EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516042
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 sodium hypochlorite manufacturing plant on 16 November 2005.
Instrument
TCO No 0516042 was made on 06 February 2006. It declares that those certain sodium hypochlorite 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. 0516042 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. 0516042 was enacted in 2006 under the Customs Act 1901, aiming to provide tariff concessions on certain goods, specifically sodium hypochlorite manufacturing plant in this instance. This instrument was introduced to address the need for reducing customs duty on goods that are not produced in Australia and have no substitutable goods available domestically, thereby encouraging importation and potentially lowering costs for businesses importing these specific goods. The enacting body was the Chief Executive Officer of Customs, who assessed the application from Orica Australia Pty Ltd and determined that the application met the core criteria, as no substitutable goods were produced in Australia at the time of the application. The policy objective is to provide a lower rate of customs duty on specified goods, enhancing competitiveness and accessibility for businesses reliant on these imports.
The instrument was made effective from the date the application was lodged, 16 November 2005, and was published in the Gazette with an invitation for public submissions, none of which were received. This process ensures transparency and allows stakeholders to voice any concerns regarding the tariff concession. Importantly, the instrument does not retroactively affect the rights of any person, except to provide potential benefits to importers who may apply for a refund of duties paid on imports since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0516042 under the Customs Act 1901 applies to specific goods, in this instance certain sodium hypochlorite manufacturing plant, where an application for tariff concession has been made and approved by the Chief Executive Officer of Customs. The application process is available to any person seeking to import such goods, provided they meet the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The instrument grants tariff concessions to these goods, effectively reducing the duty rate from the general 5% to free, thereby benefiting importers by potentially allowing them to claim a refund for duties paid on imports since the effective date of the concession. This Act operates within the Commonwealth jurisdiction, extending its application across Australia. Notably, the TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on such persons in respect of actions taken prior to the date of registration. The scope of the Act can be further extended or defined through subordinate instruments, although no such extensions or restrictions are noted in this particular instance.
Key Provisions
The Tariff Concession Order (TCO) No. 0516042, pursuant to the Customs Act 1901 (the Act), designates specific sodium hypochlorite manufacturing plant as goods eligible for a tariff concession, with a duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The primary requirement under this TCO is that the CEO of Customs must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, in accordance with sections 269C and 269P of the Act. To meet the core criteria, it must be evident that the goods in question are not replaceable by Australian-made alternatives that serve the same purpose or design use (section 269B and 269D).
The Act imposes several obligations on the parties involved. For example, applicants for a TCO must ensure that their application complies with the statutory requirements, including providing sufficient evidence that substitutable goods are not produced in Australia (section 269SJ). The CEO, upon receiving an application, is mandated to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the concession (subsection 269K(1)). Additionally, the CEO must consider any submissions received and make a decision on the application within the stipulated timeframe.
Failure to comply with the requirements set out in the Act and the TCO can lead to various consequences. The Act does not explicitly outline specific offences or penalties for breaches of the TCO itself, but breaches of the Customs Act generally can result in significant civil and criminal penalties. For instance, knowingly making a false statement in an application or declaration can lead to fines of up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment. Furthermore, the Act includes provisions for the recovery of unpaid duties and interest, as well as the imposition of additional penalties for persistent or egregious breaches.