EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516034
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 ammonia manufacturing plant on 15 November 2005.
Instrument
TCO No 0516034 was made on 06 February 2006. It declares that those certain ammonia manufacturing 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 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. 0516034 is taken to have come into force on 15 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 Parliament of Australia, establishes a framework for the application of customs duties on imported goods. Part XVA of the Act introduces the scheme for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on specific goods under certain conditions. This legislative framework was introduced to address the need for targeted tariff reductions that can foster economic growth and competitiveness by making imported goods more affordable. The Tariff Concession Instrument No. 0516034, made under this Act on 6 February 2006, exemplifies the application of this scheme. In this instance, Orica Australia Pty Ltd successfully applied for a TCO for certain ammonia manufacturing plant, resulting in a reduction of the customs duty from 5% to free. This tariff concession is effective from the date the application was lodged, 15 November 2005, and does not disadvantage any person or impose new liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 0516034, made under the Customs Act 1901, pertains specifically to the application of tariff concessions on certain ammonia manufacturing plant. This instrument applies to Orica Australia Pty Ltd and to any entity importing the specified goods, ensuring they benefit from a reduced customs duty rate. The instrument's scope is defined by its application to goods not produced in Australia in the ordinary course of business, as per the criteria set out in the Customs Act. The instrument’s jurisdictional reach is national, given its foundation in Commonwealth legislation. While the Act does not explicitly exclude any categories of goods or entities from its purview, it inherently excludes goods specified in section 269SJ of the Customs Act, which cannot be subject to tariff concessions. Additionally, the Act allows for the application to be extended or restricted through subordinate instruments, though the specific details of such extensions or restrictions are not elaborated upon in the explanatory statement.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0516034 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C specifies the core criteria that an application must meet, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO must make a written order as a TCO (section 269P(3)).
The obligations and requirements imposed by this Act on parties or entities include the necessity for applicants to ensure their applications meet the core criteria set out in section 269C. This involves demonstrating that no substitutable goods were produced in Australia at the time of application. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO, as stipulated in section 269K(1). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on such persons in respect of actions taken before the TCO’s effective date.
Offences and penalties for breach of this Act are not explicitly detailed in the provided text, but it is clear that failure to comply with the requirements and obligations may result in legal consequences. For instance, if a TCO is made improperly without satisfying the core criteria, it could potentially be challenged or invalidated in court, leading to civil or administrative penalties. The maximum penalties for breaches would depend on the specific nature of the offence, as outlined in other relevant sections of the Customs Act 1901 and associated regulations. The Act's provisions ensure that any misconduct or non-compliance could result in significant legal ramifications for the involved parties.