EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812031
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.
Visy Industries Australia Pty Ltd applied for a TCO in respect of certain bleached kraft paperboard on 10 June 2008.
Instrument
TCO No 0812031 was made on 15 August 2008. It declares that those certain bleached kraft paperboard 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. 0812031 is taken to have come into force on 10 June 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. 0812031, enacted in 2008, is an instrument under the Customs Act 1901 designed to facilitate tariff concessions for specific goods, in this instance, certain bleached kraft paperboard. The Customs Act 1901, administered by the Parliament of Australia, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on eligible goods, provided certain criteria are met. The core objective of this legislation is to ensure that tariff concessions are granted only when it is established that no substitutable goods are produced in Australia in the ordinary course of business, thereby promoting fair trade practices and economic efficiency. The Tariff Concession Instrument No. 0812031 was introduced in response to an application by Visy Industries Australia Pty Ltd, aiming to address the specific needs of importers of bleached kraft paperboard by reducing their duty burden.
Scope and Application
The Tariff Concession Instrument No. 0812031 under the Customs Act 1901 applies to goods that are the subject of an application for a Tariff Concession Order (TCO), with the specific instance in this case being certain bleached kraft paperboard. This legislation is applicable to any entity or individual who imports the specified goods into Australia and seeks to benefit from the reduced customs duty rate resulting from the TCO. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. The application of the TCO is restricted to goods that meet the core criteria outlined in section 269C of the Act, specifically where no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The Act provides for the CEO to make subordinate instruments to extend or specify further details of the TCO's application. Importantly, the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken prior to the registration date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F outlines the process by which a person may apply to the CEO for a TCO in respect of certain goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which are ineligible for TCOs, the application will be evaluated against the core criteria set forth in section 269C. For a TCO to be granted, the CEO must be convinced that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms like "substitutable goods," "ordinary course of business," and "goods produced in Australia" are provided in sections 269B, 269D, and 269E respectively.
Entities applying for a TCO must ensure their application meets the outlined criteria. They need to demonstrate that the goods in question are not replaceable by Australian-made alternatives. This involves proving that no comparable goods are being produced domestically for the same use. The CEO must then verify these claims and, if satisfied, issue a TCO. The CEO also has a duty to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections. This transparency ensures that the process is open and that all stakeholders have the opportunity to voice their concerns regarding the proposed concession.
In cases where a TCO is granted, the affected goods receive a concessional rate of duty, as specified in the Customs Tariff Act 1995. The instrument TCO No. 0812031, for instance, grants a free rate of duty for certain bleached kraft paperboard, down from the general rate of 5%. The TCO's commencement date aligns with the application date, ensuring that the concessional rate is effective from the moment the application was lodged (subsection 269S(1)). Importantly, the TCO does not retroactively affect existing rights or impose new liabilities on parties other than the Commonwealth, thus protecting existing commercial arrangements.
Should any party violate the provisions of the Customs Act 1901 or the regulations associated with TCOs, they may face civil or criminal penalties. The specific penalties are not detailed in the provided text, but under Australian law, breaches of customs regulations can result in fines or imprisonment, depending on the severity and intent of the violation. The exact penalties would be determined based on the specific circumstances and the discretion of the court.