EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601578
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 calcium stearate on 29 December 2005.
Instrument
TCO No 0601578 was made on 24 March 2006. It declares that those certain calcium stearate 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 0%.
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. 0601578 is taken to have come into force on 29 December 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. 0601578 was enacted in 2006 to address the need for tariff concessions under the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The instrument was enacted to provide relief to businesses importing particular goods by ensuring they do not face prohibitive customs duties, thereby supporting the competitiveness of Australian businesses in the global market. The instrument was made in response to an application by Orica Australia Pty Ltd for tariff concessions on certain calcium stearate, which was approved as no substitutable goods were produced in Australia. This initiative aligns with the policy objective of facilitating smoother trade operations and promoting economic efficiency within the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0601578 under the Customs Act 1901 applies to specific goods, in this case certain calcium stearate, that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). The application of this instrument is confined to the reduction or elimination of customs duty on these particular goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The instrument operates within the Commonwealth jurisdiction, extending its application to all entities involved in the importation of these goods. However, it excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO is mandated to consult with stakeholders by publishing notices in the Gazette, inviting submissions from any interested parties; in this instance, no submissions were received. The TCO came into force on 29 December 2005, the date the application was lodged, and it benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation pertain to the application and creation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, while section 269C stipulates that such an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269D defines ‘goods produced in Australia’, and section 269E defines ‘ordinary course of business’). If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order (section 269P(3)). In this case, Tariff Concession Order No. 0601578 was made on 24 March 2006, declaring that certain calcium stearate is subject to item 50 of Schedule 4 to the Tariff, with a reduced duty rate from 5% to 0%.
The Act imposes certain obligations and requirements on the parties involved. The CEO must, upon receiving a valid TCO application, determine whether it meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). This ensures that all interested parties have an opportunity to voice their concerns. In the case of TCO No. 0601578, the CEO did not receive any submissions in response to this invitation.
Any breach of the provisions of the Customs Act 1901 can result in civil or criminal consequences. The Act does not specify the exact offences, penalties, or consequences for breach in this context, but it is known that non-compliance with customs regulations can lead to significant penalties, including fines and imprisonment. The maximum penalties for customs offences can vary depending on the severity of the breach and are determined by the courts. For instance, offences involving fraudulent or deliberate misrepresentation can attract substantial fines and lengthy imprisonment terms. Importers and exporters must ensure they comply with the Act to avoid these potential consequences.