EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0830751
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 Limited applied for a TCO in respect of certain catalysts on 10 September 2008.
Instrument
TCO No 0830751 was made on 05 December 2008. It declares that those certain catalysts 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. 0830751 is taken to have come into force on 10 September 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 Tariff Concession Instrument No. 0830751, enacted in 2008, pertains to the Customs Act 1901. It was designed to address the need for a streamlined process to allow for tariff concessions on specific goods, thereby facilitating trade and potentially reducing costs for businesses importing these goods. This instrument was introduced by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901. The primary policy objective of this legislation is to provide relief to importers by allowing for a lower rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia. The instrument ensures that the rights of importers are protected and can benefit from duty refunds for goods imported since the effective date of the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a scheme whereby Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods eligible for a TCO, thus potentially benefiting from a lower rate of customs duty. The geographic reach of this legislation is national, applying across Australia. The Act provides exclusions for certain goods specified under section 269SJ, which cannot be subject to a TCO. The Act may extend its application through subordinate instruments such as the Customs Tariff Act 1995, which details the prescribed rates of duty. In the case of Rhodia Australia Pty Limited's application for a TCO concerning certain catalysts, the CEO issued TCO No. 0830751, effective from 10 September 2008, after determining that no substitutable goods were produced in Australia at the time of application. This order exempts these specific catalysts from the general duty rate of 5%, applying a free rate instead.
Key Provisions
The Tariff Concession Order (TCO) No. 0830751 under the Customs Act 1901 (section 269C) applies to certain catalysts that were the subject of an application by Rhodia Australia Pty Limited. This TCO provides that these specific catalysts will be subject to a rate of duty of free, as opposed to the general rate of 5% (section 269P(3)). The instrument was made on 5 December 2008 and is deemed to have come into effect on 10 September 2008, the date the application was lodged (subsection 269S(1)). The TCO is based on the CEO's satisfaction that no substitutable goods were produced in Australia on the day the application was lodged, fulfilling the core criteria for such concessions (section 269C). This legislative provision ensures that the catalysts in question benefit from a lower rate of customs duty, provided they meet the specified conditions.
The Act imposes several obligations and requirements on the parties involved in the TCO process. For instance, any person may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act (section 269F). The CEO must then decide whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Furthermore, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO did not receive any submissions in response to the notice for this particular TCO.
Any breach of the provisions outlined in the Customs Act 1901 can lead to significant consequences. While the explanatory statement does not explicitly state penalties for breaches of the TCO provisions, the general provisions of the Customs Act 1901 and related regulations may apply. Typically, breaches could result in civil or criminal penalties, depending on the severity and intent of the breach. For instance, knowingly making a false statement in an application for a TCO could lead to criminal charges, including fines or imprisonment, as outlined in the Act and associated regulations. It is important for all parties involved to comply with the requirements to avoid these potential consequences.