EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825248
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.
Paperlinx Limited applied for a TCO in respect of certain label base paper on 06 August 2008.
Instrument
TCO No 0825248 was made on 31 October 2008. It declares that those certain label base 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. 0825248 is taken to have come into force on 06 August 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. 0825248, enacted in 2008, addresses the problem of ensuring that certain goods imported into Australia do not face customs duty when there are no substitutable goods produced domestically. This instrument is a part of the Customs Act 1901, enacted by the Parliament of Australia, and aims to provide tariff concessions for specific goods to promote fair trade practices and support Australian industries where applicable. The instrument was made in response to an application by Paperlinx Limited for tariff concessions on certain label base paper, which was granted after it was determined that no substitutable goods were produced in Australia at the time of application. The tariff concession effectively reduces the customs duty on these specific goods from the general rate of 5% to free, effective from the date of application, 6 August 2008.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. This legislation applies to individuals and entities, such as Paperlinx Limited, that apply for and receive a TCO for specific goods, such as label base paper, provided these goods meet the criteria outlined in the Act. The Act's jurisdictional reach is national, impacting trade across Australia. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The CEO's decision to grant a TCO hinges on whether no substitutable goods are produced in Australia on the day the application is lodged. Once a TCO is granted, it is effective from the date of the application, and importers of the specified goods can apply for a refund of duty paid on those goods since the effective date. Importantly, the TCO does not disadvantage any person or impose liabilities on anyone for actions taken before the TCO's registration.
Key Provisions
The main operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901, which detail the process for applying for and receiving a Tariff Concession Order (TCO) (section 269F). Section 269C specifies the core criteria that a TCO application must meet, which is the absence of substitutable goods produced in Australia at the time of application. If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, section 269P mandates the CEO to issue a written TCO. In this case, TCO No. 0825248 was made on 31 October 2008, declaring that certain label base paper are goods to which a specific item in the Customs Tariff Act 1995 applies, thereby reducing the duty from 5% to free.
The Act imposes several obligations and requirements on both applicants and the CEO of Customs. Applicants, such as Paperlinx Limited in this case, must ensure their applications are complete and meet the core criteria, particularly demonstrating that no substitutable goods are produced in Australia. The CEO, on the other hand, is required to assess the application against these criteria and, if satisfied, to make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as outlined in section 269K(1). The CEO must also ensure that the TCO does not adversely affect existing rights or impose new liabilities on non-Commonwealth entities, as stipulated in section 269S(1).
Breach of the provisions or requirements set out in this Act can result in significant consequences. While the Explanatory Statement does not explicitly list offences, penalties, or consequences for breach, it is reasonable to infer that any failure to comply with the Act’s requirements could lead to legal actions. Given that the TCO provides a duty-free status for specific goods, any fraudulent application or misrepresentation could lead to financial penalties, revocation of the TCO, and potential legal action against the party in breach. The maximum penalties would depend on the specific nature of the breach and could include fines or imprisonment as prescribed under the relevant sections of the Customs Act 1901 and any other applicable legislation.