EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716713
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 hfc hydroflurocarbon mixtures on 28 September 2007 .
Instrument
TCO No 0716713 was made on 30 November 2007. It declares that those certain hfc hydroflurocarbon mixtures 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. 0716713 is taken to have come into force on 28 September 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 provide for the control and regulation of customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs) to provide tariff relief on certain goods. Enacted by the Parliament of Australia, this legislation aims to facilitate trade and protect Australian industries by allowing the Chief Executive Officer of Customs to grant tariff concessions under specific conditions. Instrument No. 0716713 was introduced to provide a tariff concession for certain hydrofluorocarbon mixtures, reducing the duty rate from 5% to free, thereby addressing the gap in tariff relief for these specific imports. This measure was introduced following an application by Arkema Pty Ltd, and after no objections were received in response to the public notice, the TCO was issued, effective from the date of the application. This concession aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901, under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to applications made by individuals or entities seeking tariff concessions for specific goods, provided these goods are not those listed in section 269SJ of the Act, which details the goods ineligible for a TCO. The legislation outlines that a TCO can be granted if, on the application date, no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this legislation is national, impacting entities and individuals involved in the importation of goods subject to the TCO. The application process requires the CEO to publish a notice in the Gazette inviting objections, though in the case of TCO No. 0716713 concerning HFC hydrofluorocarbon mixtures, no submissions were received. The TCO applies retroactively to the date the application was lodged, beneficially affecting the rights of importers by reducing the duty rate from 5% to free, without imposing any liabilities on non-Commonwealth persons.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0716713 under the Customs Act 1901 (section 269C, 269B, 269P) mandate that the Chief Executive Officer of Customs (CEO) must assess whether an application for a Tariff Concession Order (TCO) meets core criteria before proceeding. If the application is deemed valid and no substitutable goods are produced in Australia, the CEO is required to issue a written TCO, declaring the goods to which a specific tariff rate applies. In this case, the TCO No. 0716713 was issued for certain HFC hydrofluorocarbon mixtures, resulting in a zero duty rate for these goods (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure that their submissions to the CEO are made in accordance with the stipulated criteria, specifically ensuring that no substitutable goods are produced in Australia (section 269C). Secondly, the CEO has the duty to assess the application against these criteria and make a decision accordingly. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received (subsection 269K(1)). Lastly, the TCO itself outlines the conditions under which the tariff concessions apply, ensuring that the rights of importers are not adversely affected by its implementation (subsection 269S(1)).
Should any party fail to comply with the requirements of the Act, several consequences may arise. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act 1901 can generally lead to significant civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. The maximum penalties would be as prescribed by the relevant sections of the Customs Act 1901, which could include fines up to a substantial amount and imprisonment for a period determined by the severity and intent behind the breach. This underscores the importance of adhering to the statutory requirements to avoid potential legal repercussions.