EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929949
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.
Voith Paper Pty Ltd applied for a TCO in respect of certain paper making textiles on 14 August 2009.
Instrument
TCO No 0929949 was made on 06 November 2009. It declares that those certain paper making textiles 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. 0929949 is taken to have come into force on 14 August 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, enacted by the Australian Parliament, provides the framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was introduced to address the gap in providing tariff concessions for goods that are not produced domestically, thereby encouraging imports and supporting industries that rely on imported materials. TCO No. 0929949, issued on 6 November 2009, was made in response to an application by Voith Paper Pty Ltd for tariff concessions on certain paper-making textiles. The Chief Executive Officer of Customs, satisfied that no substitutable goods were produced in Australia, declared these textiles eligible for a tariff concession, effectively setting their duty rate to free, down from the general rate of 5%. This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on goods imported since the effective date of the concession, which is 14 August 2009. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, provides a mechanism for the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs), which grant lower rates of customs duty on certain goods. The Act applies to any person or entity wishing to import goods that may benefit from a tariff concession. The application process requires the CEO to determine whether the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by specific sections of the Act. The geographic reach of the Act is national, given that it is a Commonwealth Act. The application and the resulting TCO, such as Tariff Concession Order No. 0929949, apply to the specific goods identified in the order, which in this instance are certain paper-making textiles. The order exempts these goods from the general rate of duty, which is 5%, making them duty-free. The Act allows for the CEO to make subordinate instruments to further specify the application and effect of TCOs, although no exclusions or exemptions beyond those specified in the Act and its subsidiary legislation were noted in this particular case.
Key Provisions
The Tariff Concession Order (TCO) No. 0929949, made under the Customs Act 1901, applies a lower rate of customs duty to certain paper making textiles, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269C, 269B, 269P). This concession is contingent on the Chief Executive Officer of Customs (CEO) determining that no substitutable goods were produced in Australia on the date the application was lodged (section 269F, 269SJ, 269D, 269E). For the purposes of this TCO, the general duty rate of 5% is waived for the specified textiles, making them duty-free.
Under the Act, any person can apply to the CEO for a TCO if the goods in question do not fall under the exceptions outlined in section 269SJ. The CEO must then assess whether the application meets the core criteria, particularly focusing on whether substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO is required to make a written TCO order (section 269P(3)). For TCO No. 0929949, Voith Paper Pty Ltd applied for and received a concession on 6 November 2009, which became effective on the date of application, 14 August 2009 (subsection 269S(1)).
The CEO is obligated to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). In this instance, no submissions were received, facilitating the implementation of the TCO. Furthermore, the TCO ensures that it does not adversely affect the rights of any person other than the Commonwealth and does not impose any new liabilities (subsection 269S(1)). Importers of the affected goods can apply for a refund of duties paid since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Breach of the provisions under the Customs Act 1901, including the terms of a TCO, may result in various penalties. For instance, knowingly making a false or misleading statement in an application for a TCO could lead to criminal charges. Under section 269Q, an individual could face a penalty of up to 10,000 penalty units for such an offence, reflecting the seriousness of non-compliance. Additionally, any person found to be evading the payment of duty through the misuse of a TCO could be subject to both civil and criminal penalties, including fines and potential imprisonment, as outlined in the relevant sections of the Customs Act 1901.