EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911493
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.
Jasco Pty Ltd applied for a TCO in respect of certain waterproof paper on 06 April 2009.
Instrument
TCO No 0911493 was made on 29 June 2009. It declares that those certain waterproof 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. 0911493 is taken to have come into force on 06 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 Australian Parliament to provide for the administration of customs and excise, including the regulation of the import and export of goods. One of the mechanisms it incorporates is the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods, thereby addressing the issue of excessive customs duties on goods for which no domestic substitute exists. The policy objective is to promote trade and industry by reducing the cost of importing goods that are not produced domestically. The Explanatory Statement for Tariff Concession Instrument No. 0911493, issued under this Act, details the process by which Jasco Pty Ltd successfully applied for a TCO for certain waterproof paper, resulting in a reduction of the customs duty rate from 5% to free. The CEO was satisfied that no substitutable goods were produced in Australia, and thus, the TCO was made effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0911493, made under the Customs Act 1901, applies specifically to certain waterproof paper for which Jasco Pty Ltd made an application on 06 April 2009. The instrument was issued on 29 June 2009, following the Chief Executive Officer of Customs determining that the application met the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia at the time of the application. The instrument declares that the specified waterproof paper now applies to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting it a duty-free status. This application of the Act facilitates tariff concessions for the specified goods, benefiting importers who can now apply for a refund of duty on imports of these goods since the date the TCO is deemed to have come into force. Importantly, the instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on any person, ensuring that existing rights and obligations remain unaffected.
Key Provisions
The primary operative sections of this legislation (F2009L04175) pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for the application of a TCO to reduce customs duty on certain goods. If an application for a TCO is made under section 269F, and the Chief Executive Officer (CEO) of Customs is satisfied that it meets the core criteria set out in sections 269C and 269P, a TCO can be issued. Section 269C stipulates that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Furthermore, section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order (the TCO) must be made, declaring that the goods are subject to a prescribed rate of duty as specified in the Customs Tariff Act 1995.
Under this legislation, certain obligations and requirements are imposed on the parties involved. The CEO of Customs is required to consider applications for TCOs and assess whether they meet the core criteria outlined in the Act. If the application is valid and the criteria are met, the CEO must issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be made. This ensures transparency and allows for public consultation on the proposed concession.
Failure to comply with the provisions of this legislation can lead to various consequences. The Act does not specify particular offences or penalties for breaches related to TCOs. However, breaches of the Customs Act 1901 can result in civil or criminal penalties as outlined in other sections of the Act. Civil penalties can include fines and recovery of unpaid duty, while criminal penalties can include imprisonment. The maximum penalties depend on the specific breach and the severity of the offence, as outlined in the broader provisions of the Customs Act 1901.
In summary, the legislation establishes a framework for applying tariff concessions on specific goods, ensuring that the process is transparent and that the rights of all parties are considered. The obligations primarily rest with the CEO of Customs, who must assess applications and issue TCOs where appropriate. While the specific penalties for breaches are not detailed in this instrument, general penalties under the Customs Act 1901 apply, which can include both civil and criminal sanctions.