EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001795
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.
Rockwood Pigments And Trading Pty Ltd applied for a TCO in respect of certain pigments on 11 January 2010.
Instrument
TCO No 1001795 was made on 07 April 2010. It declares that those certain pigments 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. 1001795 is taken to have come into force on 11 January 2010.
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. 1001795, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions on specific goods to ensure they are competitively priced within the Australian market, particularly when there are no substitutable goods produced domestically. This instrument was introduced by the Chief Executive Officer of Customs, who has the authority to make such orders as specified in Part XVA of the Act. The policy objective behind this concession is to facilitate the importation of goods that are not produced locally, thereby preventing any undue disadvantage to consumers and encouraging fair trade practices.
This instrument was enacted in response to an application by Rockwood Pigments And Trading Pty Ltd for a tariff concession on certain pigments, effective from 11 January 2010. The concession, declared on 7 April 2010, effectively reduces the customs duty on these pigments from 5% to free, provided that no substitutable goods are produced in Australia. The instrument does not adversely affect any rights or impose liabilities on individuals other than the Commonwealth, and it allows for duty refunds to importers for goods imported since the commencement date.
Scope and Application
The Tariff Concession Instrument No. 1001795, established under the Customs Act 1901, applies specifically to the goods for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs. This legislation pertains to entities and individuals involved in the importation of certain pigments, as exemplified by the case of Rockwood Pigments And Trading Pty Ltd. The application and subsequent approval of a TCO facilitate a reduction in customs duty on these pigments from the general rate of 5% to a concessional rate of free, provided that no substitutable goods are produced in Australia. This legislation's jurisdictional reach extends across the Commonwealth of Australia, impacting all importers of the specified pigments within this geographic scope. The Act does not impose any liabilities on persons other than the Commonwealth and ensures that the rights of importers are beneficially affected, including the potential for duty refunds on goods imported since the TCO's effective date. Subordinate instruments may further define and extend the application of this Act, thereby offering additional clarity and detail to its implementation and enforcement.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, establish a framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (section 269F). If an application for a TCO meets the core criteria, as set out in section 269C, the CEO is required to make a written order (section 269P(3)). This process applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. The application must not be for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. In the case of Tariff Concession Instrument No. 1001795, the CEO made the order on 7 April 2010, applying a free rate of duty on certain pigments, effective from 11 January 2010, the date the application was lodged.
The Act imposes several obligations on the parties involved. The CEO must assess whether an application meets the core criteria for a TCO, ensuring that the goods in question are not substitutable by Australian-made products and are not on the prohibited list (section 269SJ). Once the CEO is satisfied that the application meets these criteria, they must make a TCO and publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). This process ensures transparency and allows for public input before the order is finalised. In the instance of TCO No. 1001795, no submissions were received, allowing the order to proceed without opposition.
In terms of penalties or consequences for non-compliance, the Act does not explicitly outline specific criminal or civil penalties for breaches of TCO provisions. However, any misuse or fraudulent application for a TCO could potentially lead to legal action under general fraud or misrepresentation laws. The Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the TCO, and it does not impose any liabilities on any person in respect of actions taken before the TCO's registration date. Importers of the affected goods can benefit by applying for a refund of duty under Regulation 126(1)(r), but the Act does not specify any punitive measures for failing to comply with the TCO requirements.