EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116834
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.
Detmold Packaging Pty Ltd applied for a TCO in respect of certain waxing kraft paper on 26 May 2011.
Instrument
TCO No 1116834 was made on 19 August 2011. It declares that those certain waxing kraft paper 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. 1116834 is taken to have come into force on 26 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, governs the administration of customs and excise in Australia. To address the need for tariff concessions on certain imported goods, Part XVA of the Act was introduced, enabling the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders provide a lower rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. Detmold Packaging Pty Ltd applied for such a concession for certain waxing kraft paper, leading to the issuance of TCO No. 1116834 on 19 August 2011. This order grants a duty-free status to the specified goods, effective from the date the application was lodged, 26 May 2011, without adversely affecting the rights of any person under the Act. The TCO aims to benefit importers by allowing them to apply for a refund of duty on the specified goods imported since the effective date of the order.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking a reduction in customs duty on imported goods that are not produced domestically and for which no suitable substitute is manufactured in Australia. The scope of this legislation extends to any person or entity that applies for a TCO in respect of specific goods, provided the application adheres to the criteria set out in the Act. The Act applies on a national level, as it is a Commonwealth Act, and its provisions are applicable across Australia. The Act excludes certain goods from eligibility for a TCO, as specified in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may be further defined or extended through subordinate instruments, such as regulations, which can provide additional details or clarifications on the application of the core provisions. The Tariff Concession Instrument No. 1116834, for example, specifically addresses the application of a TCO to certain waxing kraft paper, illustrating how the Act's broad provisions are applied to particular cases.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, while section 269C specifies the core criteria that must be met for an application to be considered valid. Section 269P(3) mandates that if the CEO determines that an application meets these core criteria, a TCO must be issued. Section 269SJ, however, outlines the types of goods that are ineligible for TCOs.
The Customs Act imposes specific obligations on both applicants and the CEO regarding TCOs. Applicants must ensure that their applications meet the core criteria set out in section 269C, which includes verifying that no substitutable goods are produced in Australia. The CEO, upon receiving an application, is required to publish a notice in the Gazette (subsection 269K(1)) and consider any submissions received in response. If the CEO is satisfied that the application meets the criteria and no objections are validly lodged, they must issue a TCO (subsection 269P(3)). The TCO then comes into force on the date the application was lodged (subsection 269S(1)).
The Act does not explicitly detail offences or penalties for breaching the provisions related to TCOs. However, general principles under the Customs Act may apply, including potential penalties for non-compliance with customs regulations. For instance, failing to adhere to the conditions set out in a TCO or providing false information in an application could lead to administrative penalties, fines, or other legal consequences as deemed appropriate under the broader customs framework. Although the specific penalties are not outlined in the explanatory statement, they would typically be determined based on the severity of the breach and the applicable laws governing customs administration in Australia.