EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914152
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.
Australian Paper applied for a TCO in respect of certain paperboards blades on 29 April 2009.
Instrument
TCO No 0914152 was made on 24 July 2009. It declares that those certain paperboards blades 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. 0914152 is taken to have come into force on 29 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 to provide a framework for the regulation of customs and excise, including the imposition of customs duties on imported goods. The Act was introduced to address the need for a comprehensive legal structure governing the collection of customs duties and the regulation of imports and exports within Australia. The policy objective of the Act, as evidenced by the introduction of Tariff Concession Orders (TCOs) under Part XVA, is to facilitate trade by reducing the customs duty on certain goods, provided that no substitutable goods are produced in Australia. This mechanism encourages the import of goods that cannot be locally produced, thereby supporting economic efficiency and consumer choice. The Tariff Concession Instrument No. 0914152, made by the Chief Executive Officer of Customs on 24 July 2009, exemplifies this policy by granting a tariff concession on certain paperboard blades, reducing the duty rate from 5% to free, subject to the condition that no substitutable goods are produced domestically.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of Tariff Concession Orders (TCOs) to certain imported goods, providing lower rates of customs duty. This scheme applies to individuals and entities who apply for a TCO in respect of specific goods, provided these goods are not listed in section 269SJ of the Act, which excludes certain types from tariff concessions. The process is overseen by the Chief Executive Officer of Customs (CEO), who must determine whether the application meets the core criteria outlined in sections 269C and 269D of the Act, specifically ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The application's geographic reach is national, affecting all importers across Australia. The instrument, Tariff Concession Instrument No. 0914152, was made on 24 July 2009, declaring that certain paperboard blades are subject to a free rate of duty instead of the general 5% rate, effective from 29 April 2009, the date the application was lodged. This TCO does not impose any liabilities or affect the rights of any person except to beneficially affect the rights of importers, who may apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0914152 under the Customs Act 1901 applies specifically to certain paperboards blades. According to section 269P(3), if the Chief Executive Officer of Customs (CEO) determines that the application for a Tariff Concession Order (TCO) meets the core criteria, they are required to make a written order declaring that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995. This specific TCO, made on 24 July 2009, declares that the paperboards blades are subject to item 50 of Schedule 4, which imposes a duty rate of free, whereas the general rate of duty for such goods is 5%.
The Act imposes certain obligations on the parties involved. Under section 269C, a TCO application is considered to meet the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269SJ outlines the goods that cannot be the subject of a TCO, and section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the application. In this case, no submissions were received. Furthermore, the CEO is obligated to ensure that the goods in question are not substitutable to those produced domestically, as defined by sections 269D and 269E.
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal consequences. Section 269F allows a person to apply for a TCO, but if the CEO finds that the application does not meet the core criteria, or if there is a breach of any other provision in the Act, it could lead to penalties. The maximum penalties for breaches of the Customs Act can include substantial fines and, in some cases, imprisonment. However, the specific penalties for this particular TCO are not detailed in the explanatory statement, but they would typically align with the general penalties outlined in the Act for non-compliance with customs regulations.