EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1034360
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.
Anzchem Pty Ltd applied for a TCO in respect of certain strontium acetate on 27 July 2010.
Instrument
TCO No 1034360 was made on 18 October 2010. It declares that those certain strontium acetate 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. 1034360 is taken to have come into force on 27 July 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. 1034360, enacted in 2010 under the Customs Act 1901, was introduced to address the need for tariff concessions for specific imported goods. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on goods that meet certain criteria, specifically those that are not substitutable by goods produced in Australia. This legislative instrument aims to support Australian importers by reducing the cost of imported goods, thereby promoting fair trade and economic efficiency. The instrument was developed in response to an application by Anzchem Pty Ltd for a TCO concerning certain strontium acetate, which was granted as no substitutable goods were produced in Australia. This measure ensures that the rights of importers are beneficially affected, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901 applies to all entities and individuals involved in the importation and exportation of goods in Australia, including those seeking tariff concessions. This Act provides a framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to lower the rate of customs duty on specified goods. Specifically, the Act allows for the consideration of TCO applications for goods not produced in Australia, provided they meet certain core criteria. The application process involves scrutiny to ensure that no substitutable goods are produced domestically, which is essential for determining eligibility for the tariff concession. The geographic reach of this legislation is national, as it operates under the Commonwealth framework and applies uniformly across Australia. Exclusions from this concession are explicitly stated in section 269SJ of the Act, detailing goods that are ineligible for TCOs. The application and effect of the TCO are also governed by subordinate instruments, which may extend or restrict its application based on specific conditions and criteria outlined in the Act and associated regulations.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1034360 under the Customs Act 1901 (section 269F) provide the framework for the application and approval of Tariff Concession Orders (TCOs). An applicant, such as Anzchem Pty Ltd, can apply for a TCO in respect of specific goods by submitting an application to the Chief Executive Officer (CEO) of Customs (section 269F). The CEO is mandated to assess whether the application complies with the core criteria specified in section 269C. This requires verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (section 269P(3)). In the case of Anzchem Pty Ltd's application for certain strontium acetate, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 1034360 on 18 October 2010. This TCO specifies that the certain strontium acetate is subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The obligations and requirements imposed by the Act on parties and entities governed by it include the duty of the CEO to carefully evaluate TCO applications to ensure they meet the core criteria outlined in section 269C. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons the TCO should not be made to submit their views (subsection 269K(1)). In the case of TCO No. 1034360, no submissions were received, indicating no objections were raised. Furthermore, TCOs must be registered, and they do not affect the rights of any person as at the date of registration, except to the benefit of importers who can apply for a refund of duty on goods imported since the TCO came into force.
The Act also specifies offences, penalties, and consequences for breaches. While the explanatory statement does not detail specific penalties for failing to comply with the TCO provisions, it is clear that any breaches of the Customs Act 1901 or associated regulations could result in civil or criminal penalties. These could include fines or imprisonment, depending on the severity and nature of the breach. For instance, under the Customs Act, penalties for fraudulent conduct related to customs duties can be severe, with potential fines and imprisonment terms detailed in the relevant sections of the Act and associated regulations.