EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618510
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.
Dow Corning Australia Pty Ltd applied for a TCO in respect of certain silicone sealants on 14 November 2006.
Instrument
TCO No 0618510 was made on 02 February 2007. It declares that those certain silicone sealants 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. 0618510 is taken to have come into force on 14 November 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. The Act established the mechanism for Tariff Concession Orders (TCOs) under Part XVA, which allows for reduced customs duty rates on certain goods, provided no substitutable goods are produced in Australia. This legislation was introduced to address the gap in ensuring that Australian industries remain competitive without being hindered by excessive customs duties on imported goods that have no local alternatives. The enacting body responsible for this Act is the Australian Parliament, with the policy objective of fostering economic growth and protecting local industries by appropriately managing customs duties.
The Tariff Concession Instrument No. 0618510, issued under the Customs Act 1901, specifically provides tariff concessions for certain silicone sealants, lowering the duty rate from 5% to free, effective from 14 November 2006. The instrument was issued after Dow Corning Australia Pty Ltd applied for the concession, and the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. No submissions were received against the concession, and the instrument does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0618510, made under the Customs Act 1901, applies to the specific silicone sealants for which Dow Corning Australia Pty Ltd made an application. The instrument is applicable to the goods identified in the application and is in effect from the date the application was lodged, 14 November 2006. The Act allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) that provides a lower rate of customs duty for certain goods if specific criteria are met, such as the absence of substitutable goods produced in Australia. This instrument effectively grants these particular silicone sealants a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995, whereas the general duty rate is 5%. Importantly, the instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its effective date, and it benefits importers by potentially allowing them to claim refunds on duties paid before the TCO took effect. The geographic scope of this legislation is national, as it operates within the framework of Australian customs law, but its direct application is limited to the specific goods mentioned in the TCO.
Key Provisions
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO) under section 269F. A TCO allows for a reduced rate of customs duty on specified goods, provided the application meets core criteria outlined in sections 269C, 269B, and 269D. The CEO is mandated to make a TCO if no substitutable goods are produced in Australia on the day the application was lodged, and if the application pertains to goods not listed in section 269SJ, which excludes certain goods from TCO eligibility. The CEO must then publish a notice in the Gazette, inviting submissions from interested parties, although no submissions were received in response to TCO No. 0618510.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is made in respect of goods not specified in section 269SJ, and that the application meets the core criteria. The CEO must verify that no substitutable goods are being produced in Australia on the day the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any person who believes the TCO should not be granted to lodge a submission. Importers of goods affected by the TCO may apply for a refund of duty on goods imported since the TCO's effective date.
The Customs Act 1901 does not specify particular offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, any failure to comply with the conditions set forth in the TCO could potentially lead to the imposition of standard customs duties applicable to the goods in question. It is important to note that the TCO does not affect the rights of any person as at the date of registration, ensuring that no person is disadvantaged or incurs liabilities for actions taken before the TCO's effective date.