EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804741
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.
Quantum Chemicals Pty Ltd applied for a TCO in respect of certain alkali refined linseed oil on 27 March 2008.
Instrument
TCO No 0804741 was made on 13 June 2008. It declares that those certain alkali refined linseed oil 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. 0804741 is taken to have come into force on 27 March 2008.
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, includes provisions for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce the customs duty payable on specified goods. The Tariff Concession Instrument No. 0804741, enacted in 2008, was introduced to address the issue of applying reduced customs duty rates to goods for which no substitutable Australian-made alternatives exist. This instrument declares that certain alkali refined linseed oil is subject to a zero rate of duty, effective from the date of the application on 27 March 2008, as the CEO determined that no substitutable goods were produced in Australia at that time. The objective of this measure is to ensure that importers of these goods are not disadvantaged and can potentially apply for refunds of duty paid on imports since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0804741 under the Customs Act 1901 applies to Quantum Chemicals Pty Ltd and their application for a Tariff Concession Order (TCO) concerning certain alkali refined linseed oil. The Act allows the Chief Executive Officer of Customs to grant a TCO that reduces the customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The application of this Act extends to the Commonwealth jurisdiction and applies to the conduct and transactions involving the importation of specified goods. The Act explicitly excludes certain goods as stated in section 269SJ, and in this instance, the CEO was satisfied that the alkali refined linseed oil did not fall under these exclusions. The TCO applies nationally and has come into force on the day the application was lodged, 27 March 2008. The legislation does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person; instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The scope of the Act may be extended or restricted through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) under section 269F. These orders provide a lower rate of customs duty on specified goods, as outlined in section 269P(3). For a TCO to be issued, the CEO must first be satisfied that the application is not for goods listed in section 269SJ, which are ineligible for TCOs. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia at the time of application, as defined by sections 269D and 269E.
For Quantum Chemicals Pty Ltd's application for alkali refined linseed oil, the CEO determined that no substitutable goods were produced in Australia on the day the application was lodged, thus meeting the core criteria. Consequently, the CEO issued TCO No. 0804741 on 13 June 2008, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which reduced the duty on these goods from the general rate of 5% to free. This TCO came into force on 27 March 2008, the date of the application, as stipulated by subsection 269S(1). It's important to note that this TCO does not disadvantage any person or impose new liabilities on anyone, except for potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Under subsection 269K(1) of the Customs Act 1901, the CEO is required to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any person who believes there are reasons against making the TCO to submit their views. For TCO No. 0804741, no submissions were received in response to this invitation, indicating that the application proceeded without opposition. The TCO does not affect the rights of any person except the Commonwealth, ensuring that it does not impose liabilities on any person or disadvantage anyone in relation to actions taken before the TCO's registration date.