EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516037
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 a certain cyanide manufacturing plant on 16 November 2005.
Instrument
TCO No 0516037 was made on 13 February 2006. It declares that the certain cyanide manufacturing plant is a 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. 0516037 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0516037 was enacted in 2006 under the Customs Act 1901, establishing a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. This instrument was introduced to address the need for streamlined customs duty processes for specific goods, particularly those not produced domestically. The objective of this legislation is to facilitate trade by providing duty concessions on imported goods that do not have local substitutes, thereby encouraging the import of these goods and potentially benefiting importers by allowing them to claim refunds for duties paid prior to the TCO’s effective date. The instrument was developed following an application by Orica Australia Pty Ltd for a TCO concerning a cyanide manufacturing plant, reflecting the process set out in the Act for such applications and the subsequent decision-making process by the CEO.
Scope and Application
The Tariff Concession Instrument No. 0516037, issued under the Customs Act 1901, applies to the importation of a certain cyanide manufacturing plant, facilitating a reduction in the customs duty rate from 5% to free of charge. This concession is applicable to Orica Australia Pty Ltd, and the instrument is effective from the date the application was lodged, 16 November 2005. The instrument operates within the framework of the Customs Act and is further governed by the Customs Tariff Act 1995. Any person or entity importing goods that meet the criteria outlined in the Instrument may benefit from the reduced customs duty rate. The instrument is subject to certain exclusions and criteria, particularly regarding the non-existence of substitutable goods produced in Australia. The CEO of Customs is responsible for making the Tariff Concession Order, and the decision-making process includes an opportunity for public consultation, although no submissions were received for this particular Instrument.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0516037 under the Customs Act 1901 involve the application and approval process for a Tariff Concession Order (TCO). According to section 269F, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ, which lists goods ineligible for TCOs, they must assess whether the application meets the core criteria outlined in section 269C. This section stipulates that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a prescribed tariff item, as per subsection 269P(3).
The obligations imposed by the Act on parties include the duty of the CEO to evaluate the TCO application against the criteria outlined in sections 269C, 269B, and 269D. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO’s effective date, as per the Act’s provisions.
The Act does not explicitly outline specific offences or penalties for breach of the TCO provisions. However, any actions taken in violation of the terms of the TCO or the Customs Act 1901 may lead to broader legal consequences under Australian law. These could include administrative penalties, legal actions for breach of contract, or other civil or criminal consequences depending on the nature and extent of the breach. The precise penalties would be determined in the context of any subsequent legal proceedings.
In summary, Tariff Concession Instrument No. 0516037 under the Customs Act 1901 facilitates the application and approval process for TCOs, ensuring that eligible goods receive tariff concessions. The CEO's role is to assess applications against specific criteria, publish notices for public submissions, and ensure that the TCO does not adversely affect existing rights or impose new liabilities. While the Act does not detail specific penalties for breaches, any violations could result in broader legal consequences under Australian law.