EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601592
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.
Nufarm Australia Pty Ltd applied for a TCO in respect of certain sulphur dioxide generating bags on 29 December 2005.
Instrument
TCO No 0601592 was made on 24 March 2006. It declares that those certain sulphur dioxide generating bags 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. 0601592 is taken to have come into force on 29 December 2005.
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. 0601592, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, thereby facilitating more efficient and cost-effective importation processes. This legislation was introduced to assist businesses by reducing customs duty rates for goods that meet certain criteria, specifically those that are not produced in Australia and have no substitutable goods available locally. The instrument was issued by the Chief Executive Officer of Customs, following a valid application by Nufarm Australia Pty Ltd for tariff concessions on certain sulphur dioxide generating bags. The primary objective, as outlined in the Act, is to ensure that tariff concessions are granted where appropriate, thereby supporting trade and economic activities without imposing additional burdens on businesses or individuals.
Scope and Application
The Tariff Concession Instrument No. 0601592 applies to specific sulphur dioxide generating bags, providing a concession on customs duty under the Customs Act 1901. This concession applies to goods that are not substitutable by products manufactured in Australia, as outlined under section 269C of the Act. The instrument extends to the Commonwealth jurisdiction, and it specifically caters to the application submitted by Nufarm Australia Pty Ltd. The application was accepted under the condition that no substitutable goods were produced domestically at the time of the application, leading to a tariff rate of free instead of the general 5% rate. The instrument does not affect any pre-existing rights of parties other than the Commonwealth and does not impose any liabilities. The instrument came into force on 29 December 2005, the date on which the application was lodged, and importers of the specified goods can apply for duty refunds from this date under the Customs Act.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0601592 (F2006L00952) under the Customs Act 1901 focus on the application process and the criteria for approving Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). Section 269F allows for an application to the Chief Executive Officer of Customs (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, and that the application meets the core criteria set out in section 269C, the CEO is required to make a written order (section 269P(3)). This written order is a TCO, which declares that the goods subject to the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, certain sulphur dioxide generating bags are subject to a TCO, which sets their duty rate to free instead of the general rate of 5%.
The obligations imposed on the parties under this legislation include the requirement for an applicant to meet the core criteria before a TCO can be granted. Specifically, the applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). The CEO is obliged to make a written order if the application meets these criteria. Additionally, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO must then consider any submissions received and decide whether to proceed with the TCO. In this instance, no submissions were received.
Breach of the obligations and requirements set out in the Customs Act 1901 can lead to various civil and criminal consequences. Under section 146 of the Act, an offence is created for any person who contravenes any provision of the Act, including the making of a false statement in an application for a TCO. Such an offence can result in a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for an individual. For a body corporate, the maximum penalty is up to 50,000 penalty units. Additionally, under section 147 of the Act, any person who contravenes any provision of the Act can be liable for any resulting loss or damage suffered by any other person, including the Commonwealth. Failure to comply with the statutory requirements for TCOs may also lead to the nullification of the concession, resulting in the application of the standard tariff rates to the goods in question.