EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814470
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 paper winding machines rolls on 25 June 2008.
Instrument
TCO No 0814470 was made on 12 September 2008. It declares that those certain paper winding machines 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. 0814470 is taken to have come into force on 25 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework for administering customs duties and tariffs in Australia. To address the need for tariff concessions that can stimulate industry and economic growth, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide for lower rates of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The explanatory statement outlines Tariff Concession Instrument No. 0814470, which was made on 12 September 2008, in response to an application by Australian Paper Pty Limited for certain paper winding machine rolls. The policy objective of this instrument is to ensure that the application of tariff concessions does not disadvantage any person and to facilitate the process by which importers can claim refunds for duties paid on eligible goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0814470 under the Customs Act 1901 applies specifically to certain paper winding machines rolls, as identified in the application submitted by Australian Paper Pty Limited. The instrument targets the reduction of customs duty for these goods, aligning with the legislative scheme that allows for tariff concessions when no substitutable goods are produced in Australia. The instrument is effective from 25 June 2008, the date on which the application was lodged, and it operates to grant a free duty rate for the specified goods, thereby reducing the general duty rate of 5% applicable to them. The scope of the Act encompasses any entity or individual involved in the import of these goods, providing them with tariff benefits if they were imported after the effective date. The application of this instrument is governed by the Commonwealth and is subject to the stipulations outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The instrument does not disadvantage any person or impose liabilities for actions taken prior to its effective date, and it extends its benefits to importers who may seek duty refunds for goods imported since the commencement date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0814470 include sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901, which outline the process for applying for and granting Tariff Concession Orders (TCOs) (ss 269C, 269F, 269P, 269SJ). Section 269C sets out the core criteria that must be met for a TCO application to be considered, which includes ensuring that no substitutable goods are produced in Australia (s 269C). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods (s 269F). If the CEO is satisfied that the application meets the core criteria, a TCO will be issued (s 269P). Section 269SJ specifies the goods that cannot be subject to a TCO (s 269SJ).
The Act imposes several obligations on the parties involved in the TCO process. The CEO is required to consider each TCO application and determine if it meets the core criteria (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) (s 269P). The CEO must also publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (s 269K). Additionally, importers of goods subject to a TCO may apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Reg 126(1)(r)).
Failure to comply with the provisions of the Customs Act 1901 or the regulations could result in various civil and criminal consequences. For example, making a false or misleading statement in an application for a TCO could result in a penalty of up to 50 penalty units (PU) under section 275-1 of the Crimes Act 1914 (Cth) (s 269R). Furthermore, failing to comply with a TCO or providing false information in connection with a TCO could result in criminal penalties under section 277 of the Crimes Act 1914 (Cth) (s 269T). The maximum penalty for contravening these provisions is 10,000 PU or imprisonment for five years, or both (s 277). The Act also provides for the imposition of civil penalties, including fines, for breaches of the Act or regulations (s 269U).
In summary, Tariff Concession Instrument No. 0814470 sets out the process for applying for and granting TCOs under the Customs Act 1901. The Act imposes obligations on the CEO and applicants to ensure that TCOs are granted only where the core criteria are met. Failure to comply with the provisions of the Act or regulations could result in civil or criminal penalties, including fines and imprisonment.