EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931406
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.
Solvay Interox applied for a TCO in respect of certain hydrogen peroxide manufacturing plant components on 26 August 2009.
Instrument
TCO No 0931406 was made on 13 November 2009. It declares that those certain hydrogen peroxide manufacturing plant components 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. 0931406 is taken to have come into force on 26 August 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. 0931406 was introduced in 2009 under the Customs Act 1901 to address the issue of providing tariff concessions on specific goods that were not produced in Australia. The instrument was enacted to facilitate lower customs duty rates on certain goods, thereby benefiting importers and aligning with the broader policy objective of promoting competitive and efficient trade practices. The instrument was developed following an application by Solvay Interox for tariff concessions on certain hydrogen peroxide manufacturing plant components. The instrument was published in the Gazette, inviting submissions from interested parties, none of which were received. The instrument became effective on the date the application was lodged, 26 August 2009, and it does not affect the rights of any person except to provide beneficial rights to importers, including the ability to apply for duty refunds under the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 0931406 applies to goods specified in the instrument, namely certain hydrogen peroxide manufacturing plant components, and is subject to the provisions of the Customs Act 1901. The instrument was created in response to an application by Solvay Interox, and its application is contingent upon the core criteria being met, specifically that no substitutable goods were produced in Australia at the time the application was lodged. The instrument is applicable across Australia, aligning with the national scope of the Customs Act 1901, which is administered by the Chief Executive Officer of Customs. This instrument does not apply to goods that are specified in section 269SJ of the Act, which includes those that cannot be subject to a Tariff Concession Order. The instrument is effective from the date the application was lodged, 26 August 2009, and does not affect the rights of any person in a manner that would disadvantage them or impose liabilities for actions taken prior to the instrument's registration. Any person, including importers, may apply for a Tariff Concession Order under the Act, and the CEO must consider such applications in line with the statutory criteria.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0931406 under the Customs Act 1901 are sections 269C, 269P, and 269S. Section 269C of the Act sets out the core criteria that a Tariff Concession Order (TCO) application must meet, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, a written order must be made, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). Section 269S stipulates that the TCO is to be taken as coming into force on the day the application was lodged (s 269S(1)).
The obligations imposed by the Act on the parties involved primarily concern the CEO of Customs. The CEO must determine whether an application for a TCO meets the core criteria as outlined in section 269C. If satisfied, the CEO must then issue a written TCO as specified in section 269P. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed. In this instance, the CEO did not receive any submissions in response to this invitation.
The Act also outlines potential consequences for non-compliance. While the Explanatory Statement does not specify criminal or civil penalties for breach, it is implicit that failure to adhere to the statutory requirements could result in legal challenges or administrative penalties. For example, if the CEO fails to properly assess an application or issues a TCO without meeting the statutory criteria, this could lead to legal disputes or be subject to review by the courts. The Tariff Concession Instrument itself does not impose any liabilities on any person and does not affect the rights of a person other than the Commonwealth as at the date of registration. However, importers of the affected goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.