EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137570
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.
The Duha Group Pty Ltd applied for a TCO in respect of certain paper sheets on 10 November 2011.
Instrument
TCO No 1137570 was made on 30 January 2012. It declares that those certain paper sheets 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. 1137570 is taken to have come into force on 10 November 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, facilitates a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. One such criterion is the absence of substitutable goods produced in Australia at the time of the application. This legislation aims to support industries by reducing the cost of imported goods, thereby making them more competitive with locally produced alternatives. The explanatory statement outlines the process and criteria for making TCOs, including the requirement for public consultation and the effective date of the concession. This mechanism ensures that the concessions do not disadvantage existing rights or impose new liabilities, while also allowing for potential duty refunds for importers of affected goods.
Scope and Application
The Customs Act 1901, under Part XVA, provides for the establishment of Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on specific goods. The Act applies to any person or entity seeking to import goods that qualify for a tariff concession, provided the goods are not specifically excluded under section 269SJ. The geographic reach of this legislation is national, as it is administered by the Chief Executive Officer of Customs under the Commonwealth of Australia. The core criteria for a TCO, as outlined in section 269C, require that no substitutable goods are produced in Australia in the ordinary course of business. TCO No. 1137570, made on 30 January 2012, applies to certain paper sheets and declares these goods to be subject to a free duty rate, rather than the general rate of 5%. The commencement date for this order is 10 November 2011, the date the application was lodged. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties, though in this instance, no submissions were received. The TCO does not retroactively affect any rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 1137570 under the Customs Act 1901 (section 269P) provides a concession on customs duty for specific goods, in this case, certain paper sheets. This instrument is crucial because it allows for a lower rate of customs duty for these goods, which is beneficial to importers who use these goods. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order (Tariff Concession Order or TCO) if satisfied that the application meets the core criteria, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C).
The obligations imposed by this Act on the parties include the requirement for the CEO to assess whether the application for a TCO meets the core criteria (section 269C) and to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). The CEO must also ensure that the TCO is effective from the date the application was lodged (subsection 269S(1)). In this case, the CEO was satisfied that the application met the criteria and issued TCO No. 1137570, declaring that the certain paper sheets are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
In terms of consequences for breaches, the Act does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions. However, general provisions within the Customs Act 1901 and related regulations might apply to any irregularities or fraudulent activities in the customs duty process. For example, subsection 126(1)(r) of the Regulations allows for a refund of duty on goods imported since the TCO came into effect. It is important for parties to adhere to the stipulated criteria and ensure all submissions and applications are accurately made to avoid any potential liabilities or disadvantages that may arise from non-compliance.