EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619263
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 emulsions on 1 December 2006.
Instrument
TCO No 0619263 was made on 2 March 2007. It declares that those certain silicone emulsions 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. 0619263 is taken to have come into force on 1 December 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 Parliament of Australia, was amended to introduce the scheme for Tariff Concession Orders (TCOs) to provide relief on customs duty for certain imported goods under specific conditions. This legislative instrument aims to address the problem of potentially higher import costs for goods that are not produced domestically and for which no suitable domestic alternatives exist. The Tariff Concession Instrument No. 0619263 was introduced to provide zero customs duty on specific silicone emulsions, as requested by Dow Corning Australia Pty Ltd, upon the determination by the Chief Executive Officer of Customs that no substitutable goods were being produced in Australia. The policy objective, as outlined in the explanatory statement, was to benefit importers by reducing their duty costs while ensuring no adverse impact on existing rights or liabilities prior to the order's effective date.
Scope and Application
The Tariff Concession Instrument No. 0619263 under the Customs Act 1901 applies to the specific case of Dow Corning Australia Pty Ltd, which sought a Tariff Concession Order (TCO) for certain silicone emulsions. This instrument is applicable to the conduct of applying for and receiving a tariff concession, which involves a lower rate of customs duty on the specified goods. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia and the subsequent application of customs duties. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, but it does allow for the potential refund of duties on imports since the effective date of the TCO. The Act provides a framework under which the CEO of Customs can make decisions on tariff concessions, subject to certain conditions and exclusions as outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The application of the Act may be further defined through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0619263 under the Customs Act 1901 is primarily concerned with the application and granting of Tariff Concession Orders (TCOs). Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. For the CEO to grant such an order, the application must meet the core criteria outlined in section 269C. This involves verifying that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms like 'substitutable goods' and 'ordinary course of business' are provided in sections 269D, 269E, and 269P(3).
In this case, Dow Corning Australia Pty Ltd applied for a TCO on certain silicone emulsions on 1 December 2006. Following this application, the CEO issued Tariff Concession Order No. 0619263 on 2 March 2007, declaring that these silicone emulsions are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995. This means that the general duty rate of 5% is reduced to 0% for these specific goods. The CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted. No submissions were received in this instance.
Under subsection 269S(1), the TCO is considered to have come into force on the date the application was lodged, which in this case is 1 December 2006. Importantly, this order does not affect any existing rights or impose new liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration date. Importers will benefit from this concession, as they can apply for a refund of duties on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
The Act also outlines potential consequences for breaches, though specific offences and penalties are not detailed in the explanatory statement. Generally, breaches of the Customs Act 1901 can lead to civil and criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the specific provisions of the Act and any related regulations.