EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929951
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 0929951 was made on 06 November 09. 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. 0929951 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 a framework for the imposition and collection of customs duties and the regulation of imports and exports. The Act was introduced to address the need for a systematic approach to managing customs duties and ensuring the efficient flow of goods across Australia’s borders. Specifically, it provides the authority for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower customs duties on certain goods. The 2010 Explanatory Statement relates to Tariff Concession Instrument No. 0929951, which was introduced to provide a concession on customs duty for specific paper making textiles, aligning with the policy objective to support industries by reducing the cost of imported goods, thereby making them more competitive in the Australian market. This instrument was enacted without any adverse effect on the rights of any person as it came into force from the date of the application, allowing importers to apply for refunds of duties paid prior to the concession.
Scope and Application
The Tariff Concession Instrument No. 0929951 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain paper making textiles, and is targeted at entities involved in the importation of these goods. This instrument is applicable nationally within Australia, operating under the federal jurisdiction, and facilitates the reduction of customs duties for specific goods that are not produced domestically in an ordinary course of business. The instrument extends its application through the Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs, ensuring that no substitutable goods were being produced in Australia on the day the application was lodged. The TCO exempts these particular paper making textiles from the general rate of customs duty, setting it to zero instead of the usual 5%, thus providing tariff relief to importers of these goods. There are no exclusions or exemptions specified beyond the criteria outlined in the Act, and the instrument's effect is limited to the goods and the date of its registration, without retroactive application.
Key Provisions
The Tariff Concession Order No. 0929951, made under the Customs Act 1901 (the Act), pertains to the reduction of customs duty on certain paper-making textiles (sections 269C, 269P(3)). The main operative sections require that an application for a Tariff Concession Order (TCO) be assessed by the Chief Executive Officer of Customs (the CEO) to determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business (sections 269C, 269D, 269E). If these criteria are satisfied, the CEO must make a written order applying a lower rate of customs duty, as specified in the order, to the goods in question (section 269P(3)). In this case, the TCO No. 0929951 declares that the paper-making textiles are subject to a free rate of duty instead of the general rate of 5%.
The Act imposes specific obligations on the CEO, including the assessment of TCO applications to ensure they meet the core criteria and the publication of notices in the Gazette inviting submissions from interested parties (subsection 269K(1)). The CEO must also ensure that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, the Act requires that the TCO not affect the rights of any person as at the date of registration, particularly ensuring that no liabilities are imposed on any person in respect of actions taken before the TCO's effective date (subsection 269S(1)).
Any failure to comply with the provisions of the Act may lead to civil or criminal consequences. However, the Explanatory Statement does not detail specific offences or penalties. Typically, breaches of customs regulations can result in fines, imprisonment, or both, depending on the severity and intent behind the breach. The maximum penalties can vary widely based on the specific nature of the offence, but they can include substantial fines and imprisonment terms for more serious infractions. It is essential for entities and individuals governed by this legislation to adhere strictly to the stipulated requirements to avoid any potential legal repercussions.