and meet the criteria set out in sections 269B, 269C, 269D, and 269E of the Act. The application must also consider whether any substitutable goods are produced in Australia. Once the CEO is satisfied that the application meets these criteria, a written TCO is issued, granting a tariff concession on the goods in question. This legislative process ensures that certain imported goods can benefit from preferential duty rates, provided they meet the specified conditions. The TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth, thus protecting pre-existing legal positions.
The geographic scope of this Act is national, as it pertains to the importation of goods into Australia, thereby affecting importers, exporters, and the customs process across the country. However, it does not extend to state or territory jurisdictions in terms of the regulatory framework for customs duties. The Act allows for the issuance of TCOs through subordinate instruments, enabling flexibility in the application of tariff concessions. This mechanism ensures that the concessions can be tailored to specific goods and circumstances, enhancing the efficiency and fairness of the customs duty regime. The exclusions and thresholds are clearly defined within the Act, ensuring that only eligible goods and applications are considered for tariff concessions.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) allows for the application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the application is for goods not listed in section 269SJ of the Act as ineligible for TCOs, the CEO must assess whether it meets the core criteria set out in section 269C of the Act. If the CEO determines that the application meets these criteria, they are required to issue a TCO, which provides a reduced rate of customs duty for the specified goods. For instance, Australian Paper Pty Limited applied for a TCO for certain ceramic covered rolls on 13 May 2008, which was subsequently approved and issued on 1 August 2008.
The obligations imposed by the Act on the CEO include ensuring that the application does not pertain to goods listed in section 269SJ and verifying that no substitutable goods were produced in Australia at the time of application, as defined by sections 269D, 269E, and 269B of the Act. Additionally, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made, as per subsection 269K(1) of the Act. In this instance, no submissions were received in response to the notice.
Breaching the requirements or failing to comply with the provisions of the Customs Act 1901 can result in civil and criminal consequences. The specific penalties are not detailed in the explanatory statement; however, the Act provides for penalties in general terms, including fines and imprisonment. The maximum penalties would depend on the specific nature and severity of the breach, and would be determined by the courts in accordance with the provisions of the Act and any applicable regulations.