EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412875
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.
Bio-Lab Australia Pty Ltd applied for a TCO in respect of certain microbiocides on 30 November 2004.
Instrument
TCO No 0412875 was made on 4 February 2005. It declares that those certain microbiocides 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 3%.
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. 0412875 is taken to have come into force on 30 November 2004.
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 Australian Parliament, provides a framework for the regulation of customs and excise duties. The Act was updated to include the provision for Tariff Concession Orders (TCOs) to address the problem of ensuring that Australian businesses can compete fairly in the global market by reducing the cost of imported goods that are not produced domestically. The Tariff Concession Instrument No. 0412875, issued in 2005, exemplifies the application of this legislative scheme. The instrument was introduced following an application by Bio-Lab Australia Pty Ltd for a tariff concession on certain microbiocides, which are now subject to a reduced customs duty rate of 3% instead of the general rate of 5%. This reduction aims to support the import of these goods, which are not produced in Australia, thereby promoting competitive pricing and market access for Australian businesses and consumers.
Scope and Application
The Tariff Concession Instrument No. 0412875, made under the Customs Act 1901, applies to specific microbiocides that were the subject of an application by Bio-Lab Australia Pty Ltd. The Act allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO) when certain criteria are met, namely, if no substitutable goods are produced in Australia in the ordinary course of business. This particular TCO applies to the goods specified in the application, which in this case are certain microbiocides, and reduces the rate of customs duty on these goods from the general rate of 5% to 3%. The Act is a Commonwealth law, thus it has a national jurisdictional reach, impacting entities and individuals involved in the importation of these goods across Australia. There are no exclusions or exemptions noted for this specific TCO, and its application is not restricted or extended through subordinate instruments. The rights of parties other than the Commonwealth are preserved, and the TCO does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0412875, made under section 269C of the Customs Act 1901, establishes a concessional tariff rate for certain microbiocides, specifically those listed under item 50 of Schedule 4 to the Customs Tariff Act 1995. According to section 269P(3), the Chief Executive Officer of Customs (CEO) must issue a written order (Tariff Concession Order or TCO) if satisfied that the application for the concession meets the core criteria. These criteria are defined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
Entities and individuals governed by this Act, such as Bio-Lab Australia Pty Ltd in this case, must comply with the provisions by ensuring that their applications for TCOs are valid and meet the specified criteria. The CEO's obligation under section 269K(1) is to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO. In this instance, the CEO did not receive any submissions, facilitating the issuance of TCO No. 0412875 on 4 February 2005.
The Act also imposes certain procedural obligations on the CEO. For instance, under subsection 269S(1), the TCO is deemed to have come into force on the date the application was lodged, which in this case is 30 November 2004. This means that the rights of parties, such as importers, are protected as at the date of registration, ensuring that they are not disadvantaged or subjected to new liabilities for actions taken prior to the registration date. Importers of the microbiocides can also benefit by applying for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.
In terms of penalties and consequences, the Act does not specify any criminal or civil penalties for breaches of the TCO provisions. However, non-compliance with the conditions set forth in the TCO or failure to adhere to the established procedures could lead to the invalidation of the TCO or other administrative actions. Additionally, any misuse or fraudulent claims related to the TCO could attract penalties under other relevant legislation, although these are not explicitly detailed in the Act itself.