EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835243
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.
Hagemeyer Branos Australia applied for a TCO in respect of certain photograph printing paper on 13 October 2008.
Instrument
TCO No 0835243 was made on 14 January 2009. It declares that those certain photograph printing 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. 0835243 is taken to have come into force on 13 October 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 customs duties and the management of goods entering and leaving Australia. Specifically, Part XVA of the Act introduces the scheme for Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain goods under particular circumstances. This scheme was designed to address the gap in providing tariff relief to importers who can demonstrate that the goods they seek to import are not being produced domestically and thus are necessary to avoid economic disadvantage. The Tariff Concession Instrument No. 0835243, made on 14 January 2009, exemplifies this scheme in action. Hagemeyer Branos Australia applied for a TCO for certain photograph printing paper, which was granted as no substitutable goods were produced in Australia. This decision aligns with the policy objective of ensuring that Australian importers are not unduly disadvantaged by high customs duties on goods that are not locally manufactured. The instrument effectively reduces the duty rate from 5% to free, thus facilitating access to essential imported goods.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which aim to provide a lower rate of customs duty on certain goods. This process is available to any person who applies for a TCO in respect of goods not specified in section 269SJ of the Act, provided the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. This requirement is outlined in section 269C and further defined in sections 269D, 269E and 269F of the Act. Should the CEO determine that the application meets the core criteria, a TCO is issued, as mandated by section 269P(3). This legislative mechanism is jurisdictional under the Commonwealth and applies to any goods subject to a valid TCO application. The scope of the Act is further refined through subordinate instruments, which may detail specific exclusions or thresholds for TCO eligibility. The commencement of a TCO is effective from the date the application is lodged, and while it does not disadvantage any person by affecting their rights prior to the registration date, it does allow importers to benefit from a refund of duty on eligible goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows for the application for a Tariff Concession Order (TCO) by a person, while section 269C outlines the core criteria that must be met for such an application to be successful. Specifically, section 269C requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, then they must make a TCO under section 269P, which declares that the goods in question are subject to a prescribed rate of duty as per the Customs Tariff Act 1995. Section 269SJ, on the other hand, specifies the goods that cannot be the subject of a TCO.
The obligations imposed by the Act primarily concern the CEO of Customs, who must review TCO applications and ensure they meet the core criteria set out in section 269C. If the CEO determines that an application meets these criteria, they must make a TCO as specified in section 269P. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, the CEO did not receive any submissions.
Any failure to comply with the provisions of the Customs Act 1901 concerning TCOs could potentially result in civil or criminal consequences. Although specific penalties are not outlined in the provided text, breaches of customs legislation generally can lead to significant fines and even imprisonment, depending on the severity of the offence. The Act allows for the imposition of penalties for non-compliance with its provisions, although the exact penalties would be detailed in other parts of the legislation or in related regulations.
In summary, the Customs Act 1901, through sections 269C, 269F, 269P, and 269SJ, facilitates the application and issuance of TCOs, provided certain criteria are met. The CEO of Customs has the responsibility to assess applications and publish notices inviting submissions, while non-compliance with the Act’s provisions could lead to civil or criminal penalties. In this specific case, Hagemeyer Branos Australia successfully applied for a TCO for certain photograph printing paper, leading to a concession in the duty rate from 5% to free.