EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613541
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.
Hydromet Corporation Ltd applied for a TCO in respect of certain battery recycling plant on 16 August 2006.
Instrument
TCO No 0613541 was made on 10 November 2006. It declares that those certain battery recycling plant 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. 0613541 is taken to have come into force on 16 August 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. 0613541 was enacted in 2006 under the Customs Act 1901 to address the need for a reduced customs duty rate for certain goods not produced in Australia. The instrument was introduced to provide tariff concessions on specified goods, allowing for a more competitive market and incentivising the importation of these goods. Enacted by the Australian Parliament, the instrument aims to meet the core criteria for tariff concessions as outlined in the Customs Act, ensuring that such concessions do not apply to goods that are already produced domestically. The process involves an application to the Chief Executive Officer of Customs, who must be satisfied that the goods in question are not substitutable by Australian-made products and that the concession will not negatively impact the domestic industry. The Tariff Concession Order (TCO) for Hydromet Corporation Ltd's battery recycling plant was made following this legislative framework, setting the customs duty rate at 0% for these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0613541, made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). This legislation allows for a lower rate of customs duty on certain goods, provided that they meet the criteria set out in the Act. The application of this Act is limited to goods that are not specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concessions. The CEO must ensure that the application does not pertain to goods that are substitutable and produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets the core criteria, a TCO is made, and the goods are subject to a lower rate of duty as specified in the Customs Tariff Act 1995.
The TCO applies nationally and affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The Act does not disadvantage any person or impose liabilities on any person for actions taken before the registration of the TCO. The CEO is required to publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission, although in this case, no submissions were received. The TCO comes into force on the day the application was lodged, which in this instance was 16 August 2006.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0613541 (TCO No. 0613541) are sections 269C, 269B, 269E, 269P, and 269K of the Customs Act 1901. These sections outline the criteria for applying for and granting a Tariff Concession Order (TCO) for specific goods, the process for assessing these applications, and the requirements for public consultation. Under section 269C, the CEO must assess if the application meets the core criteria, which involves determining if there are no substitutable goods produced in Australia on the day the application was lodged (section 269B and 269E). If these criteria are satisfied, the CEO is required to make a TCO under section 269P, and must publish a notice in the Gazette inviting any interested parties to submit any objections (section 269K). In this case, TCO No. 0613541 was made on 10 November 2006, declaring that certain battery recycling plants are subject to a 0% duty rate instead of the general 5% rate, as no substitutable goods were being produced in Australia.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. For applicants, such as Hydromet Corporation Ltd, the obligation is to ensure that their application for a TCO is complete and meets the core criteria set out in section 269C. This includes providing sufficient evidence that no substitutable goods are produced in Australia. The CEO, on the other hand, has the obligation to assess the application against these criteria and, if satisfied, to make a written order declaring the goods to which the TCO applies (section 269P). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting submissions from any interested parties (section 269K). In this instance, the CEO did not receive any submissions in response to the published notice.
The Customs Act 1901 provides for certain offences and penalties related to the misuse or non-compliance with the TCO provisions. While the explanatory statement does not detail specific offences or penalties for breaches of TCO provisions, general provisions in the Customs Act 1901 apply. Typically, breaches of the Customs Act 1901 can lead to criminal charges, with penalties that may include substantial fines and imprisonment. For instance, under section 239 of the Customs Act 1901, a person can be fined up to 10,000 penalty units or imprisoned for five years, or both, for serious breaches such as fraud or knowingly making a false statement. Civil penalties may also apply, including fines and other financial penalties for non-compliance with customs duties and other regulations. It is important to note that the specific penalties for breaches of TCO provisions would need to be interpreted in the context of the broader Customs Act 1901 and related legislation.