EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703307
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.
Huntsman Corporation Australia applied for a TCO in respect of certain monobutyl ethylene glycol ethers on 2 March 2007.
Instrument
TCO No 0703307 was made on 25 May 2007. It declares that those certain monobutyl ethylene glycol ethers 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. 0703307 is taken to have come into force on 2 March 2007.
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 regulate the import and export of goods in Australia, including the imposition and collection of customs duties. In 2007, Tariff Concession Instrument No. 0703307 was introduced under Part XVA of the Act to address the specific issue of applying tariff concessions for certain imported goods. This instrument allows for a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO), provided that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was introduced following an application by Huntsman Corporation Australia for a TCO concerning certain monobutyl ethylene glycol ethers, which was subsequently approved by the Chief Executive Officer of Customs. The enactment of this instrument by the relevant authority was aimed at ensuring that the tariff concessions benefit importers without imposing any liabilities on them or disadvantaging any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which provide for a lower rate of customs duty on certain goods. This mechanism allows for the application of a zero rate of duty on goods specified in the TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business, as per the criteria set out in section 269C of the Act. The process for applying for a TCO begins with an application to the CEO, followed by a decision on whether the application meets the core criteria, as delineated in section 269B and 269C. TCO No. 0703307, made on 25 May 2007, granted a tariff concession to Huntsman Corporation Australia for certain monobutyl ethylene glycol ethers, reducing the duty from 5% to 0%. This order came into force on 2 March 2007, the date of application, without affecting any existing rights or imposing liabilities on anyone other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0703307 pertain to the application and issuance of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901 (section 269F). The instrument declares that certain monobutyl ethylene glycol ethers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby reducing the customs duty from 5% to 0%. The order hinges on the CEO of Customs being satisfied that no substitutable goods are produced in Australia, as per section 269C of the Act. Section 269P(3) mandates that if the core criteria are met, the CEO must make a written TCO. This particular instrument was made on 25 May 2007, effective from 2 March 2007.
The obligations under the Act require the CEO to ensure that the application for a TCO complies with the core criteria outlined in section 269C. If the CEO determines that the application meets these criteria, a TCO must be issued, as stipulated in section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions on the proposed TCO within a reasonable time frame, as per section 269K(1). The CEO in this case did not receive any submissions opposing the TCO.
In terms of legal consequences, the Act does not explicitly state any penalties for non-compliance with the TCO provisions. However, any breach of the Customs Act 1901 or the Customs Tariff Act 1995 could lead to civil or criminal penalties as outlined in other sections of those Acts. For example, under section 253 of the Customs Act 1901, penalties can include fines and imprisonment for knowingly or recklessly making a false statement or representation in a customs matter. Additionally, any person who contravenes the provisions of the Customs Tariff Act 1995 may face penalties as provided under the Act, which could include fines and imprisonment.