EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1004319
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.
Power Customs Service Pty Ltd applied for a TCO in respect of certain paper and paperboard on 22 January 2010.
Instrument
TCO No 1004319 was made on 30 April 2010. It declares that those certain paper and 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. 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. 1004319 is taken to have come into force on 22 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. 1004319 was enacted in 2010 as part of the Customs Act 1901. This legislation addresses the need to provide tariff concessions on specific goods, facilitating more competitive and accessible trade by reducing the customs duty rates on certain items. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty on goods specified in the order. In this instance, Power Customs Service Pty Ltd applied for a TCO for certain paper and paperboard products, and the CEO was satisfied that the application met the core criteria, leading to the issuance of TCO No. 1004319. The objective of this instrument is to ensure that the importation of these goods is not hindered by high tariff rates, thereby promoting trade efficiency and benefiting importers who can apply for duty refunds.
Scope and Application
The Tariff Concession Instrument No. 1004319 under the Customs Act 1901 applies to specific paper and paperboard products, as determined by the Chief Executive Officer of Customs (CEO). The Act facilitates the granting of Tariff Concession Orders (TCOs) that allow for a lower rate of customs duty on goods that meet specific criteria, particularly where no substitutable goods are produced in Australia. The application of this TCO is confined to the goods specified in the order, which are subject to a duty rate of zero, whereas the general rate of duty on such goods is 5%. This legislation operates on a Commonwealth level and does not extend to state or territory jurisdictions. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; however, it does provide benefits to importers by potentially allowing them to apply for a refund of duty on goods imported since the day the TCO is considered to have come into force. The application process involves the CEO evaluating the core criteria of the TCO application and, if satisfied, making a written order that specifies the goods and the applicable rate of duty.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1004319 are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ of the Customs Act 1901, as well as Schedule 4 to the Customs Tariff Act 1995. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application meets the core criteria, which are defined by sections 269C and 269B, the CEO is required to make a TCO. This order is governed by subsection 269P(3) and specifies that the goods subject to the TCO will have a lower rate of customs duty, in this case, free of charge. The instrument declares that the certain paper and paperboard are goods to which item 50 of Schedule 4 applies, which stipulates the reduced duty rate.
The Act imposes several obligations on parties and entities governed by it. Section 269C requires the CEO to assess whether an application meets the core criteria by determining if no substitutable goods were produced in Australia on the day the application was lodged. Under section 269B, the CEO must also consider the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods." Furthermore, subsection 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must then consider any submissions received and decide whether to proceed with the TCO.
Breaches of the obligations and requirements outlined in the Customs Act 1901 may result in various civil or criminal consequences. The Act does not specify penalties for non-compliance with TCO requirements, but general penalties for breaches of customs legislation can include fines and imprisonment. For instance, under section 245 of the Customs Act 1901, a person who knowingly or recklessly contravenes a provision of the Act can be subject to a fine of up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious offences. Additionally, section 283 imposes penalties for fraudulent conduct related to customs duty, with maximum penalties of fines up to 200,000 penalty units and imprisonment for up to 25 years for the most severe cases.