EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005389
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 Services Pty Ltd applied for a TCO in respect of certain paper and paperboard on 22 January 2010.
Instrument
TCO No 1005389 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. 1005389 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 Customs Act 1901 was enacted to regulate and administer the importation and exportation of goods in Australia. The Act provides a framework for the imposition and collection of customs duty and other charges, as well as for the control and regulation of goods entering and leaving the country. One of the mechanisms established under the Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain goods. The Tariff Concession Instrument No. 1005389 was introduced to address the specific need of providing tariff concessions for certain paper and paperboard products. This Instrument was enacted by the Chief Executive Officer of Customs (CEO) in accordance with the provisions outlined in Part XVA of the Customs Act 1901. The policy objective behind this measure is to facilitate the importation of these goods by lowering the customs duty rate, thereby potentially reducing costs for importers and enhancing the competitiveness of these products in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 1005389 under the Customs Act 1901 applies to any person or entity seeking tariff concessions for specified paper and paperboard goods. These goods benefit from a tariff rate of free duty, which is lower than the general rate of 5%. The Act applies at a Commonwealth level, impacting all territories and states across Australia. The geographic reach is national, ensuring uniform application of the tariff concession across the country. The concessions are granted upon the satisfaction of the Chief Executive Officer of Customs that no substitutable goods are produced in Australia, as per the outlined criteria in sections 269C and 269D of the Act. The application process includes a mandatory publication in the Gazette inviting public submissions, although in this case, no submissions were received. The instrument came into force on the date the application was lodged, 22 January 2010, and it does not affect the rights of any person prior to its registration nor impose any liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 1005389, made under the Customs Act 1901, outlines the application of a Tariff Concession Order (TCO) to certain paper and paperboard (section 269P). The key operative section here is section 269P, which sets the criteria for the Chief Executive Officer (CEO) of Customs to assess whether an application for a TCO meets the core requirements. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods to which the concession applies (subsection 269P(3)). In this case, the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria (section 269C). Consequently, TCO No. 1005389 was issued on 30 April 2010, declaring that the specified paper and paperboard are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free instead of the general rate of 5% (section 269P(3)).
Under the Customs Act 1901, the obligations primarily rest with the applicant and the CEO. The applicant must ensure that their TCO application is valid and meets the core criteria outlined in section 269C, which includes demonstrating that no substitutable goods are produced in Australia. The CEO, upon receiving a valid application, must assess whether it meets the core criteria, publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)), and make a written order if the criteria are met (subsection 269P(3)). In this instance, the CEO did not receive any submissions against the TCO application and proceeded to issue TCO No. 1005389 (subsection 269K(1)).
The Customs Act 1901 does not explicitly detail specific offences, penalties, or consequences for breaches related to the issuance or misuse of a TCO. However, the general legislative framework under which TCOs are made may include provisions for penalties for misrepresentation or fraudulent applications. Any breach of the Customs Act 1901, including improper use of a TCO, could result in civil or criminal penalties. The maximum penalties for breaches of the Customs Act 1901 can vary significantly depending on the nature and severity of the breach, but they may include substantial fines and, in serious cases, imprisonment. It is essential for applicants and users of TCOs to ensure compliance with all relevant provisions to avoid any potential penalties.