EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908499
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 applied for a TCO in respect of certain paper in sheets on 12 March 2009.
Instrument
TCO No 0908499 was made on 29 May 2009. It declares that those certain paper in sheets 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. 0908499 is taken to have come into force on 12 March 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 was enacted to provide for the regulation of imports and exports, and includes provisions for the imposition of customs duties. One of the mechanisms within the Act to address specific trade-related issues is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269C. These orders provide for lower rates of customs duty on certain goods where specific criteria are met. The Tariff Concession Instrument No. 0908499, made under the Customs Act 1901, was introduced to address the specific need for a tariff concession for certain paper in sheets. The instrument was enacted by the Chief Executive Officer of Customs and does not disadvantage any persons or impose liabilities on persons other than the Commonwealth. The objective of this TCO is to benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0908499, enacted under Part XVA of the Customs Act 1901, applies to individuals and entities who seek tariff concessions for specific goods. This instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application from Detmold Packaging for a tariff concession order (TCO) on certain paper in sheets. The application was made on 12 March 2009 and was processed under the criteria outlined in sections 269C, 269D, 269E and 269F of the Act, which stipulate that a TCO can be granted if no substitutable goods are produced in Australia in the ordinary course of business. The instrument, effective from 12 March 2009, declares that certain paper in sheets are subject to the tariff item specified in Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%. The scope of the legislation is national, and it does not impose any liabilities or affect existing rights adversely, though it does provide benefits to importers who can apply for duty refunds on imports of these goods from the date of the TCO's effect.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269K, and 269S of the Customs Act 1901. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the application is deemed valid and meets the core criteria as outlined in section 269C, the CEO is required to issue a TCO. Section 269K mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any interested parties to submit any objections. Section 269S stipulates that a TCO will take effect from the date the application for the TCO was lodged.
The Customs Act 1901 imposes several obligations on the parties involved. For applicants, it is essential to ensure that the application for a TCO is valid and meets the core criteria specified in section 269C, particularly that no substitutable goods are produced in Australia on the day the application is lodged. The CEO of Customs must review the application and determine whether it meets the criteria before issuing a TCO. Additionally, the CEO must publish a notice in the Gazette, as required by section 269K, inviting submissions from any interested parties. The CEO must consider any submissions received before making a final decision on the TCO.
Breaching the conditions of a TCO or failing to comply with the requirements of the Customs Act 1901 can lead to various consequences. If an entity fails to adhere to the terms of the TCO, it may be subject to penalties under the Customs Act 1901, which could include fines or other sanctions. Specifically, section 269A of the Act provides for penalties for fraudulent importation or exportation, which may apply if the TCO is misused. Additionally, section 271 outlines penalties for various breaches of the Customs Act, including fines and imprisonment. The maximum penalties depend on the nature and severity of the breach but can include significant fines and imprisonment terms.
Overall, the Tariff Concession Instrument No. 0908499 and the underlying provisions of the Customs Act 1901 create a framework for reducing customs duty rates on certain goods, provided specific conditions are met. By ensuring compliance with the statutory requirements and obligations, entities can benefit from the tariff concessions while avoiding potential penalties for non-compliance.