EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110861
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.
Gunnersen applied for a TCO in respect of certain fibreboard on 30 March 2011.
Instrument
TCO No 1110861 was made on 20 June 2011. It declares that those certain 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. 1110861 is taken to have come into force on 30 March 2011.
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 Australian Parliament, introduced a scheme for Tariff Concession Orders (TCOs) to provide relief on customs duties for certain imported goods. This legislative framework allows the Chief Executive Officer of Customs to reduce the rate of customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. This was intended to address gaps in the availability of specific goods that could not be manufactured domestically, thereby supporting industries and consumers by potentially lowering the cost of these goods. The explanatory statement for Tariff Concession Instrument No. 1110861, made under the Customs Act 1901, clarifies the application process and the specific circumstances under which a TCO was granted for certain fibreboard, resulting in a duty-free status for these goods. The policy objective is to ensure that essential goods are accessible without undue financial burden, thereby benefiting importers and potentially end-users.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 1110861, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. This legislation is designed to facilitate the application process for tariff concessions where the goods in question are not produced domestically and are not covered by exclusions outlined in section 269SJ of the Act. The geographic reach of this Act is national, applying across all states and territories in Australia. The Act mandates that the Chief Executive Officer of Customs (CEO) must assess applications against core criteria, such as the absence of substitutable goods produced in Australia, as specified in sections 269C and 269D. Should the CEO determine that the application meets these criteria, a Tariff Concession Order (TCO) is issued, effectively granting a lower or free rate of customs duty on the specified goods. Notably, the application process requires public consultation, where any interested parties can submit objections, though in this case, no submissions were received. The TCO in question, effective from the date of application, does not retroactively affect existing rights or impose liabilities on any party other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1110861, establish a framework for the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) that lower the customs duty on certain goods. Section 269F allows a person to apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is valid and meets the core criteria in section 269C, the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 1110861, specifically applies to certain fibreboard, reducing the duty from 5% to free.
The Act imposes certain obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ and must verify that the application meets the core criteria. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269B, 269D, and 269E. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although no submissions were received for this instrument.
Failure to comply with the requirements of the Act can lead to various consequences. While the Act does not explicitly outline specific offences or penalties for breaches of TCO provisions, general provisions of the Customs Act 1901 may apply. These could include fines and imprisonment for fraudulent or deliberate non-compliance. The Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any liabilities on any person in respect of actions taken before the TCO was registered.