EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516326
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 repacking plant on 18 November 2005.
Instrument
TCO No 0516326 was made on 6 February 2006. It declares that the certain repacking 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. 0516326 is taken to have come into force on 18 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. 0516326, enacted in 2006 under the Customs Act 1901, addresses the need to provide tariff concessions on certain goods that are not produced domestically, thus encouraging the importation of these goods and potentially benefiting importers by lowering their duty obligations. The instrument was introduced to facilitate the application process for tariff concessions by specifying that the application meets the core criteria if no substitutable goods are produced in Australia. The Customs Act 1901, enacted by the Commonwealth Parliament, outlines the legislative framework within which these tariff concessions operate. The policy objective is to support industries that rely on imported goods by reducing customs duties, thereby making imported goods more competitively priced and accessible within the Australian market.
The Instrument was issued by the Chief Executive Officer of Customs, following an application by Orica Australia Pty Ltd for a tariff concession on a specific repacking plant. The decision to grant the concession was based on the CEO's determination that no substitutable goods were produced in Australia. The instrument specifies that the general rate of duty on the plant is 5%, but under the tariff concession, the duty is set at free. The instrument came into effect on the date the application was lodged, 18 November 2005, and it ensures that no rights of persons other than the Commonwealth are adversely affected. Importers of the specified goods can apply for a refund of duty paid since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0516326 pertains to the Customs Act 1901, specifically addressing the application of Tariff Concession Orders (TCOs) to particular goods. This legislative instrument applies to the Chief Executive Officer of Customs (CEO), who is responsible for assessing and approving applications for TCOs in accordance with the criteria outlined in the Act. The scope of this legislation extends to any entity or individual who wishes to apply for a TCO for goods that meet the specified conditions. The primary purpose is to facilitate the importation of goods by reducing or eliminating customs duty for certain items, provided that these goods are not substitutable by products manufactured within Australia. The geographic reach of this Act is national, as it operates under the authority of the Commonwealth of Australia. The legislation explicitly excludes certain goods from eligibility for a TCO, as stipulated in section 269SJ of the Act. The application of this Act may be extended or restricted through subordinate instruments, which allows for further refinement and specificity in the implementation of tariff concessions.
Key Provisions
Section 269C (3) of the Customs Act 1901 provides that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that if an applicant, such as Orica Australia Pty Ltd, can demonstrate that there are no goods produced domestically that could serve as a substitute for the goods in question, a TCO can be granted. The Act also stipulates that a TCO can be applied for under section 269F, and it sets out specific circumstances where a TCO cannot be granted, as detailed in section 269SJ. If the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they are required under section 269P(3) to make a written order 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 applies.
The obligations imposed by the Customs Act 1901 on the parties governed by it include the requirement for the CEO to assess TCO applications against the core criteria set out in section 269C. If an application is deemed valid, the CEO must make a written TCO, as mandated by section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes that the TCO should not be made, as per subsection 269K(1). The TCO will then come into force on the date the application was lodged, as indicated by subsection 269S(1). For example, TCO No. 0516326, which applies to a certain repacking plant, was taken to have come into force on 18 November 2005, the date of the application.
Any breach of the provisions set out in the Customs Act 1901 can lead to both civil and criminal consequences. While the Act does not specify detailed penalties, breaches of associated regulations or failure to comply with the terms of a TCO could lead to fines, imprisonment, or other sanctions as prescribed in the relevant legislation. For instance, under the Customs Act, non-compliance with TCOs or other provisions could result in penalties that include fines up to a certain amount or imprisonment for a specific period, depending on the severity and intent of the breach. The specific penalties would be outlined in the associated regulations or other applicable laws.