EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924337
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 inkjet paper on 10 July 2009.
Instrument
TCO No 0924337 was made on 25 September 2009. It declares that those certain inkjet 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. 0924337 is taken to have come into force on 10 July 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. 0924337 was enacted in 2009 as part of the Customs Act 1901, aiming to provide a concession on customs duty for specific goods. The Customs Act 1901 sets up a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This instrument was introduced to address the issue of applying lower customs duty rates to goods for which a TCO is granted, provided certain criteria are met, including the absence of substitutable goods produced in Australia. The instrument was made following an application by Kodak Australasia for certain inkjet paper, which was approved after satisfying the core criteria outlined in the Act. The Tariff Concession Instrument No. 0924337 was published in the Gazette, with no objections received, and came into force on the date the application was lodged. This initiative is designed to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the commencement date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0924337, established under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) is sought and granted. This legislation is relevant to entities or individuals seeking reduced customs duties on particular goods by applying to the Chief Executive Officer (CEO) of Customs. The scope of the Act includes any goods that are not specified in section 269SJ of the Act, which outlines goods that are ineligible for tariff concessions. The application process requires that, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The TCO mechanism is national in scope, applicable across Australia, and extends to all industries and transactions involving the importation of the specified goods. Exclusions include goods listed in section 269SJ, and the application of the TCO does not impose any liabilities on individuals or entities, nor does it disadvantage anyone by affecting rights as at the date of registration. The CEO is required to publish notices in the Gazette to invite submissions on the proposed TCO, though in this instance, no submissions were received. The TCO itself comes into force on the date the application is lodged, as per subsection 269S(1) of the Act, providing immediate benefit to importers who may apply for refunds of duties paid on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0924337 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer of Customs (CEO) to issue a written order (a Tariff Concession Order, or TCO) for certain goods if specific conditions are met. If the CEO determines that no substitutable goods are produced in Australia on the day the application is lodged (section 269C), the CEO must make a TCO that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For the goods in question, item 50 of Schedule 4 applies, with the general duty rate being 5% and the duty rate for the goods subject to the TCO being free. The CEO must also publish a notice in the Gazette inviting any submissions regarding the TCO application (section 269K(1)), although no submissions were received in this case.
The Act imposes specific obligations and requirements on both the CEO and applicants for TCOs. For the CEO, the obligations include assessing whether the application meets the core criteria by ensuring that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)). For applicants, the requirement is to provide sufficient information and evidence to satisfy the CEO that the application meets the core criteria. In this case, Kodak Australasia applied for the TCO on 10 July 2009, and the CEO made TCO No. 0924337 on 25 September 2009.
Under the Customs Act 1901, breaches of the provisions related to TCOs can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is clear that any failure by the CEO to adhere to the requirements or by an applicant to provide accurate information could result in legal actions. Typically, breaches of customs regulations can lead to penalties such as fines, imprisonment, or both, depending on the severity and intent of the breach. For instance, knowingly making a false statement in an application could lead to criminal charges under section 252 of the Customs Act 1901, which carries potential penalties including fines of up to $22,000 or imprisonment for up to two years, or both, for individuals, and higher penalties for corporations. It is essential for both the CEO and applicants to comply with the statutory requirements to avoid these potential repercussions.