EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906070
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 paper on 20 February 2009.
Instrument
TCO No 0906070 was made on 15 May 2009. It declares that those certain 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. 0906070 is taken to have come into force on 20 February 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 Tariff Concession Instrument No. 0906070 was enacted in 2009 under the Customs Act 1901 to address the issue of providing tariff concessions for certain goods, specifically certain paper in this instance. The Customs Act 1901 facilitates the application process for Tariff Concession Orders (TCOs), which are intended to reduce customs duties on goods not produced domestically. The instrument was introduced to provide tariff concessions where no substitutable goods are produced in Australia, thereby encouraging trade and potentially benefiting importers by allowing them to apply for refunds on duties paid prior to the TCO's effective date. The Tariff Concession Order No. 0906070 was published in the Gazette, inviting public submissions, none of which were received. Consequently, the order was made by the Chief Executive Officer of Customs, who was satisfied that the application met the core criteria, leading to the application of a zero duty rate on the specified paper.
Scope and Application
The Tariff Concession Instrument No. 0906070, under the Customs Act 1901, pertains to the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking tariff concessions on specific goods, ensuring that these goods qualify for reduced customs duties. The application process requires that the goods in question are not produced in Australia and do not have substitutable alternatives that could be produced domestically. The Act mandates that a TCO application must meet core criteria, including the absence of substitutable goods in Australia and the goods being free of specific prohibitions outlined in section 269SJ. The instrument has a national jurisdictional reach, impacting all importers and exporters within Australia who deal with the specified goods. Additionally, the Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage existing rights as of the date of registration. The instrument extends its application through subordinate instruments, which may further define terms or criteria relevant to tariff concessions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0906070, which is based on the Customs Act 1901, include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria set out in section 269C, which essentially requires that no substitutable goods were produced in Australia at the time of application, the CEO must make a TCO. Section 269P outlines the process by which the CEO must declare the goods subject to the TCO, specifying the applicable rate of duty. Section 269S details the effective date of the TCO, which is the day the application is lodged.
Under the Customs Act 1901, the CEO has several obligations and requirements when processing a TCO application. The CEO must first determine if the goods specified in the application fall within the scope of section 269SJ, which lists goods that cannot be subject to a TCO. If the goods are eligible, the CEO must then assess whether the application meets the core criteria by verifying that no substitutable goods were produced in Australia. If the criteria are satisfied, the CEO must make a written TCO and publish a notice in the Gazette inviting any objections to the proposed order. Detmold Packaging Pty Ltd's application for a TCO on certain paper was processed according to these provisions, with no objections received.
The Customs Act 1901 also includes provisions for offences, penalties, and consequences in the event of a breach. Although the explanatory statement does not detail specific offences related to the TCO, breaches of the Customs Act generally can lead to civil and criminal penalties. For example, section 224 of the Customs Act provides for fines of up to 10,000 penalty units (currently AUD 1.7 million) or imprisonment for up to five years, or both, for serious offences such as fraud or smuggling. Additionally, section 224A specifies penalties for breaches related to false statements or documents, which can also attract substantial fines and imprisonment. While these sections do not specifically address TCOs, they provide a framework for understanding the seriousness with which the Act treats breaches.