EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602219
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 bulk fertiliser and potting mix manufacturing plant on 13 January 2006.
Instrument
TCO No 0602219 was made on 24 March 2006. It declares that those certain bulk fertiliser and potting mix manufacturing plant and 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. 0602219 is taken to have come into force on 13 January 2006.
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. 0602219, enacted under the Customs Act 1901, was introduced to address the issue of applying for tariff concessions on specific goods, in this case certain bulk fertiliser and potting mix manufacturing plant. The instrument was created in response to an application from Orica Australia Pty Ltd, and was made on 24 March 2006, after the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia. This instrument provides a lower rate of customs duty for these goods, reducing the general rate of 5% to 0%. The CEO did not receive any submissions opposing the concession, and the instrument came into effect on 13 January 2006. The policy objective of this instrument is to provide tariff relief for specific goods that are not produced domestically, thereby promoting trade and benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the concession took effect.
Scope and Application
The Tariff Concession Instrument No. 0602219 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain bulk fertiliser and potting mix manufacturing plant, and is targeted at entities such as Orica Australia Pty Ltd that seek tariff concessions on imported goods. This instrument was made in response to an application submitted by Orica Australia Pty Ltd on 13 January 2006, and it aims to provide a lower rate of customs duty on these goods by declaring them to be subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. The instrument’s jurisdictional reach is governed by the Commonwealth of Australia, and it is effective as of the date the application was lodged. The application process requires the Chief Executive Officer of Customs to ensure that the goods in question do not have substitutable alternatives produced in Australia and meet other core criteria specified in the Act. There are no exclusions or exemptions mentioned in the explanatory statement for this specific instrument, and the geographic application is confined to Australia. Any further regulations or amendments to the application of this tariff concession would be managed through subordinate instruments as provided by the Customs Act 1901.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0602219, as outlined in the Explanatory Statement, revolve around section 269C (1) of the Customs Act 1901, which details the conditions under which a Tariff Concession Order (TCO) can be made. According to section 269C, a TCO application is deemed to meet the core criteria if, on the date of application, there were no substitutable goods produced in Australia in the ordinary course of business. Section 269P(3) further mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, they must issue a written TCO, specifying the lower rate of customs duty applicable to the goods in question. In this case, the TCO No. 0602219 was issued on 24 March 2006, reducing the duty on certain bulk fertiliser and potting mix manufacturing plant from the general rate of 5% to 0%.
The Act imposes certain obligations on both applicants and the CEO. For applicants, the obligation lies in ensuring their applications meet the core criteria stipulated under section 269C of the Act, which includes proving that no substitutable goods are produced in Australia. The CEO, on the other hand, is required to assess applications against these criteria and, if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit their views on whether the TCO should be made. In this instance, the CEO did not receive any submissions in response to the published notice.
The Customs Act 1901 includes provisions for offences, penalties, or civil/criminal consequences for breach, though these are not explicitly detailed in the Explanatory Statement for TCO No. 0602219. However, it is implicit that failure to comply with the conditions set forth by the Act or the TCO could result in legal consequences. The general penalties for breaches of the Customs Act can include fines and, in severe cases, imprisonment. For instance, under section 229 of the Act, a person who contravenes a provision of the Act may be liable to a penalty of up to 10,000 penalty units for individuals and up to 50,000 penalty units for bodies corporate, reflecting the severity with which the law treats non-compliance.