EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932237
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.
Sonoco Australia applied for a TCO in respect of certain paperboard on 31 August 2010.
Instrument
TCO No 0932237 was made on 06 January 2010. It declares that those certain 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. One submission objecting to the TCO application was received from Paper Australia Pty Ltd.
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. 0932237 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0932237, enacted in 2010, addresses a gap in the Customs Act 1901 by providing a mechanism for tariff concessions for specific goods. This legislation was introduced to support the policy objective of reducing customs duty on certain imported goods, thereby facilitating trade and benefiting importers. The Customs Act 1901, enacted by the Australian Parliament, allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to apply lower rates of customs duty on goods, provided they meet the specified criteria. In this instance, Sonoco Australia applied for a TCO on certain paperboard, and the order was granted after it was determined that no substitutable goods were produced in Australia. This initiative is designed to encourage trade and economic efficiency by reducing the cost of importing specific goods.
Scope and Application
The Tariff Concession Instrument No. 0932237 under the Customs Act 1901 applies specifically to goods that are subject to a Tariff Concession Order (TCO), which in this case pertains to certain paperboard. The legislation allows the Chief Executive Officer of Customs to issue a TCO that provides a lower rate of customs duty for specified goods, provided certain criteria are met. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business. The application of this legislation is primarily directed towards entities such as importers and producers who are directly involved in the importation or production of goods that might be subject to a TCO. The geographic reach of this Act is national, as it is a Commonwealth statute, and it applies uniformly across Australia. There are exclusions specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO, such as those that are already being produced domestically in a substitutable form. The Act may also extend its application through subordinate instruments, which could further define terms or provide additional conditions under which a TCO may be granted or modified.
Key Provisions
The Customs Act 1901 establishes a framework where the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCO) under section 269F (1). These orders apply a reduced rate of customs duty on specified goods. To qualify for a TCO, a person must apply to the CEO for such an order in respect of goods (section 269F (1)). The CEO must ensure the application is not for goods specified in section 269SJ, which are ineligible for a TCO. The CEO must then determine if the application meets the core criteria outlined in section 269C. This involves confirming that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The obligations under the Customs Act 1901 for entities applying for a TCO include providing all necessary information to the CEO to demonstrate that the core criteria are met. This involves showing that no substitutable goods were produced in Australia. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the application. This is mandated by subsection 269K(1). The CEO must also consider any submissions received, such as the one from Paper Australia Pty Ltd objecting to the TCO application for certain paperboard. Once the CEO is satisfied that the application meets the criteria, they must issue a written order declaring the specified goods to be subject to a TCO. This process ensures transparency and allows for stakeholder input before a TCO is issued.
Failure to comply with the requirements set out in the Customs Act 1901, such as providing misleading information in a TCO application, could result in various consequences. While the Act does not explicitly state civil or criminal penalties for breaches, general provisions of the Customs Act and related legislation could apply. For example, providing false information to the CEO could be considered an offence under section 252 of the Customs Act 1901, which carries a maximum penalty of 2,500 penalty units or imprisonment for five years, or both, depending on the severity of the breach. Additionally, any failure to comply with the terms of a TCO could result in the imposition of duties retroactively or other administrative actions as deemed appropriate by the CEO.