EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136056
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.
Lyondellbasell Australia Pty Ltd applied for a TCO in respect of certain pellets on 27 October 2011.
Instrument
TCO No 1136056 was made on 16 January 2012. It declares that those certain pellets 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. 1136056 is taken to have come into force on 27 October 2011.
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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs duties and other charges on imported goods. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on certain goods. This scheme was introduced to address the need for flexibility in tariff regulations to support Australian industries and trade. The Tariff Concession Instrument No. 1136056, made on 16 January 2012, is an example of such a concession applied to specific pellets, providing a zero duty rate on these goods. The instrument came into effect on the date of application, 27 October 2011, and no submissions were received in opposition to the concession. The primary policy objective of this measure is to support domestic industries by reducing the cost of imported goods that have no local substitutes, thereby fostering a competitive environment.
Scope and Application
The Tariff Concession Instrument No. 1136056 applies to the specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). This legislation operates under Part XVA of the Customs Act 1901 and directly affects the goods specified in the TCO, in this case, certain pellets. The legislation is applicable nationally, following the Commonwealth's jurisdiction over customs duties. It is pertinent to note that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken before the TCO's effective date. The CEO's decision to grant the TCO is contingent upon meeting the core criteria as stipulated in section 269C of the Act, ensuring that no substitutable goods are produced in Australia. The TCO has a retroactive effect from the date the application was lodged, in this instance, 27 October 2011. Although the CEO is required to consult by publishing a notice in the Gazette inviting submissions, in this case, no submissions were received. The TCO's scope and application are further defined through subordinate instruments as necessary to implement the provisions of the Customs Act 1901.
Key Provisions
The main operative sections of this legislation pertain to the process and criteria for applying for and making Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C, 269B, 269D, 269E, 269P, and 269SJ). A TCO allows for a lower rate of customs duty on specified goods, provided certain conditions are met. For instance, section 269C specifies that an application for a TCO will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269SJ outlines the types of goods that are ineligible for a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes specific obligations and requirements on both applicants and the CEO. An applicant must ensure that their application is not for goods listed in section 269SJ, and that they satisfy the core criteria by demonstrating that no substitutable goods were produced in Australia on the application date. The CEO, on receiving a valid application, must make a decision based on these criteria. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties if they consider there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must then take into account any submissions received before making the final decision.
Failure to comply with the provisions of the Customs Act 1901 or the regulations could lead to various legal consequences. While the explanatory statement does not explicitly outline offences or penalties, it is implied that any breaches of the conditions set forth for applying for or making a TCO could result in legal action. The Act does not specify maximum penalties within the explanatory statement; however, breaches of customs laws generally may attract significant penalties under other sections of the Act or related legislation. The consequences can include financial penalties, seizure of goods, or legal proceedings against the offending party.