EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949845
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.
Hexion Speciality Chemicals applied for a TCO in respect of certain phenolic resin on 22 December 2009.
Instrument
TCO No 0949845 was made on 12 March 2010. It declares that those certain phenolic resin 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. 0949845 is taken to have come into force on 22 December 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. 0949845 was enacted in 2010 under the Customs Act 1901, aiming to facilitate tariff concessions for specific goods by reducing customs duty rates. This instrument was introduced to address the need for streamlined processes in granting tariff concessions to ensure that certain imported goods are not subjected to prohibitively high duties, thereby promoting trade and economic efficiency. The instrument was developed in response to an application by Hexion Speciality Chemicals for a tariff concession on certain phenolic resin, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for concession. The instrument was created to provide a clear and effective mechanism for applying tariff concessions, ensuring that the process is both transparent and accessible for applicants while maintaining the integrity of Australia's customs regulations.
Scope and Application
The Tariff Concession Instrument No. 0949845, issued under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) for certain phenolic resins. This legislation applies to entities or individuals seeking to import specified goods, in this case, Hexion Speciality Chemicals, which applied for the concession concerning certain phenolic resins on 22 December 2009. The application of the TCO is contingent on satisfying core criteria, specifically that no substitutable goods are produced in Australia at the time the application is lodged. The scope of this Act extends nationally, affecting all relevant importers within Australia, and it is administered by the Chief Executive Officer of Customs. The TCO provides a concession by reducing the duty on these specific resins from the general rate of 5% to free, effective from the date the application was made. Importantly, the TCO does not impose any new liabilities on persons and protects the rights of any existing parties as of the date of registration, ensuring no one is disadvantaged or incurs liabilities for actions taken prior to the concession's implementation.
Key Provisions
The Tariff Concession Order (TCO) No. 0949845 under the Customs Act 1901 (section 269P(3)) allows for a concession on the duty payable on certain phenolic resin. This concession reduces the duty from the general rate of 5% to free, effective from the date of application, 22 December 2009 (subsection 269S(1)). This order was made following an application by Hexion Speciality Chemicals and was based on the absence of substitutable goods produced in Australia (section 269C). The order specifies that the goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties involved with TCOs. An applicant must ensure that their application for a TCO does not concern goods specified in section 269SJ, which are ineligible for such concessions. The Chief Executive Officer of Customs (CEO) must review the application to confirm it meets the core criteria outlined in section 269C. Once satisfied, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can result in various consequences. While the explanatory statement does not specify detailed offences or penalties, breaches of customs regulations generally can lead to civil and criminal penalties. For civil penalties, the Act may provide for fines up to the maximum prescribed by the relevant legislation. Criminal penalties can include imprisonment and fines, depending on the severity of the breach and the specific provisions of the Customs Act 1901 and associated regulations.
The rights of importers are positively affected by this TCO. Specifically, importers can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). This refund mechanism ensures that importers who have already paid the higher duty rate can reclaim the difference. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth, safeguarding the rights of those affected by the concession.
Overall, the TCO No. 0949845 streamlines the importation process for certain phenolic resin by reducing the duty burden, thereby encouraging trade and benefiting importers who can now seek duty refunds for past imports. The legislative framework ensures that the process is transparent and inclusive, with clear obligations for both applicants and the CEO, while providing a safeguard against potential disadvantages to non-Commonwealth entities.