EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0821124
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 Hardboards Limited applied for a TCO in respect of certain multi purpose low density fibreboard on 21 July 2008.
Instrument
TCO No 0821124 was made on 10 October 2008. It declares that those certain multi purpose low density fibreboard 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. 0821124 is taken to have come into force on 21 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 to facilitate the regulation of imports and exports, ensuring the correct collection of duties and taxes. One of the mechanisms within this Act is the provision for Tariff Concession Orders (TCOs), introduced to address gaps in domestic production and to promote fair trade practices. Enacted by the Parliament of Australia, the policy objective of TCOs is to provide relief from customs duties for goods that cannot be produced domestically in the ordinary course of business, thereby encouraging competition and economic efficiency. On 10 October 2008, TCO No. 0821124 was made in response to an application by Australian Hardboards Limited for tariff concessions on certain multi-purpose low-density fibreboard, resulting in the duty on these goods being set at free, as no substitutable goods were produced in Australia at the time of the application. This TCO came into force on the date the application was lodged, 21 July 2008, and does not impose any liabilities on any person, nor does it disadvantage any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0821124 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain multi-purpose low density fibreboard. This Act is applicable to entities or individuals involved in the importation of these goods, aiming to provide a tariff concession that reduces the customs duty from the general rate of 5% to free. The Act operates under the Commonwealth jurisdiction and its effects are felt within Australia, specifically for goods subject to the concession. Notably, the Act does not apply to goods specified in section 269SJ of the Customs Act, which lists those goods that cannot be subject to a tariff concession order. The scope of the Act is further extended or restricted through subordinate instruments as necessary, ensuring that the application remains aligned with the broader objectives of the Customs Act and the Customs Tariff Act 1995.
Key Provisions
The key operative sections of the Customs Act 1901, in particular as they relate to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the application does not pertain to goods listed in section 269SJ, which are ineligible for such concessions. Section 269C stipulates that an application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order must be made, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a lower rate of customs duty. The act of issuing TCO No. 0821124 on 10 October 2008, as outlined in the explanatory statement, exemplifies these provisions in action, where the CEO applied a free duty rate to certain multi-purpose low-density fibreboard, previously taxed at 5%.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the necessity for applicants to ensure their applications do not relate to goods specified in section 269SJ. For the CEO, the obligations include verifying that the application meets the core criteria by ensuring no substitutable goods were produced in Australia on the application date. Additionally, once an application is accepted, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who might have reasons why the TCO should not be granted. In this case, the CEO did not receive any submissions regarding TCO No. 0821124, which facilitated the swift issuance of the concession. Furthermore, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and the TCO does not impose any new liabilities on any person.
The Customs Act 1901 and the associated regulations provide for specific civil and criminal consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties related to TCOs, breaches of other sections of the Customs Act may result in penalties. For instance, under the Customs Act, knowingly making a false statement or representation can result in fines or imprisonment. In the context of TCOs, failure to comply with the requirements or misuse of the concession could potentially lead to penalties, including the repayment of any unjustifiably received concessions or other financial penalties. Given the specific nature of TCOs, it is essential that applicants and recipients adhere strictly to the conditions and requirements set forth in the Act to avoid any adverse consequences.