EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908130
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.
Orica Australia applied for a TCO in respect of certain di trimethylolpropane on 10 March 2009.
Instrument
TCO No 0908130 was made on 29 May 2009. It declares that those certain di trimethylolpropane 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. 0908130 is taken to have come into force on 10 March 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. 0908130, introduced under the Customs Act 1901, aims to address the need for tariff concessions for specific goods that are not produced domestically. Enacted by the Parliament of Australia, this instrument facilitates the reduction or elimination of customs duty on certain imported goods, provided that no suitable Australian-made alternatives exist. The policy objective is to support industries that rely on imported materials, ensuring they remain competitive without the burden of high import duties. The Tariff Concession Order No. 0908130, specifically concerning certain di trimethylolpropane, was made to reflect these objectives, allowing for the importation of these goods duty-free under the condition that they are not substitutable by Australian-produced goods. This measure assists businesses in maintaining operational efficiency and cost-effectiveness, ultimately benefiting the broader economy by ensuring the availability of essential materials.
Scope and Application
The Tariff Concession Instrument No. 0908130, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). The Act allows for the Chief Executive Officer of Customs to grant a TCO to a person who applies for tariff concessions, provided that the goods in question meet the core criteria outlined in the Act. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business. In this instance, the TCO was applied for by Orica Australia concerning certain di trimethylolpropane, and the CEO determined that no substitutable goods were produced in Australia, allowing for the concession to be granted. The application of the TCO results in a reduction of the duty rate from the general rate of 5% to free, benefiting the rights of importers who can apply for refunds on duties paid on the specified goods since the date the TCO was lodged. The geographic reach of this Act is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The TCO does not affect the rights of any person adversely and does not impose any liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0908130, issued under the Customs Act 1901, relate to the application and granting of Tariff Concession Orders (TCOs). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not excluded under section 269SJ. The CEO must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied, they must issue a written order (section 269P(3)), specifying that the goods in question are subject to a reduced customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
Under this legislation, Orica Australia successfully applied for a TCO for certain di trimethylolpropane, which resulted in the CEO declaring these goods to be exempt from the usual 5% duty rate, thereby imposing a free rate instead. This is contingent on the CEO's determination that no substitutable goods were produced domestically. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting public submissions on the TCO application, although in this instance, no submissions were received.
The obligations imposed by the Act on the parties involved include the requirement for Orica Australia to submit a valid application that meets the core criteria for a TCO. The CEO, in turn, has the obligation to assess the application against these criteria, publish a notice in the Gazette, and consider any submissions received. Once the CEO determines that the application meets the core criteria, they are required to issue a written TCO. Furthermore, the Act mandates that the TCO does not disadvantage any person except the Commonwealth and does not impose any liabilities on any person for actions taken prior to the TCO's registration date.
Failure to comply with the provisions of the Customs Act 1901 or the conditions set out in a TCO may result in civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties. Generally, breaches of customs regulations can lead to penalties such as fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties would be outlined in the relevant sections of the Customs Act 1901 and any associated regulations.