EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516040
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 texture coating manufacturing plant on 16 November 2005.
Instrument
TCO No 0516040 was made on 13 February 2006. It declares that the certain texture coating manufacturing 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. 0516040 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. 0516040 was enacted in 2006 under the Customs Act 1901, addressing the need for a streamlined process to provide tariff concessions for specific goods. The Australian Parliament established this mechanism to allow the Chief Executive Officer of Customs to facilitate tariff reductions for imported goods, provided certain conditions are met. The primary policy objective of this legislation is to support Australian businesses by ensuring they have access to necessary imported goods at a reduced cost, thereby encouraging economic growth and competitiveness. Orica Australia Pty Ltd's application for tariff concessions on a texture coating manufacturing plant exemplifies the process, highlighting the importance of ensuring that no substitutable goods are produced domestically before approving such concessions. This legislative framework ensures that the application process is transparent and allows for public consultation, ultimately benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 0516040 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO), which in this case pertains to a certain texture coating manufacturing plant. This instrument is applicable to any entity that imports the specified goods into Australia. The Act allows for the reduction of customs duty on these goods to zero, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this legislation is confined to the Commonwealth of Australia, impacting customs duties as stipulated in the Customs Tariff Act 1995. The legislation explicitly excludes certain goods from being subject to a TCO, as outlined in section 269SJ of the Customs Act. The instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any individual or entity for actions taken before the TCO was registered. The commencement date of this Tariff Concession Instrument is 16 November 2005, which is the date on which the application was lodged, and it applies retroactively to that date.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0516040 under the Customs Act 1901 (section 269F) allow for the application by a person to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO (section 269C). Section 269P(3) stipulates that the TCO must specify the item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question, thereby granting a tariff concession.
The Act imposes specific obligations on the CEO, such as the requirement to publish a notice in the Gazette inviting submissions from any person who might oppose the making of the TCO (subsection 269K(1)). The CEO must also ensure that the TCO is issued only if no substitutable goods were produced in Australia in the ordinary course of business on the date of the application (section 269C). Furthermore, the Act mandates that a TCO must not disadvantage any person other than the Commonwealth or impose liabilities on such a person in respect of actions taken before the TCO was registered (subsection 269S(1)).
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Customs Act can lead to penalties under general provisions of the Act or related legislation. For example, knowingly making a false statement or providing false information in an application for a TCO could be considered a civil or criminal offence, potentially leading to fines or imprisonment. The exact penalties would depend on the nature and severity of the breach.