EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607297
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.
CSR Sugar Pty Ltd applied for a TCO in respect of certain molecular sieves on 18 April 2006.
Instrument
TCO No 0607297 was made on 7 July 2006. It declares that those certain molecular sieves 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 free.
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. 0607297 is taken to have come into force on 18 April 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 imposition of customs duties on imported goods. The Act was designed to regulate the import and export of goods, ensuring compliance with Australia's trade obligations and generating revenue through customs duties. Part XVA of the Act specifically addresses Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods under specific conditions. The Tariff Concession Instrument No. 0607297, made on 7 July 2006, exemplifies the application of this framework by providing a tariff concession for certain molecular sieves, resulting in a reduction of duty from 5% to free. This instrument was enacted in response to an application by CSR Sugar Pty Ltd, and the decision was made following a process of consultation and review as outlined in the Act, ensuring no substitutable goods were produced in Australia at the time of application.
Scope and Application
The Tariff Concession Instrument No. 0607297, made under Part XVA of the Customs Act 1901, applies to persons or entities seeking tariff concessions on specific goods imported into Australia. The instrument was issued in response to an application by CSR Sugar Pty Ltd for certain molecular sieves, which are now subject to a zero rate of customs duty instead of the general 5% rate, provided the application met the core criteria set out in the Act. This concession applies to the named goods and is effective from the date the application was lodged, 18 April 2006. The instrument does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The scope of the Act is further clarified by definitions in sections 269D, 269E and 269F, detailing terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods". The instrument itself does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities, although it does allow for duty refunds to importers under certain conditions.
Key Provisions
The Tariff Concession Instrument No. 0607297 under the Customs Act 1901 operates by establishing a framework for the application and approval of Tariff Concession Orders (TCOs) (sections 269F, 269C). When an application for a TCO is submitted, the Chief Executive Officer of Customs (CEO) assesses whether the application meets the core criteria, specifically ensuring that no substitutable goods are produced in Australia at the time of application (section 269C). If the criteria are satisfied, the CEO issues a written TCO that specifies the goods and the reduced customs duty applicable to them (subsection 269P(3)).
The obligations imposed on the parties by the Act include the requirement for applicants to demonstrate that the goods for which a TCO is sought are not substitutable by Australian-produced goods (section 269C). Additionally, the CEO must consult the public by publishing a notice in the Gazette, inviting any interested parties to provide submissions against the TCO application (subsection 269K(1)). In the case of TCO No. 0607297, no submissions were received, indicating public acceptance of the concession.
Under the Act, breaches or non-compliance with the provisions for TCOs can lead to various civil and criminal consequences. For instance, incorrect claims for tariff concessions may result in penalties, including fines and imprisonment for serious offences. The maximum penalties are stipulated in the relevant sections of the Customs Act 1901 and associated regulations, though specific details are not provided in the explanatory statement. The Act ensures that the TCO does not adversely affect the rights of any person as at the date of registration and does not impose new liabilities on individuals or entities (subsection 269S(1)).