EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511525
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 detonation boosters on 02 September 2005.
Instrument
TCO No 0511525 was made on 25 November 2005. It declares that those certain detonation boosters 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. 0511525 is taken to have come into force on 02 September 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 Australian Parliament, facilitates the application of lower rates of customs duty on certain goods through Tariff Concession Orders (TCOs). This mechanism was introduced to address the need for targeted tariff reductions to support industries, particularly those where locally produced substitute goods are not available. TCOs are issued by the Chief Executive Officer of Customs, following applications from interested parties, and are contingent on the absence of substitutable goods being produced in Australia. The instrument, Tariff Concession Instrument No. 0511525, was enacted to provide a free rate of duty on certain detonation boosters, effective from the date of the application, 2 September 2005. The policy objective is to support the industry by reducing the cost of imported goods, thereby ensuring that Australian businesses remain competitive without imposing any liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0511525, made under the Customs Act 1901, applies to the specific detonation boosters for which Orica Australia Pty Ltd applied, following the procedures outlined in section 269F of the Act. This instrument was created to provide tariff concessions for these goods, in line with the criteria set out in sections 269C and 269P of the Act. The application for a Tariff Concession Order (TCO) must meet the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. The instrument itself declares that the detonation boosters in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to free. The application of this TCO is effective from the date it was lodged, as per subsection 269S(1) of the Act, and it does not retroactively affect any rights or liabilities of parties other than the Commonwealth.
Key Provisions
The primary sections of this legislation establish the procedure for Tariff Concession Orders (TCO) under the Customs Act 1901 (the Act). Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C requires the CEO to determine whether the application meets the core criteria, which is satisfied if no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If the core criteria are met, the CEO must make a written TCO (section 269P(3)), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies to the goods (subsection 269P(3)).
The legislation imposes several obligations on the parties involved. Firstly, the CEO is required to publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). This is to ensure transparency and provide an opportunity for stakeholders to voice their concerns. Secondly, Orica Australia Pty Ltd, the applicant, must ensure their application meets the core criteria, specifically that no substitutable goods were produced in Australia on the application date.
The Act does not specify offences or penalties for failing to comply with the requirements of the TCO process. However, if the CEO makes an error in determining that an application meets the core criteria, they may be subject to legal challenge or review. There are no explicit criminal or civil penalties outlined for breaches of the TCO provisions, but any errors or misapplications could potentially be addressed through judicial review or other legal remedies. The rights of importers are protected, as they will be able to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In summary, this legislation sets out a clear process for applying for and granting TCOs under the Customs Act 1901, ensuring that the CEO follows a transparent and inclusive approach in determining whether an application meets the core criteria. The Act protects the rights of importers and ensures they can benefit from duty refunds where applicable. While the legislation does not explicitly outline penalties for non-compliance, any errors in the TCO process could be addressed through judicial review or other legal mechanisms.