EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1036528
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 Agencies Pty Ltd applied for a TCO in respect of certain paper and paperboard on 09 August 2010.
Instrument
TCO No 1036528 was made on 23 March 2011. 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. 1036528 is taken to have come into force on 09 August 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, addresses the issue of providing tariff concessions on specific goods to promote trade and economic efficiency. This Act allows for the establishment of a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders enable the application of lower rates of customs duty on goods that meet certain criteria, specifically when no substitutable goods are produced in Australia. The policy objective underlying this legislation is to facilitate the import of goods that are not domestically produced, thereby supporting industry competitiveness and consumer choice.
The Tariff Concession Instrument No. 1036528, issued on 23 March 2011, applies these provisions to certain paper and paperboard products, granting them a free rate of duty instead of the general 5% rate. This concession was granted following an application by Paper Agencies Pty Ltd and subsequent satisfaction by the CEO of the Customs that no substitutable goods were produced in Australia at the time of application. The instrument does not disadvantage any person or impose new liabilities, ensuring that the rights of importers are preserved and potentially benefiting them through duty refunds for imports made since the effective date of the order.
Scope and Application
The Tariff Concession Instrument No. 1036528 pertains to a specific instance under the Customs Act 1901, where the Chief Executive Officer of Customs has granted a Tariff Concession Order (TCO) for certain paper and paperboard. The Act applies to any individual or entity that imports goods subject to a TCO and benefits from the reduced or waived customs duty rates outlined in the order. This legislation is applicable nationally across Australia, as it falls under the purview of Commonwealth law. The application of this particular TCO, however, is limited to goods specified in the Instrument, in this case, certain paper and paperboard, and it does not apply to goods that are already being produced in Australia or to those goods explicitly excluded under section 269SJ of the Act. The TCO was effective from the date the application was lodged, 09 August 2010, and does not retroactively affect any duties or rights accrued before this date. Any subordinate instruments or regulations that may extend or restrict the application of this TCO are governed by the Customs Tariff Act 1995 and related regulations.
Key Provisions
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 1036528, outlines the procedure for granting tariff concessions on certain goods. Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application meets the core criteria specified in section 269C, the CEO must make a written TCO, declaring that the goods in question are subject to a lower rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. Specifically, in this instance, the TCO No. 1036528, made on 23 March 2011, declares that certain paper and paperboard are subject to a duty rate of free, as opposed to the general rate of 5% (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that the goods in question do not have substitutable goods produced in Australia as per section 269C. This includes determining that no such substitutable goods were produced in Australia on the day the application was lodged. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who may oppose the TCO. In this case, no submissions were received, facilitating the approval of the TCO.
Failure to comply with the provisions of the Customs Act 1901 or the terms of the TCO can result in significant consequences. While the explanatory statement does not explicitly detail specific offences or penalties, it is understood that breaches of customs regulations generally attract severe penalties. The Customs Act 1901 and associated regulations provide for both civil and criminal penalties, including fines and imprisonment, for non-compliance. The exact penalties depend on the nature and severity of the breach, but they can be substantial, reflecting the importance of adhering to customs regulations.
The Tariff Concession Instrument No. 1036528 provides clear directives on the application process for tariff concessions, ensuring that the rights of importers are protected and that the process is transparent and inclusive. By specifying that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, the Act safeguards against any retroactive disadvantages or liabilities. Importers, therefore, can benefit from applying for duty refunds for goods imported since the TCO came into force on 09 August 2010, as per paragraph 126(1)(r) of the Regulations.