EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0810193
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 roll shells paper and paperboard making machines on 27 May 2008.
Instrument
TCO No 0810193 was made on 15 August 2008. It declares that those certain roll shells paper and paperboard making machines 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. 0810193 is taken to have come into force on 27 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the application of customs duty, including the provision for Tariff Concession Orders (TCOs) under Part XVA. This legislative provision aims to address the gap in providing relief from customs duty on certain goods, ensuring that businesses can access necessary imported goods at reduced rates if no suitable domestic alternatives exist. The Customs Act 1901 allows the Chief Executive Officer of Customs to grant tariff concessions to applicants, provided that the application meets the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. The instrument, Tariff Concession Instrument No. 0810193, was introduced to grant a tariff concession to Australian Paper Pty Limited for certain roll shells paper and paperboard making machines, effectively reducing the duty on these goods from 5% to free. This measure ensures that Australian businesses can remain competitive by accessing cost-effective imported machinery, thereby supporting industrial development and economic growth.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders, when issued, apply a reduced rate of customs duty to specific goods. The Act applies to any person who may apply for a TCO for goods that are not excluded under section 269SJ of the Act. A TCO application is deemed to meet the core criteria if, on the day it was lodged, there were no substitutable goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The geographic reach of this Act is national, as it applies across Australia. The Act does not specify exclusions or exemptions beyond those outlined in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, which can provide further detail on the types of goods eligible for TCOs and the procedures for applying for them.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). A TCO is taken to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)).
The obligations and requirements imposed by the Customs Act 1901 on parties applying for a TCO are primarily outlined in sections 269F and 269K. Section 269F requires that an applicant must make an application to the CEO for a TCO in respect of goods. The applicant must ensure that the goods are not specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO. The CEO must then decide if the application meets the core criteria set out in section 269C. If the application meets the criteria, the CEO is obligated to make a written TCO (section 269P(3)). Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach within the context of TCOs. However, it is implied that any misuse or improper application for a TCO could lead to legal scrutiny, as the Act governs the conditions under which such concessions are granted. The focus of the legislation is on ensuring that TCOs are only granted when certain conditions are met, and it does not detail penalties for breach of these conditions. The absence of specific penalties in the text does not diminish the importance of adhering to the outlined procedures and criteria.
The Tariff Concession Order No. 0810193, which was made on 15 August 2008, applies to certain roll shells paper and paperboard making machines and declares that these goods are subject to a 0% duty rate. The CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business. This TCO came into effect on 27 May 2008, the day the application was lodged. Importantly, the TCO does not affect the rights of any person as at the date of registration, and it does not impose any liabilities on any person. Importers, however, will benefit from the ability to apply for a refund of duty on goods imported since the TCO came into force.