EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712376
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.
Rhodia Australia Pty Ltd applied for a TCO in respect of certain polydimethylsiloxane fluids on 02 August 2007.
Instrument
TCO No 0712376 was made on 12 October 2007. It declares that those certain polydimethylsiloxane fluids 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. 0712376 is taken to have come into force on 02 August 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 Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These TCOs allow for a reduced rate of customs duty on specified goods, provided certain conditions are met. The primary gap addressed by this legislation is the need for a structured process to assess and approve applications for tariff concessions, ensuring that such concessions are granted only when justified and where no domestic production of substitutable goods exists. The policy objective, as indicated within the Act, is to facilitate the importation of goods by lowering duty rates under specific circumstances, thus supporting economic efficiency and international trade. This instrument, Tariff Concession Instrument No. 0712376, was introduced to provide a tariff concession for certain polydimethylsiloxane fluids, reflecting the legislative intent to streamline customs duties and enhance trade facilitation.
Scope and Application
The Tariff Concession Instrument No. 0712376 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on certain goods, specifically polydimethylsiloxane fluids in this instance, provided that no substitutable goods are produced in Australia in the ordinary course of business. This applies to the entire Commonwealth of Australia and is contingent on the CEO of Customs determining that the application meets the core criteria outlined in the Act. The instrument specifies that the general rate of duty for these goods, which is 5%, is reduced to free duty upon the issuance of the TCO. The CEO must publish a notice in the Gazette inviting submissions on the application, although no submissions were received for this particular case. The TCO comes into force on the date the application was lodged, in this case, 2 August 2007, and does not disadvantage any person by affecting their rights as at the date of registration or impose liabilities for actions taken prior to the registration date. Importers will benefit from this TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO. The Act allows for the extension or restriction of the application through subordinate instruments.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0712376 under the Customs Act 1901 (section 269P(3)) declare that certain polydimethylsiloxane fluids are subject to a tariff concession order (TCO), resulting in a reduced customs duty from 5% to free. The instrument was issued following an application by Rhodia Australia Pty Ltd on 02 August 2007, and it came into effect on the same date. The Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C.
The obligations imposed by this Act on the parties and entities it governs include the requirement for the CEO to evaluate applications for TCOs to ensure they meet the core criteria (section 269C). If the CEO is satisfied that the application complies with the conditions, they must make a written order (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received in response to the notice.
In terms of potential offences and consequences, the Act does not explicitly outline specific criminal or civil penalties for breach of its provisions. However, any misuse or fraudulent claims regarding the TCO could potentially lead to legal consequences under broader criminal and customs laws. For example, knowingly providing false information in an application could be considered an offence under the Customs Act 1901, leading to fines or imprisonment as stipulated in the Act. Additionally, any failure to comply with customs regulations could result in penalties as per the Customs Act and associated regulations.