EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508909
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.
Orica Australia Pty Ltd applied for a TCO in respect of certain Butyl Glycol on 11 July 2005.
Instrument
TCO No 0508909 was made on 23 September 2005. It declares that those certain Butyl Glycol 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 0%.
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. 0508909 is taken to have come into force on 11 July 2005.
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 Parliament of Australia, governs the regulation of goods entering and leaving the country, including the imposition of customs duties. In particular, Part XVA of the Act provides for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on specified goods under certain conditions. The Tariff Concession Instrument No. 0508909, made on 23 September 2005, is an example of such an order, declaring that certain Butyl Glycol are subject to a 0% duty rate, down from the general rate of 5%. This was enacted to address the problem of ensuring that Australian industries remain competitive by providing tariff relief where appropriate. The Chief Executive Officer of Customs (CEO) has the authority to make these orders if satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria set out in the Act. The CEO's decision-making process includes a requirement to publish notices in the Gazette and consider any submissions received, although in this instance, no submissions were made.
Scope and Application
The Tariff Concession Instrument No. 0508909, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain Butyl Glycol, and is directed towards entities such as Orica Australia Pty Ltd that seek tariff concessions for imported goods. This instrument is a Commonwealth instrument, with its scope and application governed by federal legislation. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders, which can reduce the customs duty on specific goods to zero if no substitutable goods are produced in Australia, aligning with the criteria set out in section 269C. The instrument extends its application to those who import the specified Butyl Glycol, providing them with a lower rate of customs duty as per the terms of the TCO. This instrument does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. Additionally, the instrument’s commencement is effective from the date the application for the tariff concession was lodged, ensuring that any imports after this date are eligible for the reduced duty rate.
Key Provisions
The Tariff Concession Instrument No. 0508909 (the Instrument) under the Customs Act 1901 establishes a concession for specific Butyl Glycol imports, reducing the duty rate from 5% to 0%. This is achieved through the creation of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) following an application by Orica Australia Pty Ltd. Section 269F of the Act enables the application for a TCO, and section 269C mandates that the CEO considers the core criteria to determine the validity of the application. For the CEO to issue a TCO, it must be established that no substitutable goods were produced in Australia on the date the application was lodged, as outlined in sections 269C, 269D, and 269E of the Act.
The obligations under the Instrument involve the CEO ensuring that the application meets the specified criteria and publishing a notice in the Gazette (section 269K(1)) to invite submissions from interested parties. In this case, no submissions were received, leading to the CEO's satisfaction that the TCO can be issued. The TCO, which came into force on the date of the application, July 11, 2005, as per section 269S(1) of the Act, does not affect any existing rights or impose new liabilities on any party except the Commonwealth. Importers benefit from this TCO by potentially applying for duty refunds on goods imported from the effective date.
Should any party fail to comply with the requirements outlined in the Act or the Instrument, there may be civil or criminal consequences. However, the specific offences, penalties, or consequences are not detailed in the provided text. The Act, in general, allows for various penalties depending on the nature and severity of the breach, which could include fines, imprisonment, or both. For instance, section 269 of the Act may provide for financial penalties for non-compliance, while section 270 could impose imprisonment terms for more serious breaches. These penalties serve to enforce adherence to the regulatory framework and ensure the integrity of the customs duty system.