EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911338
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 sack kraft paper on 03 April 2009.
Instrument
TCO No 0911338 was made on 29 June 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. 0911338 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 Tariff Concession Instrument No. 0911338, enacted in 2009 under the Customs Act 1901, addresses the need for tariff concessions on specific goods to promote fair trade practices and economic efficiency. The Customs Act 1901, as amended, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. This legislative instrument was introduced in response to an application by Detmold Packaging Pty Ltd for a TCO concerning certain sack kraft paper, aiming to ensure that the application of lower duty rates aligns with the broader policy objective of enhancing competitive neutrality and facilitating the import of goods that are not produced domestically. The process involves public consultation to allow interested parties to express their views on the proposed concession, although in this instance, no submissions were received. The TCO came into effect on the date the application was lodged, ensuring that the rights of importers are protected and that no new liabilities are imposed on any party as a result of the concession.
Scope and Application
The Customs Act 1901, under its Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who has the authority to reduce customs duty on certain goods specified in a TCO. Any person may apply to the CEO for a TCO concerning goods, provided that the goods are not those specified in section 269SJ of the Act which are ineligible for tariff concessions. The CEO must then determine whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the core criteria are met, the CEO is required to issue a written TCO. The TCO applies to the goods as specified in the instrument, with the duty rate as outlined in the Customs Tariff Act 1995. The CEO is mandated to publish a notice in the Gazette inviting any interested party to lodge submissions against the TCO, although in this instance, no submissions were received. The TCO comes into force on the date the application was lodged, and it does not adversely affect any rights of a person as at the date of registration nor impose any liabilities on a person in relation to actions taken prior to the registration.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, which is administered by the Chief Executive Officer of Customs (CEO). When a person applies for a TCO under section 269F, the CEO must assess whether the application meets the core criteria stipulated in section 269C. Specifically, this entails verifying that, on the date the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application satisfies these criteria, they are required under subsection 269P(3) to issue a written order declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred around the submission and assessment of TCO applications. For applicants, this involves ensuring that their applications meet the core criteria as outlined in section 269C. The CEO, on the other hand, must promptly assess applications, make a decision based on whether the criteria are met, and issue a TCO if appropriate. Additionally, the CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the making of a TCO. This ensures a level of transparency and opportunity for public input in the decision-making process. The TCO itself, once made, will apply retroactively to the date the application was lodged, as per subsection 269S(1), thereby affecting the rights of importers beneficially from that date.
The Act also outlines potential consequences for non-compliance with its provisions. While the explanatory statement does not detail specific civil or criminal penalties, the Act generally allows for enforcement actions against those who contravene its requirements. Such actions may include fines, imprisonment, or other legal remedies, depending on the nature and severity of the breach. For example, if a party fails to comply with the obligations regarding the submission or assessment of TCO applications, they may face legal consequences. However, it is important to note that the specific penalties are not outlined in the explanatory statement provided and would need to be referenced in the Act itself. The statement does confirm that the TCO does not impose any liabilities on any person, safeguarding the rights of non-Commonwealth entities.