EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516372
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 emulsions manufacturing plant on 18 November 2005.
Instrument
TCO No 0516372 was made on 13 February 2006. It declares that the certain emulsions manufacturing 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. 0516372 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. 0516372 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions for specific goods that are not produced domestically in Australia. This legislation allows for the application of lower rates of customs duty to certain goods that meet specified criteria, ensuring that Australian consumers and businesses can access goods more affordably while also supporting the domestic production of substitutable goods. The instrument was introduced by the Chief Executive Officer of Customs, following an application by Orica Australia Pty Ltd for a tariff concession on a certain emulsions manufacturing plant. The instrument aims to facilitate trade by providing a streamlined process for tariff reductions, thereby promoting economic efficiency and competitive pricing in the market. The policy objective is to provide relief to Australian businesses and consumers by reducing the cost of importing certain goods that are not domestically produced, thereby enhancing the overall economic welfare.
Scope and Application
The Tariff Concession Instrument No. 0516372 under the Customs Act 1901 applies specifically to goods identified in the application for a Tariff Concession Order (TCO) made by Orica Australia Pty Ltd concerning a certain emulsions manufacturing plant. This Act enables the Chief Executive Officer of Customs to grant tariff concessions on goods that meet specific criteria, such as not having substitutable goods produced in Australia. The instrument pertains to the geographic and jurisdictional reach of the Commonwealth of Australia, impacting the customs duty applicable to the specified goods. The exclusions under this Act are limited to goods explicitly stated in section 269SJ of the Act, which are ineligible for TCOs. The application of this Act may be further extended or restricted through subordinate instruments, which may provide additional definitions or criteria for determining eligibility for tariff concessions. Importantly, the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0516372 pertains to the Customs Act 1901, specifically under Part XVA which governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). According to section 269F, a person can apply to the CEO for a TCO for certain goods, provided they do not fall under the restricted categories specified in section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C, meaning no substitutable goods were produced in Australia at the time the application was lodged, the CEO is required to issue a written order, i.e., a TCO (section 269P(3)). This particular TCO No. 0516372 applies to a specific emulsions manufacturing plant and was issued on 13 February 2006, declaring it subject to item 50 of Schedule 4 of the Customs Tariff Act 1995 with a duty rate of free, as opposed to the general rate of 5%.
The obligations under the Act for parties and entities involve ensuring compliance with the core criteria specified in section 269C, particularly the absence of substitutable goods produced in Australia at the time of the application. The CEO has the responsibility to assess these criteria and to publish a notice in the Gazette (section 269K(1)) inviting submissions from any interested parties who might have reasons for opposing the TCO. In this case, no submissions were received, leading to the issuance of the TCO. Additionally, the TCO must be issued on the same day the application is lodged, as per section 269S(1), meaning TCO No. 0516372 is considered effective from 18 November 2005.
In terms of legal consequences, the Act does not disadvantage any person (other than the Commonwealth) by affecting their rights as at the date of the TCO registration or imposing liabilities for actions taken before the registration date. Instead, the TCO benefits importers by allowing them to apply for a refund of duties on goods imported since the effective date of the TCO, under paragraph 126(1)(r) of the Regulations. There are no penalties or criminal consequences specified for breaches of the TCO itself; however, any general breaches of the Customs Act 1901 may incur penalties as per other sections of the Act.