EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935341
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.
Australian Paper Pty Ltd applied for a TCO in respect of certain paper pulp discharge scraper machine gearboxes on 21 September 2009.
Instrument
TCO No 0935341 was made on 04 December 2009. It declares that those certain paper pulp discharge scraper machine gearboxes 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. 0935341 is taken to have come into force on 21 September 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. 0935341 was enacted to provide tariff concessions under the Customs Act 1901. This legislative instrument was introduced to address the specific need of Australian Paper Pty Ltd for a reduced customs duty rate on certain paper pulp discharge scraper machine gearboxes, which would otherwise be subject to a general duty rate of 5%. The instrument was crafted to ensure that the application of tariff concessions aligns with the core criteria stipulated in the Customs Act, namely that no substitutable goods were produced in Australia at the time the application was lodged. The instrument was made by the Chief Executive Officer of Customs, who determined that the application met the criteria for a tariff concession order.
The primary objective of this legislation, as outlined in the explanatory statement, is to facilitate the import of specified goods under a lower customs duty rate when it is established that these goods are not being produced domestically in a manner that would substitute the need for importation. The instrument was subject to a consultation period where no objections were received, and it came into effect on the date the application was lodged, 21 September 2009. Importantly, the instrument ensures that the rights of importers are protected, allowing them to seek refunds for duties paid prior to the instrument's effective date, while not imposing any new liabilities on any party.
Scope and Application
The Tariff Concession Instrument No. 0935341 under the Customs Act 1901 applies specifically to certain paper pulp discharge scraper machine gearboxes, benefiting Australian Paper Pty Ltd by granting a tariff concession on these goods. The instrument was initiated when the company applied for a Tariff Concession Order (TCO) on 21 September 2009, which was subsequently approved by the Chief Executive Officer of Customs on 4 December 2009, as no substitutable goods were produced in Australia. This concession lowers the duty rate from the general 5% to free, thereby providing economic relief to the importer. The legislation’s scope is geographically national, as it pertains to goods imported into Australia and regulated by Commonwealth laws. The instrument does not disadvantage any person or impose new liabilities on anyone, and it benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. The TCO does not extend to goods specified in section 269SJ of the Customs Act, which lists items ineligible for such concessions.
Key Provisions
The main operative sections of this legislation revolve around the process and criteria for applying and obtaining a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows for an application to be made by a person to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. Section 269C outlines the core criteria that must be met for the application to be considered. This includes ensuring that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO determines that the application meets the core criteria, they must issue a written order (section 269P(3)), which is the TCO itself, specifying the reduced duty rate applicable to the goods in question.
The obligations imposed by the Act on the parties involved are primarily centred on the application process. The applicant must ensure that their application is valid and that it meets the criteria set out in section 269C. The CEO, on their part, has the responsibility to review the application, verify the criteria, and decide whether to issue a TCO. Once a TCO is issued, the CEO must also ensure that a notice is published in the Gazette inviting any interested parties to submit their views on whether the TCO should be made (subsection 269K(1)). In this instance, no submissions were received, which indicates that the process was followed correctly, and the TCO was issued without opposition.
Regarding penalties and consequences for breach, the Customs Act 1901 does not explicitly detail specific offences or penalties for failing to comply with the TCO process. However, it is reasonable to infer that any breaches related to customs duties or fraudulent activities could attract penalties under the broader customs legislation. Typically, penalties for customs-related offences can include fines and imprisonment, although the exact penalties would depend on the specific breach and the applicable sections of the Customs Act. The Act ensures that the rights of importers will be beneficially affected, and it explicitly states that the TCO does not impose any liabilities on any person, which underscores the protective nature of the legislation for those who comply with its provisions.