EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516035
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 chlorinated paraffin oil manufacturing plant on 15 November 2005.
Instrument
TCO No 0516035 was made on 06 February 2006. It declares that those certain chlorinated paraffin oil 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. 0516035 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, as amended, provides a framework for the imposition of customs duties on goods imported into Australia. It allows for the granting of tariff concession orders (TCOs) by the Chief Executive Officer of Customs to provide reduced customs duty rates on specific goods under certain conditions. This legislation was enacted to address the need for flexibility in tariff application to support economic activities and trade. The Parliament of Australia established this scheme to ensure that tariff concessions are granted judiciously, balancing the need to support Australian industries with the broader objectives of the Customs Act. The policy objective of this act is to facilitate the import of goods that are not locally produced, thereby encouraging economic activity and trade while also ensuring that the concessions do not unduly disadvantage other stakeholders.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling a reduced rate of customs duty for specified goods. This legislative framework applies to any person or entity seeking to import goods eligible for tariff concessions, provided that the goods do not fall within the restricted categories outlined in section 269SJ. A TCO can be applied for if, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. Once the CEO is satisfied that the application meets these core criteria, a TCO is issued, declaring that the specified goods are subject to a prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995. The application and subsequent order process ensures that the rights of existing importers are protected, with no retroactive disadvantages or liabilities imposed by the TCO.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0516035, under section 269C of the Customs Act 1901, require that a Tariff Concession Order (TCO) be made if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This condition ensures that the concession is only granted if there is no domestic production of similar goods. If the CEO is satisfied with the application, they are obligated to make a written order that specifies the concession (section 269P(3)).
The obligations imposed by the Act on the parties involved are clear and specific. The CEO must, upon receiving a valid TCO application, ensure that there are no substitutable goods being produced domestically and then proceed to make a written TCO if the criteria are met (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, which may have expedited the process.
Failure to comply with the requirements set out in the Act could result in legal consequences. Although the explanatory statement does not explicitly detail the penalties for non-compliance, breaches of the Customs Act 1901 can generally lead to criminal charges under sections 257 and 258, which encompass offences such as smuggling and other fraudulent activities. Penalties can include fines and imprisonment, depending on the severity of the offence. Furthermore, civil penalties may also apply for incorrect declarations or other administrative breaches, as outlined in the Customs Act and its subsidiary legislation.