EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119245
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 Choice Pty Ltd applied for a TCO in respect of certain printing paper on 15 June 2011.
Instrument
TCO No 1119245 was made on 17 October 2011. It declares that those certain printing 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. 1119245 is taken to have come into force on 15 June 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 was enacted by the Commonwealth Parliament to provide for the regulation of customs and excise. The Act was amended to include Part XVA, which enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders can reduce the rate of customs duty on specified goods, provided certain criteria are met. This legislative provision aims to address the problem of ensuring that Australian businesses can access imported goods at reduced costs, thereby promoting competitive markets and economic efficiency. In the case of Tariff Concession Instrument No. 1119245, issued in 2011, Paper Choice Pty Ltd successfully applied for a TCO on certain printing paper, resulting in a reduction of customs duty from 5% to free, effective from the date of the application. The policy objective is to facilitate the availability of certain goods in the Australian market without imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can result in a reduced rate of customs duty on specified goods. This legislative framework applies to any person who can apply for a TCO in respect of goods, provided that the goods are not those specified in section 269SJ of the Act that are ineligible for tariff concessions. The process requires that on the day the application is lodged, no substitutable goods should be produced in Australia in the ordinary course of business. Once the application meets the core criteria, the CEO must issue a written TCO, as was done for Paper Choice Pty Ltd's application regarding certain printing paper on 17 October 2011. The TCO, effective from the date the application was lodged, grants tariff concessions that benefit importers of these goods, who can apply for a refund of duty from the effective date. Notably, the TCO does not affect existing rights or impose new liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1119245 (the Instrument) are contained within Part XVA of the Customs Act 1901 (the Act). Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). This application process is further defined in section 269C, which sets out the core criteria that must be satisfied for a TCO to be considered. Section 269SJ outlines the goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) as stated in section 269P(3).
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the criteria that must be met. Section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to submit a response to the CEO. The CEO must then consider any submissions received in determining whether to proceed with the TCO.
The Instrument also sets out the consequences of breaching any provisions under the Act. The Customs Act 1901 does not explicitly detail offences, penalties, or consequences for breach in the explanatory statement. However, generally speaking, under Australian law, breaches of the Customs Act 1901 can result in substantial fines and/or imprisonment, depending on the nature and severity of the breach. The specifics of penalties would be guided by the broader legal framework under which the Act operates, including the Crimes Act 1914 and other relevant legislation.
In summary, the Instrument establishes a framework for the application and issuance of TCOs, ensuring that the process is transparent and inclusive. The obligations placed on the CEO and applicants are designed to ensure that TCOs are granted fairly and in accordance with the criteria outlined in the Act. While the explanatory statement does not detail specific penalties for breach, it is understood that breaches of the Customs Act 1901 can lead to significant legal consequences.