EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711518
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.
Arkema Pty Ltd applied for a TCO in respect of certain hydrochlorofluorocarbon blends on 17 July 2007.
Instrument
TCO No 0711518 was made on 21 September 2007. It declares that those certain hydrochlorofluorocarbon blends 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. 0711518 is taken to have come into force on 17 July 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, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise duties, including a scheme for Tariff Concession Orders (TCOs) as outlined in Part XVA. The primary problem this legislation addresses is the facilitation of trade by reducing customs duties on certain imported goods that are not domestically produced, thereby encouraging trade and economic growth. TCO No. 0711518, introduced on 21 September 2007, applies to certain hydrochlorofluorocarbon blends, granting them a free duty rate as no substitutable goods were being produced in Australia at the time of application. This tariff concession aims to benefit importers by potentially allowing them to claim duty refunds for goods imported since the effective date of the order, 17 July 2007, without imposing any new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0711518, made under the Customs Act 1901, applies to any person or entity seeking tariff concessions for specific goods, in this case, certain hydrochlorofluorocarbon blends. This legislation is pertinent to importers of these goods, as it provides a concession on the customs duty, reducing it from a general rate of 5% to free of charge, contingent upon the goods not having substitutable alternatives produced in Australia. The instrument's geographic reach is national, as it is part of the Commonwealth legislation, and it does not specify exclusions or exemptions beyond those stipulated in section 269SJ of the Customs Act, which excludes certain goods from being subject to tariff concessions. The instrument extends the application of the Customs Act by providing specific details about the goods eligible for tariff concessions, ensuring that the broader legislative framework is tailored to particular import scenarios. The commencement date aligns with the date the application was lodged, 17 July 2007, and the instrument's provisions do not retroactively affect any rights or liabilities prior to its effective date.
Key Provisions
The main operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269F of the Customs Act 1901. Section 269C requires the Chief Executive Officer of Customs (CEO) to consider whether a Tariff Concession Order (TCO) application meets the core criteria. Section 269B explains the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are crucial in determining if a TCO can be granted. Section 269D further defines "goods produced in Australia," section 269E defines "ordinary course of business," and section 269F allows a person to apply to the CEO for a TCO. If the CEO is satisfied that the application meets the core criteria and that no substitutable goods were produced in Australia, the CEO must make a written TCO as per section 269P(3).
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily on the CEO and the applicant. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. The CEO must also verify if the application meets the core criteria by confirming that no substitutable goods were produced in Australia on the date the application was lodged. The applicant, on the other hand, must provide all necessary information and evidence to support their application, ensuring it complies with the provisions of the Act.
Breaches of the provisions of this legislation may result in various civil and criminal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 can generally lead to penalties under the Customs Act and associated regulations. For example, knowingly or recklessly making a false statement in an application could lead to fines or imprisonment under section 236 of the Customs Act. Additionally, failure to comply with the terms of a TCO may result in the imposition of customs duty at the applicable rate, along with potential financial penalties.
In summary, the Tariff Concession Instrument No. 0711518 provides a mechanism for granting tariff concessions on certain goods under specific conditions, ensuring that no substitutable goods are produced in Australia. The CEO has the responsibility to evaluate applications and make TCOs accordingly. The rights of importers are protected, and they may benefit from refunds of duty for goods imported after the TCO comes into force. Any failure to comply with the Act’s provisions may result in legal consequences, including financial penalties.