EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900763
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.
Detmold Packaging Pty Ltd applied for a TCO in respect of certain sack kraft paper on 14 January 2009.
Instrument
TCO No 0900763 was made on 14 April 2009. It declares that those certain sack kraft 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. 0900763 is taken to have come into force on 14 January 2009.
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, outlines a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act was designed to address the need for a streamlined process to reduce customs duty on specific goods, facilitating trade and economic activities by offering tariff concessions on certain imported goods. The primary objective is to provide relief to industries that rely on importing specific goods that are not produced domestically, thereby encouraging fair competition and economic growth. TCO No. 0900763, made under this Act, was introduced to provide tariff concessions on certain sack kraft paper, effectively reducing the duty rate from 5% to free, thereby benefiting importers of these goods.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0900763, applies to any entity or individual seeking tariff concessions on goods imported into Australia. This legislation specifically governs the application process for Tariff Concession Orders (TCOs), which provide for a lower rate of customs duty on certain goods, as determined by the Chief Executive Officer of Customs. The application process is subject to the core criteria outlined in the Act, particularly the requirement that no substitutable goods be produced in Australia in the ordinary course of business. The instrument extends to the entire Commonwealth, ensuring a uniform approach across all states and territories. Notably, certain goods specified in section 269SJ of the Act are excluded from the tariff concession scheme, and the rights of importers are safeguarded to ensure they are not disadvantaged by the application of the TCO. The commencement date of the TCO is retroactive to the date of the application, ensuring that the benefits of the tariff concession are available from that date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0900763 are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C sets out the core criteria that must be met for a TCO application to be considered, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these core criteria, section 269P(3) requires the CEO to make a written order (a TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. In this case, the TCO declares that certain sack kraft paper is subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the TCO application meets the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). Additionally, the CEO must consider any submissions received and decide whether to make the TCO based on the criteria and any relevant submissions. For the applicant, the obligation is to ensure that the application is complete and meets all the criteria specified in the Act.
Any breach of the requirements or obligations under the Customs Act 1901 can lead to civil or criminal consequences. The Act does not specify particular offences related to the TCO process, but general contraventions of the Customs Act can lead to penalties. Under section 264 of the Customs Act, a person who contravenes a provision of the Act is liable to a penalty of up to $22,200 for an individual and $111,000 for a body corporate, as per the current penalty units. If the contravention is deliberate, the penalties can be significantly higher, and in some cases, criminal prosecution can occur. The Act also allows for the imposition of fines and imprisonment, with the severity of the penalty depending on the nature and circumstances of the offence.