EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602223
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 liquid filling plant on 11 January 2006.
Instrument
TCO No 0602223 was made on 24 March 2006. It declares that those certain liquid filling 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. 0602223 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 Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation aims to provide relief from customs duties on specific goods that meet certain criteria, enhancing economic efficiency and competitiveness. TCO No. 0602223, issued on 24 March 2006, addresses the issue of applying tariff concessions to certain liquid filling plant for Orica Australia Pty Ltd, reducing the duty rate from 5% to 0%. The policy objective is to ensure that such concessions are granted only when no substitutable goods are produced domestically, thereby supporting industries that rely on imported goods without local alternatives. The CEO's decision to issue this TCO was made without any objections, as no submissions were received in response to the published notice in the Gazette.
Scope and Application
The Tariff Concession Instrument No. 0602223, made under the Customs Act 1901, applies to individuals or entities, such as Orica Australia Pty Ltd, that seek tariff concessions for specific goods by applying to the Chief Executive Officer of Customs. The Act facilitates a reduction in the customs duty for goods specified in the TCO, provided certain criteria are met, notably that no substitutable goods are produced in Australia in the ordinary course of business. The instrument is geographically applicable across Australia, extending the Commonwealth's jurisdictional reach. Notably, the Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The application of the Act may be further detailed or modified by subordinate instruments, although this particular TCO directly applies the prescribed lower duty rate as outlined in Schedule 4 of the Customs Tariff Act 1995.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C (5), 269F, and 269P, which outline the criteria and process for applying for a TCO and the obligations of the Chief Executive Officer of Customs (CEO) in making such an order. Section 269F allows any person to apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, which includes the requirement that no substitutable goods are produced in Australia in the ordinary course of business, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the CEO by the Act include ensuring that an application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the CEO determines that the application meets the core criteria, they must make a written order declaring the goods subject to a specified rate of duty, as outlined in section 269P(3). Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made.
Section 269S(1) specifies that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. The commencement of TCO No. 0602223 is therefore 11 January 2006. This commencement date means that any rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of a person, other than the Commonwealth, to disadvantage that person or impose any liabilities in respect of actions taken before the date of registration.
In terms of consequences for breach, the explanatory statement does not explicitly mention offences, penalties, or civil/criminal consequences. However, any failure to comply with the requirements of the Customs Act 1901 and the associated regulations could potentially lead to legal actions for non-compliance, including the imposition of penalties or fines as provided for in other sections of the Customs Act or related legislation. The specific penalties would depend on the nature and severity of the breach, as well as any relevant administrative or judicial decisions.