EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817470
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.
Avery Dennison Materials Pty Ltd applied for a TCO in respect of certain thermal imaging paper on 11 July 2008.
Instrument
TCO No 0817470 was made on 03 October 2008. It declares that those certain thermal imaging paper 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. 0817470 is taken to have come into force on 11 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 Customs Act 1901 was enacted by the Australian Parliament to provide a framework for the regulation of customs and excise duties. The Act includes provisions for the establishment of tariff concession orders (TCOs) which can provide reduced rates of customs duty on certain goods. The purpose of Tariff Concession Instrument No. 0817470, introduced in 2008, was to address the gap in the availability of certain thermal imaging paper in Australia by allowing for a tariff concession on these goods. The policy objective of this legislation, as articulated in the explanatory statement, is to facilitate the importation of goods that are not produced domestically and to benefit importers by potentially allowing them to claim refunds on duties paid prior to the TCO's effective date. The instrument was made without any submissions opposing the concession, indicating a lack of public opposition to the tariff reduction on the specified goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders provide a lower rate of customs duty on goods specified in the order. Any person can apply to the CEO for a TCO, provided that the goods in question are not excluded under section 269SJ of the Act. The CEO must determine if the application meets the core criteria set out in section 269C, which is contingent on whether substitutable goods are produced in Australia in the ordinary course of business. If the criteria are met, the CEO is required to issue a written order that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. The TCO applies to the date the application was lodged, as per subsection 269S(1) of the Act, and benefits the rights of importers by potentially allowing them to apply for a refund of duty under paragraph 126(1)(r) of the Regulations. The CEO is also mandated to publish a notice in the Gazette, inviting any person to lodge a submission if they believe the TCO should not be made, although no submissions were received in this instance.
Key Provisions
The Customs Act 1901 allows for the issuance of Tariff Concession Orders (TCOs) under section 269F, enabling a lower rate of customs duty on certain goods. An application for a TCO must be made by a person to the Chief Executive Officer of Customs (CEO), and if it pertains to goods not listed in section 269SJ, the CEO must evaluate whether it meets the core criteria set out in section 269C. Specifically, the application is deemed to meet these criteria if, on the date it was submitted, no substitutable goods were being produced in Australia in the ordinary course of business (section 269P(3)). In this context, "substitutable goods" are those that can be used in place of the goods in question and are produced in Australia (sections 269B and 269D). If the CEO is satisfied that the application meets the criteria, they must issue a TCO, which specifies the lower duty rate applicable to the goods (section 269F).
The obligations under this Act include the requirement for the CEO to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be issued (subsection 269K(1)). In the case of TCO No. 0817470, which pertains to certain thermal imaging paper, no submissions were received in response to this invitation. The TCO is deemed to come into effect on the date the application was lodged (subsection 269S(1)). This means that TCO No. 0817470 is effective from 11 July 2008. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, as of the registration date, and does not impose any new liabilities on anyone (subsection 269S(2)).
Breaching the provisions of the Customs Act 1901 or failing to comply with the terms of a TCO can lead to various consequences. Under the Act, there are both civil and criminal penalties for non-compliance, which can include fines and imprisonment. For instance, section 281 of the Act stipulates that a person who wilfully contravenes a provision of the Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for a single offence. Additionally, subsection 281(3) states that each day of a continuing offence is considered a separate offence. This underscores the importance of strict adherence to the legislative requirements and the potential severe repercussions for any breaches.