EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843772
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.
Megara Pty Ltd applied for a TCO in respect of certain calendering rolls on 12 December 2008.
Instrument
TCO No 0843772 was made on 06 March 2009. It declares that those certain calendering rolls 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. 0843772 is taken to have come into force on 12 December 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 provide for the collection of customs duty and to regulate the import and export of goods. The Tariff Concession Instrument No. 0843772 was introduced to address the need for a more streamlined process in granting tariff concessions, facilitating the import of specific goods with reduced or no customs duty. This instrument was developed under the authority of the Chief Executive Officer of Customs (CEO) and aims to ensure that the application of tariff concessions is fair and efficient. The CEO was mandated to consider applications for tariff concession orders and make determinations based on whether substitutable goods were produced in Australia, thereby promoting the economic benefits of reduced duty rates on specific imports.
The instrument was enacted by the CEO under the provisions of the Customs Act 1901 and does not affect the rights of persons, except to beneficially impact importers who can apply for duty refunds on goods imported since the concession order was deemed to come into force. This legislative action aims to support trade by reducing the duty on certain goods, thereby encouraging imports and aligning with broader policy objectives of enhancing economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0843772 applies to entities or individuals seeking tariff concessions on specific goods under the Customs Act 1901, which is a Commonwealth Act. The legislation specifically addresses applications for Tariff Concession Orders (TCO) that can reduce the customs duty on certain imported goods, provided that these goods are not listed in section 269SJ of the Act and meet the core criteria set out in section 269C. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. The application of this Act is not limited by state or territory boundaries but applies uniformly across the Commonwealth. There are no stated exclusions or exemptions in the Act itself, but the process does exclude certain goods as per section 269SJ. The application process involves the Chief Executive Officer of Customs determining whether an applicant’s goods are eligible for a TCO based on the criteria of substitutability and local production. The Act may also extend or restrict its application through subordinate instruments, which are not detailed in the explanatory statement.
Key Provisions
The main operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0843772, pertain to the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs (sections 269C, 269B, 269D, 269E, and 269P). Section 269F allows individuals to apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia (section 269C), they must make a TCO, declaring that the specified goods are subject to a lower rate of customs duty (section 269P(3)). This instrument specifically addresses certain calendering rolls, reducing their duty from 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties and entities it governs. The CEO of Customs is required to assess applications for TCOs against the core criteria, ensuring that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from interested parties if they consider the TCO should not proceed (subsection 269K(1)). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO’s effective date (subsection 269S(1)). Importers, as beneficiaries of the TCO, have the right to apply for a refund of duty on goods imported since the TCO’s effective date (paragraph 126(1)(r) of the Regulations).
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, general provisions of the Act allow for fines and imprisonment for serious breaches. The maximum penalties can vary widely depending on the nature and severity of the offence, with some violations potentially attracting substantial fines and lengthy prison sentences. The Act also allows for the imposition of penalties for non-compliance with the TCOs, which could include fines or other financial penalties. Ensuring compliance with the Act and its instruments is therefore crucial to avoid these potential consequences.