EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512086
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.
Australian Renewable Fuels Pty Ltd applied for a TCO in respect of certain Biodiesel Plant on 9 September 2005.
Instrument
TCO No 0512086 was made on 5 December 2005. It declares that those certain Biodiesel Plant 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. 0512086 is taken to have come into force on 9 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 was enacted to provide a comprehensive framework for the regulation of imports and exports within Australia. The Act establishes mechanisms through which the Chief Executive Officer of Customs can grant tariff concessions on certain goods, reducing the customs duty applied to those goods under specific conditions. The 2005 instrument, Tariff Concession Instrument No. 0512086, was introduced to address a specific gap in the Customs Act by providing a pathway for the CEO to grant tariff concessions to Australian Renewable Fuels Pty Ltd for certain Biodiesel Plant. This instrument ensures that these goods benefit from a zero percent duty rate, provided no substitutable goods are produced in Australia, thereby fostering the local production and use of renewable fuels in line with broader policy objectives of encouraging sustainable practices. The instrument was developed following a formal application process, which included a public consultation period, and it came into effect on the date the application was lodged, ensuring that it does not retroactively disadvantage any parties.
Scope and Application
The Tariff Concession Instrument No. 0512086 applies to the Biodiesel Plant goods specified in the instrument, and it is under the Customs Act 1901, which governs the administration of customs and excise duties in Australia. This legislation applies to the Chief Executive Officer of Customs, who is responsible for making Tariff Concession Orders (TCOs) in accordance with the provisions outlined in the Act. The instrument extends its reach across the Commonwealth of Australia, affecting any entity or individual involved in the importation or production of the specified biodiesel plant goods. The instrument specifies exclusions as outlined in section 269SJ of the Act, which details goods that cannot be subject to a TCO. Additionally, the application of this TCO is subject to the conditions set forth in the Customs Tariff Act 1995. The instrument itself does not detail subordinate instruments that might extend or restrict its application, but it operates within the broader framework provided by the Customs Act 1901 and related regulations.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) as stated in Part XVA. A TCO can lower the rate of customs duty on specific goods, as outlined in section 269F. When an application for a TCO is made, the Chief Executive Officer of Customs (CEO) must determine if it meets the core criteria, which are defined in sections 269C, 269B, 269D, 269E, and 269P(3). For instance, section 269C stipulates that the application will meet the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written TCO order is issued, specifying the goods and the prescribed item from Schedule 4 of the Customs Tariff Act 1995 that applies to them, as per section 269P(3).
The obligations under the Act for the CEO include ensuring that a TCO application meets the core criteria and that the application process is transparent and open to public consultation. This involves publishing a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed, as per subsection 269K(1). In the case of TCO No. 0512086, the CEO did not receive any submissions, indicating no objections to the concession. The CEO is also responsible for ensuring that the TCO does not adversely affect any person's rights or impose new liabilities on them, as per section 269S(1).
Failing to adhere to the requirements of the Act or the TCO may result in civil or criminal consequences. For instance, if a person knowingly makes a false or misleading statement in an application for a TCO, they could be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 275 of the Act. Additionally, the Act includes provisions for the refund of duty to importers of the specified goods from the date the TCO is taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations. This ensures that the rights of importers are protected and any duties paid prior to the TCO coming into effect are reimbursed.