EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602222
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 injection moulding production plant on 11 January 2006.
Instrument
TCO No 0602222 was made on 24 March 2006. It declares that those certain injection moulding production 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. 0602222 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 Tariff Concession Instrument No. 0602222, enacted under the Customs Act 1901, addresses the need for a streamlined process to provide tariff concessions on specific goods, thereby facilitating trade and reducing the financial burden on businesses. This instrument was introduced to address the gap in the customs duty application process for goods that are not produced domestically and do not have substitutable alternatives. The Tariff Concession Order (TCO) allows for a lower rate of customs duty on such goods, as determined by the Chief Executive Officer of Customs (CEO) upon application. The objective is to ensure that the application of tariff concessions aligns with the overarching goals of the Customs Act, including supporting economic efficiency and fairness in trade practices.
The Tariff Concession Instrument No. 0602222, issued on 24 March 2006, specifically applies to certain injection moulding production plant, reducing their duty from 5% to 0% as no substitutable goods were produced in Australia. The instrument was made following a valid application by Orica Australia Pty Ltd, and it came into force on 11 January 2006. Importantly, this order does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, while allowing for potential duty refunds for importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 0602222, made under the Customs Act 1901, applies to specific injection moulding production plant goods for which Orica Australia Pty Ltd applied and received approval on 11 January 2006. This instrument, effective from the date of application, aims to reduce the customs duty rate from the general 5% to 0% for these particular goods, provided that no substitutable goods are produced in Australia. The scope of the Act is limited to the goods specified in the application, ensuring that the concession does not apply to other goods or industries unless similarly applied for and approved. The geographical reach of this legislation is national, as it pertains to customs duties across Australia. The Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. Any further application or extension of the Act’s provisions may be governed by subordinate instruments, although no such extensions or restrictions are noted in this specific instance.
Key Provisions
The Tariff Concession Instrument No. 0602222 under the Customs Act 1901 allows for a lower rate of customs duty on certain goods specified in the Instrument. Specifically, section 269F of the Act enables a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application meets the core criteria as stipulated in section 269C, the CEO must make a written order declaring that the specified goods are subject to a prescribed tariff item in Schedule 4 to the Customs Tariff Act 1995. In this case, Instrument TCO No. 0602222, made on 24 March 2006, applies to certain injection moulding production plant, with the rate of duty reduced from 5% to 0%.
The Act imposes certain obligations on the CEO and applicants under section 269K. The CEO must publish a notice in the Gazette inviting submissions from any interested parties if a TCO application is accepted as valid. Additionally, section 269P(3) mandates that a TCO must be made if the CEO is satisfied that the application meets the core criteria, which includes the absence of substitutable goods produced in Australia on the date the application was lodged. There is also a requirement under section 269S(1) that a TCO comes into force on the date the application was lodged, in this case, 11 January 2006.
Section 269SJ of the Customs Act 1901 specifies that certain goods cannot be subject to a TCO. Furthermore, the Act ensures that a TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration. This means that no disadvantages or new liabilities are imposed on individuals or entities in respect of actions taken before the registration date. However, the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Any breach of the provisions under the Customs Act 1901 may result in civil or criminal consequences. While the specific offences and penalties are not detailed in the Explanatory Statement, general provisions of the Act provide for penalties for non-compliance with customs duties and regulations. These may include fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties can vary significantly based on the specific breach and are outlined in the relevant sections of the Customs Act 1901.