EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814472
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 Ltd applied for a TCO in respect of certain drying cylinders on 25 June 2008.
Instrument
TCO No 0814472 was made on 12 September 2008. It declares that those certain drying cylinders 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. 0814472 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 Australian Parliament, provides a framework for the regulation of imports and exports through the imposition of customs duties. A significant feature of this Act is Part XVA, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods. This mechanism was introduced to address the economic impact on businesses that rely on imported goods that do not have local substitutes, thereby supporting local industries and ensuring competitive pricing. Tariff Concession Instrument No. 0814472, made under this Act, grants a tariff concession to Australian Paper Pty Ltd for certain drying cylinders, reducing the duty on these goods from the general rate of 5% to free, effective from 25 June 2008. This concession was granted after it was determined that no substitutable goods were produced in Australia, aligning with the core criteria outlined in section 269C of the Act. The process involved publishing a notice in the Gazette inviting public submissions, none of which were received, thereby allowing the concession to proceed as intended to benefit the rights of importers.
Scope and Application
The Tariff Concession Instrument No. 0814472, made under the Customs Act 1901, applies to goods specified in the Instrument, in this case certain drying cylinders, for which Australian Paper Pty Ltd applied for a Tariff Concession Order (TCO). The Act allows for the Chief Executive Officer of Customs (CEO) to make TCOs that provide a lower rate of customs duty for specified goods if certain conditions are met, such as the absence of substitutable goods produced in Australia. The TCO applies to any person importing the specified goods and the general rate of duty for these goods is reduced to free under this order. The CEO's decision to make the TCO is based on satisfying the core criteria set out in the Act, and in this instance, no submissions were received in opposition to the TCO. The TCO's commencement date aligns with the date the application was lodged, 25 June 2008, and it does not affect the rights of any person as at the date of registration or impose any liabilities for actions taken prior to the registration date.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ) detail the process and criteria for applying for a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, such as the absence of substitutable goods produced in Australia as per section 269D, and the goods are not produced in Australia in the ordinary course of business as per section 269E, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes specific obligations and requirements on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application is valid and meets the criteria outlined in the Act, particularly that the goods in question are not substitutable and not produced in Australia. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed. This transparency measure ensures that all interested parties have an opportunity to voice their concerns. The CEO is also required to consider these submissions before making a final decision on the TCO.
In terms of legal consequences, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, any improper application or misuse of a TCO could potentially lead to legal action under broader provisions of the Customs Act or related legislation, such as fraudulent activity or misrepresentation. The TCO itself does not impose any liabilities on any person, but it does provide a lower rate of customs duty for the specified goods, which could indirectly affect the financial obligations of importers. Therefore, while the Act does not detail specific penalties for breaches, any non-compliance with customs regulations could result in penalties as stipulated in other sections of the Customs Act.
The Explanatory Statement clarifies that the TCO is effective from the date the application was lodged, which in this case is 25 June 2008. This means that any goods imported on or after this date can benefit from the reduced duty rate. Furthermore, the rights of importers will be positively impacted as they can apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on such persons in respect of actions taken before the TCO's effective date.