EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516327
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 plastics repacking plant on 18 November 2005.
Instrument
TCO No 0516327 was made on 6 February 2006. It declares that the certain plastics repacking plant is a good 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. 0516327 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 Customs Act 1901 was enacted by the Parliament of Australia to provide for the regulation of customs and excise duties. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aims to provide tariff concessions to applicants for specific goods, thereby reducing the customs duty on those goods. Tariff Concession Instrument No. 0516327, made on 6 February 2006, addresses a particular application from Orica Australia Pty Ltd for a plastics repacking plant. The policy objective is to ensure that the CEO of Customs can effectively administer the TCO scheme by considering applications that meet the core criteria, as outlined in section 269C of the Act. The CEO must determine that no substitutable goods are produced in Australia before making a TCO. In this instance, no objections were received in response to the notice published in the Gazette, and the TCO was made effective from 18 November 2005, the date the application was lodged. The TCO provides a rate of duty of free on the specified goods, compared to the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0516327 under the Customs Act 1901 applies to the entity that applied for the concession, Orica Australia Pty Ltd, specifically in relation to a certain plastics repacking plant. The scope of this Act pertains to the reduction of customs duty on these goods as a result of the Tariff Concession Order (TCO) issued. The Act operates within the Commonwealth jurisdiction, and its application is governed by the provisions of the Customs Act 1901, particularly Part XVA, which outlines the scheme for making TCOs. The application of this Act is limited by the exclusions specified in section 269SJ of the Act, which lists the goods that cannot be subject to a TCO. The Act's application may be further defined or extended through subordinate instruments, although no such instruments are referenced here. The geographic reach of this Act is national, as it applies across Australia under the federal Customs Act 1901.
Key Provisions
The key operative sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods (s 269F). Section 269C outlines the core criteria that must be met for an application to be valid, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Section 269P(3) mandates that if the CEO is satisfied that an application meets these core criteria, a written order must be made (s 269P(3)). These sections collectively ensure that the process for applying for and granting TCOs is clear and transparent.
Under the Customs Act 1901, the CEO has specific obligations when processing a TCO application. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO (s 269SJ). If the application is valid, the CEO must then determine if it meets the core criteria specified in section 269C by verifying that no substitutable goods were produced in Australia (s 269C). If the CEO is satisfied that these criteria are met, they must make a written order specifying that the goods in question are subject to the TCO (s 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made, though no submissions were received in this case (s 269K(1)).
The Customs Act 1901 imposes penalties and consequences for non-compliance with the provisions related to TCOs. While the explanatory statement does not specify penalties for breaches directly related to TCOs, the Act generally outlines penalties for various customs-related offences, including fines and imprisonment. For instance, knowingly making a false statement or representation in a customs document can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (s 228A). It is important for parties involved in customs and TCOs to comply with all stipulated requirements to avoid such penalties.
The Tariff Concession Order No. 0516327, which was made on 6 February 2006, declares that a certain plastics repacking plant is subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a rate of duty reduced to free. The order came into effect on 18 November 2005, the date the application was lodged (s 269S(1)). This TCO ensures that the applicant, Orica Australia Pty Ltd, benefits from the reduced duty rate, while also providing potential benefits to importers who can apply for duty refunds for goods imported since the effective date (s 126(1)(r) of the Regulations). Importantly, the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities (s 269S(1)).