EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914216
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.
Honicel Australia applied for a TCO in respect of certain honeycomb paper and or paperboard on 29 April 2009.
Instrument
TCO No 0914216 was made on 17 July 2009. It declares that those certain honeycomb paper and or paperboard 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. 0914216 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 by the Parliament of Australia to provide a comprehensive framework for the administration of customs and excise duties. The Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on specific goods. This was introduced to address the need for tariff concessions that could aid Australian industries by lowering the cost of imported materials that do not have local substitutes. The Tariff Concession Instrument No. 0914216, made under the authority of the Customs Act 1901, specifically targets certain honeycomb paper and paperboard, granting them a free rate of duty as opposed to the general rate of 5%. The instrument was created after Honicel Australia applied for the concession on 29 April 2009, and the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a TCO. This initiative aims to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the effective date of the TCO, without imposing any liabilities on any person.
Scope and Application
The Customs Act 1901, as part of its Tariff Concession Instrument No. 0914216, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the rate of customs duty on specific goods. This Act applies to persons or entities that apply for such concessions on goods which are not specified in section 269SJ of the Act and which do not have substitutable goods produced in Australia. The concessions are granted if the application meets the core criteria set out in sections 269C and 269F of the Act, ensuring that the goods are not produced domestically and that there are no suitable alternatives available in Australia. The geographic reach of this legislation is national, impacting all importers within Australia who deal with the specified goods. The TCO does not affect the rights of any person, except the Commonwealth, in relation to actions taken before the TCO was registered, and it does not impose any liabilities on any person. The Act allows for the scope of its application to be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and corresponding duty rates in the Tariff.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as amended by Tariff Concession Instrument No. 0914216, involve the establishment of Tariff Concession Orders (TCOs) under section 269F, and the criteria for these orders under sections 269B, 269C, and 269D (referenced in parentheses). These sections stipulate that a TCO can be applied for and granted if certain conditions are met, such as the absence of substitutable goods produced in Australia. Section 269P(3) further mandates that if these criteria are satisfied, the CEO must issue a TCO. In this case, TCO No. 0914216 was made on 17 July 2009, specifying that certain honeycomb paper and or paperboard are subject to a lower rate of duty as per item 50 of Schedule 4 to the Tariff, effective from 29 April 2009.
The obligations imposed by the Act on the parties involved, particularly the CEO and the applicant, include a duty to ensure that any TCO application meets the specified core criteria. The CEO must publish a notice in the Gazette, inviting submissions from any interested parties who might object to the TCO, as per subsection 269K(1). Additionally, the CEO has an obligation to consider and respond to any submissions received. In this instance, since no submissions were received, the CEO proceeded to issue the TCO. Importers, on the other hand, have the obligation to apply for a refund of duty paid on goods imported after the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Regarding the consequences of breaching the provisions of the Act, it is important to note that the Act does not specify criminal or civil penalties for failing to comply with the TCO requirements. However, the Act ensures that the rights of individuals are protected, and the TCO does not impose any liabilities on any person except the Commonwealth. The primary legal recourse in case of non-compliance would likely be through civil litigation, where the aggrieved party could seek remedies such as injunctions or damages, though such specific provisions are not detailed in the Act itself. The focus remains on ensuring that the tariff concessions are applied correctly and fairly, with the overarching aim of maintaining a transparent and equitable trade environment.