EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1025825
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.
Paper Force Oceania Pty Ltd applied for a TCO in respect of certain paper and paperboard on 08 June 2010.
Instrument
TCO No 1025825 was made on 30 August 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. 1025825 is taken to have come into force on 08 June 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. 1025825, enacted in 2010, was introduced under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was developed to provide a lower rate of customs duty on certain paper and paperboard products, thereby facilitating the importation of these goods into Australia. The instrument was created in response to an application by Paper Force Oceania Pty Ltd, which sought tariff concessions for their products on the basis that no substitutable goods were produced in Australia at the time of application. The Australian Government, through the Chief Executive Officer of Customs, assessed and approved the application, leading to the creation of this instrument. The policy objective was to ensure that the importation of these specific goods would not be hindered by high customs duties, thereby supporting trade and potentially lowering costs for businesses relying on these imports.
The instrument was enacted by the Australian Government as part of the Customs Act 1901 and became effective on the date the application was lodged, 08 June 2010. The CEO of Customs published a notice in the Gazette inviting submissions from interested parties, though none were received. The instrument ensures that while the rights of importers will be positively affected, no existing rights or liabilities of other parties are disadvantaged or imposed by the concession. This approach aligns with the broader objective of the Customs Act to regulate imports while also promoting fair and efficient trade practices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). The Act facilitates reduced customs duty on goods specified in a TCO, provided certain criteria are met. An application for a TCO can be submitted by any person to the CEO, subject to the condition that the goods in question are not specified in section 269SJ of the Act, which outlines goods that are ineligible for a TCO. For a TCO to be granted, it must be demonstrated that no substitutable goods were produced in Australia on the day the application was lodged, in line with definitions provided in sections 269D and 269E of the Act. This instrument applies nationally, with its geographic reach covering all territories under Commonwealth jurisdiction in Australia. The Act allows for the expansion or restriction of its application through subordinate instruments, though no such instruments are noted in the context of this specific TCO. The rights of the Commonwealth and importers are protected, and the TCO does not disadvantage any person or impose liabilities for actions prior to its registration.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning certain goods. Section 269C outlines the core criteria that must be met for the CEO to grant such an application. Specifically, the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If the application meets these criteria, the CEO must issue a written order declaring the goods to be subject to a reduced rate of customs duty (section 269P).
The Act imposes specific obligations on both the applicant and the CEO. The applicant must submit a valid application to the CEO, ensuring it does not concern goods specified in section 269SJ, which are ineligible for a TCO. The CEO, upon receiving an application, must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed. If no objections are received, the CEO must assess whether the application meets the core criteria and decide accordingly. If the criteria are met, the CEO is required to issue the TCO.
Breaching the requirements of the Act can lead to various consequences. If an entity fails to comply with the provisions related to TCO applications, they may face legal repercussions. For example, submitting an application for goods ineligible under section 269SJ could result in the application being rejected, and the applicant may be subject to penalties for non-compliance. The Act does not specify particular penalties for breaches but implies that non-compliance could lead to administrative or judicial penalties as outlined in other sections of the Act or related legislation.
In summary, the Customs Act 1901 provides a structured process for applying for and granting Tariff Concession Orders, ensuring that certain goods receive reduced customs duties. The obligations on applicants and the CEO are clear, and while specific penalties for non-compliance are not detailed in the Act, the implications of failing to adhere to the legislative requirements can be significant.