EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618627
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.
Cytec Australia Holdings Pty Limited applied for a TCO in respect of certain sodalite scale inhibitor solutions on 20 November 2006.
Instrument
TCO No 0618627 was made on 09 February 2007. It declares that those certain sodalite scale inhibitor solutions 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. 0618627 is taken to have come into force on 20 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 by the Australian Parliament to manage and regulate the importation and exportation of goods, including the imposition of customs duty. This Act facilitates the application of tariff concession orders (TCOs) to provide relief from customs duty on certain goods. TCO No. 0618627, enacted in 2007, addresses the issue of granting tariff concessions to specific goods that are not produced domestically, thereby ensuring competitive pricing and accessibility. The Customs (Tariff Concession) Order 2007 applies to certain sodalite scale inhibitor solutions, providing a zero-duty rate where the general rate is 5%, aiming to benefit importers and align with the policy objective of supporting Australian industries by reducing costs associated with importing these essential goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and implementation of Tariff Concession Orders (TCO) which facilitate the reduction of customs duty on certain goods. This Act applies to any person or entity wishing to import goods that meet specific criteria, whereby no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of the Act is national, impacting all importers across Australia. The Act allows for the CEO of Customs to determine the eligibility of goods for tariff concessions based on the criteria outlined in sections 269C and 269D, with the TCO providing a mechanism to reduce the duty on specified goods from the general rate to a lower prescribed rate or even free, depending on the item specified in the Customs Tariff Act 1995. Notably, the Act excludes certain goods from being subject to a TCO as outlined in section 269SJ. The Act also extends its application through subordinate instruments, such as the Regulations, which may further detail the process and conditions for TCOs.
Key Provisions
The Customs Act 1901, as amended, contains provisions allowing for the creation of Tariff Concession Orders (TCOs) through Part XVA. A TCO allows for a lower rate of customs duty on certain goods. Section 269F of the Act details the process by which a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided the goods are not listed in section 269SJ, which details goods that cannot be subject to a TCO. If the CEO is satisfied that the application is valid, they must determine whether it meets the core criteria set out in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these conditions are met, the CEO is obligated to make a written order (a TCO) under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations under this legislation require that any person seeking a TCO must ensure their application adheres to the criteria set out in the Act. They must verify that no substitutable goods were produced in Australia at the time of application and must provide any necessary documentation to support their application. The CEO, on receiving a valid application, must publish a notice in the Gazette and provide an opportunity for interested parties to lodge submissions. If no submissions are received, the CEO proceeds to make the TCO. The CEO’s decision must be based on the core criteria and the information provided by the applicant.
The Act imposes penalties for non-compliance with the requirements of a TCO. While the specific penalties for breaching the Customs Act are not detailed in the Explanatory Statement, generally, breaches of customs regulations can lead to both civil and criminal penalties. Civil penalties can include fines, while criminal penalties can include imprisonment. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the broader Customs Act and related regulations. It is important for entities subject to the Act to ensure full compliance to avoid any potential legal repercussions.