EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602221
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 growing media production line on 11 January 2006.
Instrument
TCO No 0602221 was made on 24 March 2006. It declares that those certain growing media production line 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. 0602221 is taken to have come into force on 11 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the administration of customs and excise duties. The Act was introduced to address the need for a structured system to regulate the import and export of goods, ensuring compliance and facilitating trade. Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to reduce customs duty rates on specific goods. The policy objective is to support Australian industries by lowering the cost of imported goods that are not produced domestically, thereby encouraging competition and economic growth.
The Tariff Concession Instrument No. 0602221 was created under this framework, addressing a specific application by Orica Australia Pty Ltd for a TCO concerning certain growing media production lines. This instrument was issued on 24 March 2006, following a determination by the CEO that no substitutable goods were produced in Australia, meeting the core criteria under section 269C. As a result, the general duty rate of 5% was reduced to 0% for these goods, effective from the date the application was lodged, 11 January 2006. The instrument ensures that no rights or liabilities are adversely affected for persons other than the Commonwealth, while providing potential benefits to importers in the form of duty refunds.
Scope and Application
The Tariff Concession Instrument No. 0602221 under the Customs Act 1901 applies to the specific case of certain growing media production line goods, which are eligible for tariff concessions as per the instrument. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. This particular TCO was applied for by Orica Australia Pty Ltd and was approved by the CEO on 24 March 2006, following the determination that no substitutable goods were being produced in Australia at the time of the application. The application of the TCO, which lowers the duty from the general rate of 5% to 0%, is effective from 11 January 2006, the date the application was lodged. The TCO does not affect any existing rights or liabilities of parties other than the Commonwealth and does not impose any new liabilities on individuals or entities. Importers, however, stand to benefit from the TCO by potentially applying for refunds of duty paid on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation (F2006L00998) detail the procedure and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). Specifically, section 269C sets out the core criteria that must be satisfied for a TCO application to be approved, which includes ensuring that no substitutable goods are being produced in Australia (section 269D). If these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a TCO (section 269P(3)). This particular TCO No 0602221, declared on 24 March 2006, pertains to certain growing media production lines and aligns these goods with item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a 0% duty rate instead of the general 5% rate.
The obligations and requirements imposed by this Act on the parties it governs include the duty of the CEO to assess TCO applications against the core criteria outlined in section 269C. The CEO must also ensure that any substitutable goods are not being produced in Australia as of the date the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must consider these submissions before deciding whether to proceed with the TCO. In this case, no submissions were received, facilitating the approval of TCO No 0602221.
Regarding potential offences, penalties, or consequences for breach, the Act does not explicitly detail specific sanctions for non-compliance with TCO requirements. However, general provisions under the Customs Act 1901 may apply, including potential fines and imprisonment for serious breaches. The specific penalties would depend on the nature and severity of the breach, but they could include substantial fines and imprisonment terms as stipulated by relevant sections of the Customs Act. The TCO itself does not impose liabilities on any person and protects the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.