EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001971
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.
Jasco applied for a TCO in respect of certain inkjet paper on 12 January 2010.
Instrument
TCO No 1001971 was made on 07 April 2010. 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. 1001971 is taken to have come into force on 12 January 2010.
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. 1001971, enacted in 2010, amends the Customs Act 1901 to address the problem of ensuring that certain goods, specifically inkjet paper, receive appropriate tariff concessions when no substitutable goods are produced in Australia. This instrument was introduced to facilitate tariff reductions where necessary to support industry and commerce, thereby aligning with the policy objective of promoting efficient and competitive markets. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated under the Customs Act 1901 to assess and approve Tariff Concession Orders when applications meet the specified criteria. The legislative intent is to ensure that the tariff concessions do not disadvantage existing rights holders and impose no new liabilities, while allowing importers to seek duty refunds for goods imported since the commencement date of the concession.
Scope and Application
The Customs Act 1901, as amended, establishes the framework for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to reduce customs duty rates on specified goods if certain criteria are met. This Act applies to individuals and entities seeking to import goods that are not produced in Australia in the ordinary course of business, thereby qualifying for a tariff concession. The geographic scope of this legislation is national, as it pertains to the Commonwealth of Australia and its customs regulations. An application for a TCO must be submitted to the CEO, who assesses whether the goods in question are not substitutable by locally produced goods. If the application meets the criteria, the CEO issues a written TCO, which effectively reduces the customs duty on the specified goods. The application process includes a public notice in the Gazette, inviting submissions from any interested parties, although no submissions were received for this particular TCO. The commencement date of a TCO is the date the application is lodged, and the order does not retroactively affect any existing rights or liabilities, but importers of the specified goods can apply for duty refunds on imports made from this commencement date onwards.
Key Provisions
The main operative sections of this legislation (section 269F, 269C, 269P, and 269K) establish a framework for the application, assessment, and granting of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the application meets the core criteria, the Chief Executive Officer (CEO) of Customs must make a written order, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
The obligations and requirements imposed by this legislation are primarily on the CEO. The CEO must accept a valid TCO application, assess whether it meets the core criteria by determining if no substitutable goods were produced in Australia on the day the application was lodged, and make a written order if the application meets the criteria. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any interested parties. This process ensures transparency and allows for input from stakeholders before a TCO is granted.
The legislation does not explicitly outline offences or penalties for breach of its provisions. However, non-compliance with the process or misuse of a TCO could potentially lead to civil or criminal consequences under the broader Customs Act 1901. For example, knowingly making a false statement in an application for a TCO could result in criminal penalties, including fines and imprisonment, as outlined in other sections of the Customs Act. Similarly, failing to comply with the notice and submission requirements could lead to administrative penalties. Although the specific penalties are not detailed in the explanatory statement, they would align with the broader legal framework governing customs and tariff matters in Australia.