EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911337
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 Packaing Pty Ltd applied for a TCO in respect of certain plates paper on 03 April 2009.
Instrument
TCO No 0911337 was made on 29 June 2009. It declares that those certain plates 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. 0911337 is taken to have come into force on 03 April 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 by the Commonwealth Parliament to provide a comprehensive framework for the regulation of customs and excise in Australia. The Act was introduced to address the need for a unified system to manage the importation and exportation of goods, ensuring compliance with customs laws and the collection of appropriate duties and taxes. In this context, Tariff Concession Orders (TCOs) were introduced as a mechanism to provide relief on customs duties for certain goods, provided specific criteria are met. The instrument F2009L04229, specifically TCO No. 0911337, was made under the Customs Act to provide a tariff concession for certain plates paper, effectively reducing the customs duty from the general rate of 5% to free. The objective of this concession is to support industries by making essential goods more affordable, thereby encouraging their use and production within Australia. The process involved publishing a notice in the Gazette to invite submissions on the concession, which did not receive any objections, facilitating the smooth implementation of the concession on the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process by which Tariff Concession Orders (TCO) can be issued by the Chief Executive Officer of Customs (CEO) to lower customs duty rates on specified goods. This legislation applies to any person who can apply for a TCO concerning goods that are not listed in section 269SJ of the Act, which specifies those goods that cannot be subject to a TCO. The application must meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also consider definitions provided in sections 269D and 269E of the Act, which explain what constitutes 'goods produced in Australia' and 'ordinary course of business', respectively. If these criteria are satisfied, the CEO is mandated to issue a written order, the TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. TCO No. 0911337, for instance, was issued for certain plate papers, resulting in a zero rate of duty, as opposed to the general rate of 5%. This TCO came into force on the date the application was lodged, 3 April 2009, without affecting any pre-existing rights or imposing any new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0911337, pertain to the establishment and implementation of Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO on certain goods, provided they are not listed in section 269SJ. The CEO, as per section 269C, must determine if the application meets the core criteria, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If these criteria are satisfied, the CEO is required, under section 269P(3), to issue a written order that specifies the application of a prescribed item of Schedule 4 to the Customs Tariff Act 1995 to the goods in question.
The obligations imposed by the Act on the parties it governs include the responsibility of the CEO to assess TCO applications against the core criteria specified in sections 269C and 269F. The CEO must also ensure that any TCO application is published in the Gazette as per subsection 269K(1), inviting submissions from any interested parties. Once a TCO is issued, the CEO must ensure that it does not adversely affect the rights of any person, as per the provisions under subsection 269S(1), and that it does not impose any liabilities on persons other than the Commonwealth.
The Act provides for various consequences for breaches of its provisions. While the Explanatory Statement does not detail specific criminal or civil penalties, it is understood that breaches of the Customs Act 1901 could result in substantial penalties, including fines and imprisonment, depending on the nature and severity of the breach. For instance, contraventions of the Customs Act can attract penalties under section 274 of the Act, which allows for fines up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious breaches. Additionally, subsection 269S(1) ensures that TCOs do not affect the rights of persons other than the Commonwealth and do not impose liabilities on them for actions taken before the TCO’s effective date.