EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613441
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 ore processing frothers on 12 September 2005.
Instrument
TCO No 0613441 was made on 16 August 2006. It declares that those certain ore processing frothers 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. 0613441 is taken to have come into force on 12 September 2005.
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. 0613441, enacted under the Customs Act 1901, addresses the need for concessional tariff rates for specific goods imported into Australia. This legislative instrument was introduced to provide relief by reducing the customs duty on certain ore processing frothers to zero, down from the general rate of 5%, thereby encouraging their importation and use in Australian industry. The instrument was issued by the Chief Executive Officer of Customs following a valid application by Orica Australia Pty Ltd and subsequent determination that no substitutable goods were produced in Australia at the time of the application. The instrument came into effect on the date the application was lodged, 12 September 2005, and it does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth. The policy objective is to support Australian industries by making essential imported goods more affordable, thereby potentially boosting production and economic activity.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of tariff concession orders (TCOs) through which lower rates of customs duty can be applied to certain goods. This legislation applies to entities and individuals who are eligible to apply for a TCO, and it encompasses a broad range of industries where the importation of specific goods is concerned. The TCO scheme is applicable nationally within Australia, administered by the Chief Executive Officer of Customs. When a TCO application is made under section 269F of the Act, the CEO assesses whether it meets the core criteria specified in section 269C, ensuring that no substitutable goods are produced in Australia. If these criteria are satisfied, the CEO is mandated to issue a TCO, as outlined in section 269P(3). This legislative framework also includes provisions for public consultation, requiring the CEO to publish notices in the Gazette inviting submissions on the application, although in this instance, no submissions were received. The commencement of a TCO is effective from the date the application is lodged, as stipulated in subsection 269S(1) of the Act, with no retroactive application affecting the rights or imposing liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows any individual to apply to the CEO for a TCO concerning particular goods. For a TCO to be considered, the CEO must first ensure that the goods in question do not fall under the category specified in section 269SJ, which lists goods ineligible for a TCO. If the CEO is convinced that the application aligns with the core criteria outlined in section 269C, they must proceed to make a written order (TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, with the associated duty rate detailed in the order.
Section 269C stipulates that for a TCO application to meet the core criteria, it must be demonstrated that, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, subsection 269P(3) requires the CEO to issue a TCO. This was exemplified in TCO No. 0613441, where the CEO declared that certain ore processing frothers, subject to the application by Orica Australia Pty Ltd, were eligible for a TCO because no substitutable goods were produced in Australia, resulting in a duty rate of 0% instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications are processed in accordance with the provisions outlined in the Act, particularly sections 269C and 269K. This includes making a decision based on whether the application meets the core criteria and publishing a notice in the Gazette inviting submissions from any interested parties. In the case of TCO No. 0613441, the CEO did not receive any submissions in response to the published notice. Furthermore, section 269S(1) mandates that a TCO comes into effect on the day the application is lodged, which in this instance was 12 September 2005. Importantly, a TCO does not adversely affect the rights of any person other than the Commonwealth in respect of actions taken before the TCO's effective date.
Should there be any breach of the obligations outlined in the Customs Act 1901, the Act provides for various civil and criminal consequences. While the specific offences, penalties, and consequences are not detailed in the explanatory statement, the Act generally allows for enforcement actions, including fines and imprisonment, for violations related to the improper application or misuse of a TCO. These penalties are designed to ensure compliance with the legislative requirements and to protect the integrity of the customs duty system.