EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920263
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.
Kodak Australasia applied for a TCO in respect of certain ink jet paper on 16 June 2009.
Instrument
TCO No 0920263 was made on 14 September 2009. It declares that those certain ink jet 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. 0920263 is taken to have come into force on 16 June 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. 0920263 was enacted under the Customs Act 1901 to address the specific need for tariff concessions on certain goods that are not produced in Australia and for which there are no substitutable alternatives. The instrument was introduced to facilitate the import of ink jet paper by Kodak Australasia, ensuring that these goods benefit from a reduced customs duty rate, effectively making them duty-free. The Tariff Concession Orders (TCO) scheme, outlined in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to apply tariff concessions if certain criteria are met, primarily that no substitutable goods are produced in Australia. This measure aims to support industries that rely on imported goods not locally manufactured, thereby enhancing competitiveness and reducing costs. The instrument came into force on the date of the application, 16 June 2009, without any submissions against it, ensuring a smooth transition benefiting importers of the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0920263 under the Customs Act 1901 applies specifically to ink jet paper, granting tariff concessions to certain goods that meet the criteria set out in the Act. This legislation enables the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) for goods that are not produced in Australia and for which no substitutable goods are produced domestically. The TCO applies to Kodak Australasia’s application for certain ink jet paper, declaring these goods as eligible for a tariff concession, thereby reducing the general duty rate of 5% to a duty-free rate. The application of this Act is limited to the Commonwealth jurisdiction, and it does not disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date. The CEO must consult by publishing a notice in the Gazette, inviting submissions, although in this case, no submissions were received. The TCO commences on the date the application was lodged, in this instance, 16 June 2009.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are found in Part XVA. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the application is not for goods that cannot be subject to a TCO as outlined in section 269SJ, the CEO must assess whether the application meets the core criteria stipulated in section 269C. This core criterion is met if, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The Act imposes several obligations on the parties involved. The CEO is required to determine the validity of TCO applications by assessing whether they meet the core criteria, which involves verifying that no substitutable goods are produced in Australia at the time of the application. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made, as mandated by section 269K(1). Once a TCO is made, it applies from the date the application was lodged, as per section 269S(1).
Failure to comply with the requirements of the Act can lead to several consequences. Although the Explanatory Statement does not explicitly detail offences or penalties for breaching the TCO provisions, the broader framework of the Customs Act 1901 includes potential penalties for non-compliance with customs regulations. These could include fines and imprisonment for more severe breaches. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Act.
In summary, the Act's provisions for TCOs require careful consideration of the core criteria to ensure that the concession applies only to goods that are genuinely not produced in Australia. The CEO's role in assessing applications and publishing notices is critical to maintaining the integrity of the tariff concession scheme. The Act also ensures that the rights of importers are protected, with the potential for duty refunds on goods imported since the TCO's effective date, while not imposing any new liabilities on persons other than the Commonwealth.