EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132489
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.
BJ Ball applied for a TCO in respect of certain paper and paperboard on 22 September 2011.
Instrument
TCO No 1132489 was made on 19 December 2011. It declares that those certain paper and paperboard 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. 1132489 is taken to have come into force on 22 September 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 administration of customs duties and the regulation of goods imported into Australia. To address the need for flexibility in tariff rates, Part XVA of the Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty to apply to specified goods, subject to certain conditions. The objective is to provide relief to importers by reducing the duty payable on specific goods, provided these goods are not produced in Australia and do not have substitutable goods available domestically. This mechanism aims to support the import of goods that are not locally manufactured, thereby facilitating trade and potentially lowering costs for businesses and consumers. The process involves an application to the CEO, who must assess whether the application meets the core criteria before issuing a TCO. The introduction of TCO No. 1132489 for certain paper and paperboard products exemplifies this process, resulting in a tariff concession that benefits importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 1132489 under the Customs Act 1901 applies to the concession of customs duty on certain paper and paperboard goods, specified in the application by BJ Ball. The Act applies to any person seeking a tariff concession order (TCO) in respect of goods, provided the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The geographic reach of this legislation is national, as it operates under the Commonwealth's jurisdiction. The instrument’s application is limited to the goods defined in the specific TCO and does not extend to any other goods or industries unless explicitly included in a subsequent TCO. The application of the Act can be further extended or restricted through subordinate instruments, which may provide additional criteria or modify existing provisions. The TCO in question came into effect on the date the application was lodged, 22 September 2011, and it provides a duty-free rate for the specified goods, differing from the general duty rate of 5%. This concession does not affect any pre-existing rights or impose liabilities on individuals or entities for actions taken before the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C specifies the core criteria that must be met for the CEO to consider granting the TCO, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the application meets these criteria, section 269P mandates that the CEO must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing the duty rate for those goods.
The obligations imposed by the Act on the parties involved are primarily focused on ensuring the proper application and processing of TCOs. The applicant must submit a valid application to the CEO, ensuring that all relevant criteria and conditions are met. The CEO, upon receiving a valid application, must then assess whether the core criteria outlined in section 269C are satisfied. If satisfied, the CEO must issue a TCO as per section 269P, declaring the goods to which the lower duty rate applies. Additionally, the CEO is required to publish a notice in the Gazette under section 269K(1), inviting submissions from any interested parties who may have reasons why the TCO should not be made.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in various consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences, it is understood that non-compliance could lead to civil or criminal actions under the broader Customs Act framework. The penalties for breaches of customs laws can include fines and, in severe cases, imprisonment. However, the specific penalties for breaches related to TCOs would need to be referred to the relevant sections of the Customs Act and associated regulations, which may include substantial fines and potential imprisonment for serious violations.