EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044906
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.
Ventech Australia Pty Ltd applied for a TCO in respect of certain low density fibreboard on 05 October 2010.
Instrument
TCO No 1044906 was made on 12 January 2011. It declares that those certain low density fibreboard 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. 1044906 is taken to have come into force on 05 October 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 by the Parliament of Australia to provide for the administration of customs and excise, including the collection of duties and taxes. In 2011, Tariff Concession Instrument No. 1044906 was introduced to address a specific issue regarding the application of customs duty on certain low density fibreboard. This instrument was developed in response to an application from Ventech Australia Pty Ltd, which sought tariff concessions for the imported fibreboard. The objective of this instrument, as articulated in the explanatory statement, is to ensure that the application of duty aligns with the provisions of the Customs Act and the Customs Tariff Act 1995, facilitating the importation of goods under more favourable tariff conditions where appropriate. The instrument was made by the Chief Executive Officer of Customs following consultation and without any adverse submissions, and it came into force on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1044906 under the Customs Act 1901 applies to certain low density fibreboard, specifically those goods for which Ventech Australia Pty Ltd applied for tariff concessions on 5 October 2010. The instrument was made on 12 January 2011 and declares that these specific low density fibreboard are to be treated under item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%. The application of this Instrument is confined to the goods specified in the application and is effective from the date the application was lodged, ensuring that rights of importers are beneficially affected without imposing any liabilities on persons other than the Commonwealth. This instrument operates within the framework set by the Customs Act 1901, and the application process and criteria are detailed under Part XVA of the Act, which governs the making of Tariff Concession Orders by the Chief Executive Officer of Customs.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines a mechanism for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (s 269F). A TCO reduces the rate of customs duty on specified goods, provided the CEO determines that the application meets certain criteria (s 269C, s 269B). The core criteria include the absence of substitutable goods produced in Australia on the day the application is lodged (s 269C, s 269D, s 269E). If the CEO is satisfied that the application meets these criteria, a written TCO is issued (s 269P(3)).
The obligations imposed by the Act include the CEO's requirement to decide whether an application for a TCO meets the core criteria and to issue a TCO if satisfied (s 269F, s 269C, s 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made (s 269K(1)). In the case of TCO No. 1044906, the CEO issued a TCO for certain low density fibreboard on 12 January 2011, declaring these goods to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
Breaching the requirements set forth in the Customs Act 1901 can result in both civil and criminal consequences. The Act does not specify maximum penalties for breaches; however, general provisions in the Customs Act 1901 and associated regulations may apply. These could include fines and imprisonment for wilful or negligent breaches. Importers may also face penalties for non-compliance with the refund of duty provisions under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person for actions taken before the TCO's effective date (s 269S(1)).