EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516041
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 superphosphate manufacturing plant on 16 November 2005.
Instrument
TCO No 0516041 was made on 3 April 2006. It declares that those certain superphosphate 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 0%.
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. One submission objecting to the TCO application was received from Abon Engineering Pty Ltd.
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. 0516041 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. 0516041, enacted under the Customs Act 1901, was introduced to provide a lower rate of customs duty on certain superphosphate manufacturing plant imported by Orica Australia Pty Ltd. This instrument aims to address the problem of high customs duties on specific industrial equipment that has no substitutable goods produced domestically, thereby ensuring the competitiveness of Australian industries in the global market. The instrument was created by the Chief Executive Officer of Customs in accordance with section 269F of the Act and is designed to comply with the core criteria outlined in sections 269C, 269D, 269E, and 269P of the Act. The policy objective is to reduce the duty on these goods from the general rate of 5% to 0%, thereby encouraging importation and supporting industrial efficiency and cost-effectiveness.
Scope and Application
The Tariff Concession Instrument No. 0516041 under the Customs Act 1901 applies to specific goods that are the subject of an application for a Tariff Concession Order (TCO), with Orica Australia Pty Ltd being the applicant in this case for certain superphosphate manufacturing plant. This instrument is applicable to the applicant and any other entities involved in the importation or production of these goods in Australia. The scope of the Act extends to the entire Commonwealth of Australia, ensuring that the concession applies uniformly across all states and territories. The legislation specifically excludes goods outlined in section 269SJ of the Act, which cannot be subject to a TCO. The process involves an application by a person to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, such as the absence of substitutable goods produced in Australia. If the criteria are met, the CEO issues a written order that specifies the goods and the reduced duty rate, as demonstrated in this instance where the duty on the superphosphate manufacturing plant was reduced to 0%. The TCO came into force on the date the application was lodged, and it does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0516041, under the Customs Act 1901, establish the framework for the issuance of Tariff Concession Orders (TCOs). According to section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding certain goods. Section 269C outlines the core criteria that must be met for the CEO to consider the application. Specifically, it requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If these criteria are met, the CEO must make a written order, or TCO, which declares that the goods in question are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). In this case, the TCO applies to certain superphosphate manufacturing plant, reducing the duty rate from the general 5% to 0% (section 50 of Schedule 4).
The Act imposes several obligations on the parties involved. For applicants like Orica Australia Pty Ltd, the obligation is to submit a valid application for a TCO, ensuring that the goods in question meet the core criteria outlined in section 269C. The CEO, on the other hand, has the obligation to review the application, assess whether the core criteria are met, and if so, issue a TCO. Furthermore, the CEO must publish a notice in the Gazette, inviting submissions from interested parties who may object to the TCO (subsection 269K(1)). This ensures transparency and provides an opportunity for stakeholders to voice their concerns.
Non-compliance with the provisions of the Customs Act 1901 and the resulting TCO could lead to legal consequences. While the explanatory statement does not explicitly detail offences, penalties, or specific civil or criminal consequences for breaches, it is understood that the Act provides for enforcement measures. Generally, under the Customs Act, breaches may result in fines, imprisonment, or other penalties as prescribed by law. For instance, providing false information in an application or acting contrary to the terms of a TCO could lead to serious repercussions. The exact penalties would depend on the nature and severity of the breach, but they could include significant fines or imprisonment terms as determined by the relevant courts.