EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516043
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 hydroxide manufacturing plant on 16 November 2005.
Instrument
TCO No 0516043 was made on 06 February 2006. It declares that those certain sodium hydroxide 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. 0516043 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for administering customs and excise duties, including the process for granting tariff concession orders (TCOs) through which importers can benefit from reduced customs duties on certain goods. This legislation addresses the gap in ensuring that Australian businesses can access necessary imported goods at a lower cost, thereby promoting economic efficiency and competitiveness. The Tariff Concession Instrument No. 0516043 was introduced to facilitate this process by providing a lower rate of customs duty on specific goods, such as certain sodium hydroxide manufacturing plant, as long as no substitutable goods are produced in Australia. The primary policy objective of this instrument is to support industries by making imported goods more affordable, thus aiding economic growth and ensuring that Australian businesses can operate effectively.
Scope and Application
The Tariff Concession Instrument No. 0516043 under the Customs Act 1901 applies to goods specifically identified in the application made by Orica Australia Pty Ltd for sodium hydroxide manufacturing plant. The Act allows for a lower rate of customs duty on these goods if the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business. This particular instrument was made on 6 February 2006, declaring that certain sodium hydroxide manufacturing plant are subject to a free rate of duty instead of the general rate of 5%, in accordance with item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this concession is effective from 16 November 2005, the date on which the application was lodged. The instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its registration, and it does not affect the rights of any person other than the Commonwealth. Importers of these goods will benefit from the concession by being able to apply for a refund of duty on goods imported since the effective date.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0516043 pertain to the conditions under which Tariff Concession Orders (TCOs) may be issued, as outlined in Part XVA of the Customs Act 1901 (section 269C). Specifically, section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to certain goods. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring the goods subject to the TCO. This instrument declares that the sodium hydroxide manufacturing plant specified in the application is subject to a free rate of customs duty, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on both the CEO and applicants for a TCO. The CEO must assess the application to determine whether it meets the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia on the date the application was lodged, as defined by sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The applicant, in turn, must ensure that their application provides all necessary information and evidence to support their case for a TCO. Failure to meet these obligations could result in the application being rejected.
Section 269SJ of the Customs Act 1901 specifies certain goods that cannot be subject to a TCO, thereby limiting the scope of the concessions available. In the event that an applicant attempts to obtain a TCO for goods that fall under these exclusions, the CEO is obligated to reject the application. Additionally, section 269P(3) highlights that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no individual or entity is disadvantaged or imposed with liabilities due to the issuance of the TCO.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in civil or criminal penalties. While the specific penalties for breaches are not detailed in the explanatory statement, the Act generally provides for fines and imprisonment for non-compliance with customs regulations. The severity of these penalties can vary depending on the nature and extent of the breach. For instance, knowingly making a false statement in an application for a TCO could lead to significant penalties under the relevant sections of the Customs Act 1901. It is important for both applicants and the CEO to adhere strictly to the legislative requirements to avoid such consequences.