EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114827
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.
Australian Paper applied for a TCO in respect of certain paper and/or paperboard ream feeders on 11 May 2011.
Instrument
TCO No 1114827 was made on 01 August 2011. It declares that those certain paper and/or paperboard ream feeders 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. 1114827 is taken to have come into force on 11 May 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, provides a framework for the regulation of customs and excise through the establishment of a duty on imported goods. The Act was introduced to address the need for a structured approach to the imposition of customs duties and the regulation of goods entering and exiting the country. Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the rate of customs duty on specified goods, provided certain criteria are met. The policy objective is to facilitate trade by reducing the duty on goods that are not produced domestically, thereby making imported goods more competitive in the Australian market. Tariff Concession Instrument No. 1114827, made on 1 August 2011, is an example of such an order, granting a tariff concession on certain paper and/or paperboard ream feeders, reflecting the Act's intent to promote efficient trade practices while ensuring that the domestic production of substitutable goods is not unduly hindered.
Scope and Application
The Tariff Concession Instrument No. 1114827 under the Customs Act 1901 applies to goods, specifically certain paper and/or paperboard ream feeders, for which Australian Paper applied for a Tariff Concession Order (TCO). The application was lodged on 11 May 2011, and the TCO, numbered 1114827, was issued on 1 August 2011 by the Chief Executive Officer of Customs. The instrument declares that the specified goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a zero rate of duty for these goods, whereas the general rate of duty is 5%. The legislation applies to the entities or individuals who import these goods into Australia, thereby benefiting importers by potentially allowing them to claim a refund of duty on imports made since the TCO's effective date, which is the date the application was lodged. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The instrument's application is national, as it pertains to federal customs legislation. The CEO must ensure no substitutable goods are produced in Australia, which was confirmed in this case, leading to the issuance of the TCO.
Key Provisions
The Customs Act 1901, particularly under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F provides the mechanism for an individual or entity to apply to the CEO for a TCO in respect of specific goods. The CEO evaluates whether the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application is for goods that are not specified in section 269SJ, which lists goods that cannot be subject to a TCO, and if the core criteria are met, the CEO must issue a written order, the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations under the Act for the CEO include accepting a valid application for a TCO and determining whether it meets the core criteria. If satisfied, the CEO must publish a notice in the Gazette inviting submissions from any interested parties and subsequently decide on the application. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them in respect of actions taken prior to the TCO's registration. This is particularly important for importers, who, under paragraph 126(1)(r) of the Regulations, can apply for a refund of duty on goods imported since the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can lead to civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in penalties, which may include fines up to a significant amount determined by the severity of the offence. Additionally, persistent or severe violations can lead to criminal charges, potentially resulting in imprisonment. The exact penalties would depend on the specific breach and the discretion of the courts in interpreting the applicable laws.