EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902345
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.
Brenntag Pty Ltd applied for a TCO in respect of certain siloxanes on 23 January 2009.
Instrument
TCO No 0902345 was made on 17 April 2009. It declares that those certain siloxanes 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. 0902345 is taken to have come into force on 23 January 2009.
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. 0902345, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions on certain goods, specifically siloxanes, to support Australian businesses by reducing the cost of importing these goods. This instrument was introduced to enable the Chief Executive Officer of Customs to grant tariff concessions on siloxanes, thereby making the importation of these goods more cost-effective. The policy objective, as outlined in the Customs Act, is to facilitate the import of goods where no substitutable Australian-produced goods exist, thus promoting economic efficiency and competitiveness. The instrument was published in the Gazette, inviting submissions from interested parties, although none were received. The tariff concession became effective from the date the application was lodged, ensuring that importers of siloxanes are eligible for refunds of duty paid prior to the concession.
Scope and Application
The Tariff Concession Instrument No. 0902345 under the Customs Act 1901 applies to the concession of customs duty on certain siloxanes, specifically those identified in the instrument. This concession is contingent upon the Chief Executive Officer of Customs determining that the siloxanes in question are not substitutable with any goods produced in Australia and that they meet the criteria outlined in section 269C of the Act. The instrument extends its application to Brenntag Pty Ltd, the entity that applied for the tariff concession, and affects the importation of the specified siloxanes within Australia. The geographic reach of this legislation is national, encompassing all states and territories within Australia. Notably, the instrument does not specify any exclusions or exemptions beyond those already outlined in section 269SJ of the Act, which prohibits certain goods from being subject to a tariff concession order. The application of this legislation may be further refined through subordinate instruments, which can provide additional details or adjustments to the scope of the concessions granted.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs), which are set out in Part XVA of the Act. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the CEO determines that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, the CEO must decide if the application meets the core criteria (section 269C). The core criteria are satisfied if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C and 269P(3)). If satisfied, the CEO must issue a written order (TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a lower rate of customs duty.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must assess the validity of a TCO application, determine if it meets the core criteria, and, if so, issue a TCO. The applicant must ensure that the application is complete and accurate, detailing the goods for which the concession is sought. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions.
In terms of offences and penalties, the Customs Act 1901 does not explicitly state penalties for breaches related to TCOs. However, it is pertinent to note that any misuse of a TCO, such as fraudulent applications or misrepresentation of facts, could potentially lead to criminal charges under other sections of the Customs Act or associated legislation. The Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO's registration date (subsection 269S(1)). Importers of the goods affected by the TCO may apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.