EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515680
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 sodium lauryl sulfate on 08 November 2005.
Instrument
TCO No 0515680 was made on 23 January 2006. It declares that sodium lauryl sulfate is a product 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.0515680 is taken to have come into force on 08 November 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, provides a framework for the regulation of customs and excise in Australia, including the imposition of duties on imported goods. To address specific economic or developmental needs, the Act allows for the creation of Tariff Concession Orders (TCOs) which can reduce or eliminate customs duties on certain goods. The explanatory statement for Tariff Concession Instrument No. 0515680, issued under the Customs Act 1901, pertains to a concession granted to Orica Australia Pty Ltd for sodium lauryl sulfate, reducing its duty from 5% to free. This concession was granted after it was determined that no substitutable goods were produced in Australia, meeting the core criteria as outlined in section 269C of the Act. The policy objective behind such concessions is to support Australian industries by ensuring they can compete fairly against imported goods, while also potentially reducing costs for businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek to import goods that may benefit from reduced customs duties under a TCO. The scope of the Act extends to any goods that are not specified as ineligible in section 269SJ of the Customs Act, and it operates nationally within the Commonwealth of Australia. A TCO can be applied for under section 269F if the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E and 269F of the Act. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect their rights as of the date of registration of a TCO. The application process for a TCO includes an opportunity for public comment as per subsection 269K(1) of the Act. The commencement of a TCO, such as TCO No. 0515680 for sodium lauryl sulfate, is effective from the date the application is lodged, without retroactive effect on pre-existing rights or liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0515680, under the Customs Act 1901, pertain to the process of applying for and granting a Tariff Concession Order (TCO) (sections 269C, 269F, 269P(3), and 269SJ). Section 269F allows an individual to apply for a TCO in respect of goods, while section 269C outlines the core criteria that must be met for the application to be successful, namely that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must then make a written TCO (section 269P(3)). Section 269SJ specifies the goods that cannot be subject to a TCO, providing a clear framework within which applications are assessed.
The obligations imposed by the Act on the parties involved are primarily directed towards the CEO and the applicant. The CEO is obligated to assess the application against the criteria outlined in section 269C and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). Once the application is accepted as valid, the CEO must decide whether to grant the TCO. The applicant, on the other hand, must ensure that their application complies with the statutory requirements, including demonstrating that no substitutable goods are produced in Australia as per section 269D. Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on such persons (subsection 269S(1)).
The Act does not explicitly detail offences or penalties for breach within the scope of TCOs. However, the broader Customs Act 1901 does include provisions for offences and penalties related to customs duties and other customs-related activities. For instance, section 222A of the Customs Act 1901 provides for criminal penalties, including fines and imprisonment, for breaches of customs laws. In the context of TCOs, non-compliance with the conditions set forth by the CEO or providing false information in the application could potentially lead to legal consequences under these broader provisions. The specifics of penalties would be determined by the courts in the context of the broader Customs Act and related legislation.