EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1013383
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.
Upm Raflatac Pty Ltd applied for a TCO in respect of certain thermal imaging paper on 17 March 2010.
Instrument
TCO No 1013383 was made on 11 June 2010. It declares that those certain thermal imaging 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. 1013383 is taken to have come into force on 17 March 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders are designed to address the problem of imposing lower customs duties on specific goods when no substitutable goods are produced in Australia, thereby encouraging trade and economic efficiency. The objective of this legislative instrument is to facilitate the application process for such concessions, ensuring that eligible goods benefit from reduced duty rates. In this instance, Tariff Concession Instrument No. 1013383 was issued on 11 June 2010, following an application by UPM Raflatac Pty Ltd for certain thermal imaging paper, resulting in a duty rate reduction from 5% to free, effective from 17 March 2010. The process involved ensuring that no objections were raised against the application, which was subsequently accepted and published in the Gazette.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, allows the Chief Executive Officer of Customs to apply reduced customs duties on certain goods, provided they meet specified criteria. This scheme applies to individuals or entities that apply for a TCO for goods not listed as ineligible under section 269SJ of the Act. For instance, UPM Raflatac Pty Ltd applied for a TCO for specific thermal imaging paper, which was subsequently granted, resulting in a tariff concession from 5% to free. The Act ensures that no existing rights or liabilities of persons other than the Commonwealth are adversely affected by the TCO, meaning that while the rights of importers are positively impacted by reduced duty, no new liabilities are imposed on any party. The TCO applies nationally, and its scope is further defined by the Customs Tariff Act 1995, which specifies the reduced duty rates for eligible goods. The process also mandates public consultation, although in this instance, no submissions were received in response to the published notice.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO reduces the customs duty rate on specified goods. An application for a TCO can be made if the goods are not listed in section 269SJ, which excludes certain goods from TCO eligibility. The CEO must then determine if the application meets the core criteria outlined in section 269C. This requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D, 269E, and 269P(3)). If these criteria are satisfied, the CEO must issue a written TCO, specifying the applicable rate under Schedule 4 of the Customs Tariff Act 1995.
Entities subject to the Act, such as importers and manufacturers, must ensure their applications for TCOs meet the specified criteria, including providing evidence that no substitutable goods are being produced in Australia. This involves demonstrating the uniqueness of the goods and their non-substitutability with any Australian-produced items. Importers, in particular, must be aware of their rights under the Regulations, including the ability to apply for duty refunds on goods imported since the effective date of the TCO. The CEO has a responsibility to publish notices in the Gazette inviting submissions on TCO applications, though no submissions were received for TCO No. 1013383.
The Act also outlines the obligations of the CEO in processing TCO applications. Upon accepting an application, the CEO must publish a notice in the Gazette and provide an opportunity for interested parties to submit objections or reasons why the TCO should not be granted. If no submissions are received, the CEO proceeds to issue the TCO. The CEO must also ensure that the TCO does not disadvantage any person by imposing liabilities for actions taken before the TCO's registration date. The effective date of the TCO is the same as the date the application was lodged, meaning that importers can benefit immediately from the reduced duty rate.
Failure to comply with the requirements of the Customs Act 1901, including the submission of accurate and complete TCO applications, may result in penalties. While the specific penalties are not detailed in the explanatory statement, breaches of the Act generally incur civil or criminal penalties, which can include fines and imprisonment depending on the severity and nature of the breach. The maximum penalties for such offences would be determined by the relevant courts based on the specific provisions of the Act and any applicable regulations.