EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136082
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.
Caltex Australia Petroleum Pty Ltd applied for a TCO in respect of certain oil refinery catalyst or additive systems on 28 October 2011.
Instrument
TCO No 1136082 was made on 16 January 2012. It declares that those certain oil refinery catalyst or additive systems 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. 1136082 is taken to have come into force on 28 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, establishes a framework for the imposition of customs duties on imported goods, among other things. The Act was amended to include provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on certain goods. This was introduced to address the gap in providing relief to industries that rely on imported goods not produced domestically, thus supporting competitiveness and economic efficiency. Tariff Concession Instrument No. 1136082 was enacted to provide a tariff concession for specific oil refinery catalyst or additive systems, reducing the duty on these goods from the general rate of 5% to free, reflecting the policy objective of facilitating the import of goods not produced in Australia and thereby supporting industry needs.
Scope and Application
The Tariff Concession Instrument No. 1136082 pertains to the application of Tariff Concession Orders (TCOs) under the Customs Act 1901, specifically relating to certain oil refinery catalyst or additive systems. This Act applies to entities or individuals seeking a tariff concession for specific goods, provided these goods are not specified in section 269SJ of the Act, which excludes certain items from tariff concessions. The Act operates at the national level, administered by the Commonwealth through the Chief Executive Officer of Customs, who is responsible for deciding whether an application meets the core criteria for a TCO. The TCO No. 1136082, which came into effect on 28 October 2011, was made on 16 January 2012, and it applies to the certain oil refinery catalyst or additive systems by declaring that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a tariff rate of free instead of the general rate of 5%. The legislation does not impose any liabilities on persons other than the Commonwealth and provides the right for importers to apply for a refund of duty on goods imported since the commencement date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer (CEO) of Customs (sections 269F, 269C, and 269P). To be eligible for a TCO, the goods must not be produced in Australia in the ordinary course of business and must not be specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269SJ). If the CEO is satisfied that an application for a TCO meets the core criteria, they must make a written order declaring that the specified goods will be subject to a reduced rate of customs duty (section 269P(3)). For instance, TCO No. 1136082, made on 16 January 2012, declared that certain oil refinery catalyst or additive systems would be subject to a free rate of duty, as no substitutable goods were produced in Australia (section 269C).
The Act imposes certain obligations on applicants and the CEO. An applicant must submit an application to the CEO for a TCO in respect of goods that meet the eligibility criteria (section 269F). The CEO must ensure that the application is not for goods that fall under section 269SJ and must verify if the application meets the core criteria (section 269C). Upon satisfaction, the CEO must make a TCO and publish a notice in the Gazette, inviting any objections (subsection 269K(1)). In this instance, no objections were received. The TCO takes effect from the date the application was lodged (subsection 269S(1)).
There are no specific offences outlined within this TCO; however, any breach of the Customs Act 1901 could lead to penalties. For example, under section 211 of the Act, an offence of evading duty can incur a penalty of up to 10 years imprisonment or a fine of up to 20,000 penalty units, or both. Furthermore, making a false statement or document in connection with the Act can lead to penalties of up to 5,000 penalty units or imprisonment for up to 5 years, or both, under section 241. However, these provisions are general penalties applicable to the Customs Act as a whole and not specific to the TCO. The TCO itself does not impose any liabilities on any person, and it does not affect the rights of a person other than the Commonwealth as at the date of registration (subsection 269S(2)).