EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610951
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.
Wesfarmers Limited applied for a TCO in respect of a certain prill plant on 28 June 2006.
Instrument
TCO No 0610951 was made on 22 September 2006. It declares that those certain prill plants 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. 0610951 is taken to have come into force on 28 June 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 within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The purpose of this legislation is to provide relief from customs duty on certain goods, thereby addressing the gap where Australian businesses might face undue financial burden due to high import tariffs. Specifically, section 269F of the Act allows for the application of a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for tariff concessions. The policy objective, as outlined in the explanatory statement, is to ensure that no substitutable goods are produced in Australia when a TCO application is made, thereby supporting economic efficiency and competitive pricing. The Tariff Concession Instrument No. 0610951, made on 22 September 2006, exemplifies this process by granting a tariff concession to Wesfarmers Limited for certain prill plants, reducing the duty from 5% to free, contingent on the absence of substitutable goods produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0610951, under the Customs Act 1901, applies to goods specified in the instrument, in this case certain prill plants, and is targeted towards entities involved in the import of these goods. The instrument is applicable to the Commonwealth and affects the rates of customs duty for the specified goods, with the general rate being reduced to free duty for those goods subject to the Tariff Concession Order (TCO). The Act operates at the national level, with the Chief Executive Officer of Customs making decisions on TCO applications, and the TCO itself coming into effect from the date the application was lodged. Notably, the TCO does not disadvantage any person, other than the Commonwealth, in terms of their rights or liabilities for actions taken before the TCO was registered, but it does provide benefits to importers by allowing them to apply for a refund of duty on the specified goods imported since the effective date of the TCO. Any exclusions or exemptions are determined by section 269SJ of the Act, which outlines goods that cannot be subject to a TCO, and the application of the TCO may be further refined or extended through subordinate instruments as necessary.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0610951 (referred to as TCO No. 0610951) under the Customs Act 1901 (the Act) include sections 269C, 269P(3), and 269SJ. Section 269C outlines the core criteria for a Tariff Concession Order (TCO) application, stipulating that the goods must not have substitutable alternatives produced in Australia. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written TCO must be issued. Section 269SJ lists the goods that cannot be subject to a TCO. TCO No. 0610951, issued on 22 September 2006, applies to certain prill plants, declaring them as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, effectively granting them a free duty rate instead of the general 5% duty rate.
The obligations imposed on the parties by the Act include the requirement for applicants to ensure their goods meet the core criteria as per section 269C of the Act. Specifically, applicants must demonstrate that no substitutable goods are produced in Australia. The CEO, on receiving a valid application, must then make a decision based on these criteria and, if satisfied, issue a written TCO as per section 269P(3). The CEO is also mandated to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting any interested parties to lodge submissions opposing the TCO if they believe it should not be granted. This ensures transparency and allows for stakeholder input.
The legislation also specifies the consequences of non-compliance. While the explanatory statement does not explicitly detail civil or criminal penalties for breaches of the Act, it does clarify that the TCO does not affect the rights of any person adversely or impose new liabilities. This means that any breaches or non-compliance with the Act or its provisions would likely be addressed through other relevant legal frameworks rather than through this specific TCO instrument. The rights of importers are positively affected, allowing them to apply for a refund of duties on goods imported since the TCO's effective date. This refund mechanism is outlined in paragraph 126(1)(r) of the Regulations, ensuring that importers can benefit from the tariff concession without incurring any additional burdens or liabilities.