EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516049
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 urea manufacturing plant on 15 November 2005.
Instrument
TCO No 0516049 was made on 06 February 2006. It declares that those certain urea 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. 0516049 is taken to have come into force on 15 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. 0516049, enacted in 2006, amends the Customs Act 1901 by granting tariff concessions for specific urea manufacturing plant imported by Orica Australia Pty Ltd. This legislative instrument addresses the need for tariff reductions on goods that are not produced in Australia and for which no suitable Australian-made substitutes exist. The instrument was developed by the Chief Executive Officer of Customs under the authority vested in the Customs Act, with the policy objective of facilitating the import of goods essential for industrial purposes without imposing undue financial burdens on businesses. The tariff concessions provided under this instrument effectively reduce the duty on the specified goods from the general rate of 5% to free, thereby encouraging the import of necessary industrial equipment while ensuring that no existing rights or liabilities of non-Commonwealth entities are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0516049 under the Customs Act 1901 applies specifically to goods for which Orica Australia Pty Ltd applied for a Tariff Concession Order (TCO). This Act allows for the reduction or elimination of customs duty on certain goods if specific criteria are met, thereby facilitating trade by making such goods more affordable. The TCO in question pertains to certain urea manufacturing plant and reduces the customs duty from the general rate of 5% to free, provided that no substitutable goods were produced in Australia on the date the application was lodged. The scope of this legislation is limited to goods that meet the criteria specified in the Customs Act and excludes those goods listed in section 269SJ, which cannot be subject to a TCO. The Act's jurisdiction is federal, impacting trade across Australia in accordance with the Commonwealth's legislative power. The TCO does not retroactively affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Order (TCO) No. 0516049 under the Customs Act 1901 (section 269F) allows for a concession on customs duty for certain urea manufacturing plant, following an application by Orica Australia Pty Ltd on 15 November 2005. This order, made on 6 February 2006, specifies that the urea manufacturing plant in question are subject to a lower tariff rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty from a general rate of 5% to free. The application was successful as the Chief Executive Officer (CEO) of Customs determined that no substitutable goods were produced in Australia at the time of the application (section 269C).
The Customs Act 1901 imposes certain obligations on parties applying for TCOs. Firstly, applicants must ensure that the goods they seek to have tariff concessions for are not listed in section 269SJ, which details goods that are ineligible for such concessions. Secondly, the applicant must substantiate that no substitutable goods were produced in Australia at the time of the application (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application, although in this case, no submissions were received (subsection 269K(1)). The TCO is considered to have come into effect on the date the application was lodged, which in this instance, was 15 November 2005 (subsection 269S(1)).
The Customs Act 1901 also outlines potential penalties for breaches related to TCO applications. While specific penalties are not detailed within the explanatory statement, it is implied that failure to comply with the requirements for TCO applications could result in legal consequences. Typically, breaches of provisions under the Customs Act 1901 may lead to criminal charges, which could include fines and imprisonment, or civil penalties, which might involve financial penalties. The exact nature and extent of these penalties would depend on the specifics of the breach and the relevant sections of the Act.