EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815680
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 chilled iron rolls and roll shells on 0815680.
Instrument
TCO No 0815680 was made on 19 September 2008. It declares that those certain chilled iron rolls and roll shells 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. 0815680 is taken to have come into force on 02 July 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. 0815680 was enacted under the Customs Act 1901 to address the need for providing tariff concessions on specific imported goods. This instrument, introduced by the Australian Government, targets particular goods for which a lower rate of customs duty is applied, provided they meet the criteria for tariff concessions as outlined in the Act. Specifically, it was introduced to ensure that Australian Paper Pty Ltd could benefit from a tariff concession on certain chilled iron rolls and roll shells. This measure was enacted to avoid imposing a duty on these specific goods, thereby facilitating trade and potentially reducing costs for importers. The policy objective behind this legislation is to support the efficient operation of the import system by allowing the Chief Executive Officer of Customs to make targeted tariff concessions that benefit specific industries without broadly impacting the tariff structure.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on certain goods, subject to specific criteria being met. Any person can apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act, which details goods ineligible for TCOs. The CEO assesses whether the application meets the core criteria, notably if no substitutable goods were produced in Australia in the ordinary course of business at the time of the application, as defined by sections 269C, 269D, and 269E. If the criteria are satisfied, a TCO is issued, declaring that the goods in question are subject to a prescribed tariff item. This legislative mechanism directly affects the import duties on specific goods, potentially benefiting importers by reducing their duty liabilities. The TCO does not retroactively affect the rights or impose liabilities on any person for actions taken before the TCO's effective date, ensuring that existing rights are preserved and new liabilities are not imposed.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0815680 are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application is valid if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these core criteria, they must issue a written TCO. Section 269S(1) clarifies that a TCO is effective from the date the application was lodged, meaning it has retrospective effect.
The Act imposes several obligations on the parties involved. The CEO of Customs must, as soon as practicable after accepting a TCO application, publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons to the CEO. In this case, no submissions were received, which indicates that the CEO was not provided with any objections to the application. Additionally, the CEO is obligated to ensure that no substitutable goods were produced in Australia on the day the application was lodged, which was satisfied in this instance.
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail offences or penalties for failing to comply with the TCO requirements. However, general provisions in the Act may apply to breaches of customs regulations. These could include civil or criminal penalties, although the specific penalties would depend on the nature and severity of the breach. The Customs Act and related regulations typically impose penalties such as fines and imprisonment for serious breaches.
The Tariff Concession Instrument No. 0815680 is significant for importers of chilled iron rolls and roll shells, as it reduces the duty on these goods from the general rate of 5% to free. This reduction in duty can potentially benefit importers by lowering their costs and improving their competitiveness in the market. The TCO also ensures that no existing rights or liabilities of individuals, other than the Commonwealth, are adversely affected by the concession, thereby providing a clear and fair application of the duty reduction.