EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516038
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 Granulation Plant on 30 November 2005.
Instrument
TCO No 0516038 was made on 30 January 2006. It declares that the certain Granulation Plant is a good 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. 0516038 is taken to have come into force on 30 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 was enacted to provide for the regulation of customs and excise, including the imposition and collection of duties and taxes on imported goods. The Act was introduced to address the need for a structured and comprehensive framework governing the importation of goods into Australia, thereby ensuring revenue for the government and regulating the flow of goods across borders. The Tariff Concession Instrument No. 0516038 was developed under Part XVA of this Act to provide a mechanism by which the Chief Executive Officer of Customs can grant tariff concessions on certain goods. The policy objective, as stated in the explanatory statement, is to allow for lower rates of customs duty on specified goods, provided that no substitutable goods are produced in Australia, thereby promoting economic efficiency and supporting specific industries or sectors. This instrument was enacted by the Parliament of Australia and aims to facilitate trade by reducing the financial burden on businesses that rely on importing specific goods that cannot be produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0516038, which was enacted under Part XVA of the Customs Act 1901, applies to any person or entity seeking tariff concessions for specific goods in relation to customs duty. The scope of the Act encompasses individuals, companies, and other entities that import goods into Australia, aiming to provide relief from customs duties under certain conditions. The Act's geographic reach is national, as it pertains to goods imported across Australia and governed by the Commonwealth. The application process involves an individual or entity submitting an application to the Chief Executive Officer of Customs, who evaluates whether the goods in question meet the criteria for tariff concessions, specifically ensuring that no substitutable goods are produced in Australia. The instrument does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists items ineligible for tariff concessions. The application of this Act can be further defined or expanded through subordinate instruments, allowing for specific regulations or amendments as needed.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs). These orders provide a lower rate of customs duty on certain goods. Section 269F allows an individual to apply to the CEO for a TCO concerning goods. Provided the goods do not fall under the list specified in section 269SJ, which outlines goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. For an application to meet these criteria, it is essential that, on the date of application, no substitutable goods were being produced in Australia in the ordinary course of business. The meanings of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined in sections 269D, 269E, and 269F, respectively.
The obligations imposed by the Act on the CEO include the requirement to publish a notice in the Gazette once an application is accepted as valid. This notice must invite any person who believes the TCO should not be granted to submit their reasons to the CEO, as stipulated in section 269K(1). In the case of Orica Australia Pty Ltd’s application for a TCO on a Granulation Plant, which was accepted on 30 November 2005 and declared effective on the same date, no submissions opposing the TCO were received. The TCO, No. 0516038, made on 30 January 2006, declares that the Granulation Plant is subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, instead of the general rate of 5%.
Failure to comply with the provisions of the Customs Act 1901 or the regulations might result in civil or criminal consequences. However, the explanatory statement does not specify particular offences, penalties, or maximum penalties for breaches. It is generally understood that breaches of customs regulations can lead to fines, imprisonment, or both, depending on the severity and nature of the offence. Additionally, the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, and it does not impose any liabilities on individuals for actions taken before the TCO's effective date. Importers, however, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.