EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605852
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.
Imtrade Australia applied for a TCO in respect of certain herbicide on 29 March 2006.
Instrument
TCO No 0605852 was made on 9 June 2006. It declares that those certain herbicide 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. 0605852 is taken to have come into force on 29 March 2006.
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, establishes a framework for tariff concessions that can be applied to certain goods. The Act aims to facilitate trade by allowing the Chief Executive Officer of Customs to reduce customs duty on goods not produced domestically, thereby encouraging import and competition within the market. This legislative measure was introduced to address the need for economic incentives to import goods that are not locally manufactured, ensuring a more competitive marketplace and potentially lowering consumer prices. The policy objective is to support economic efficiency and consumer welfare by reducing the cost of imported goods that have no local alternatives. The explanatory statement for Tariff Concession Instrument No. 0605852 illustrates this process, detailing how the CEO assessed and approved an application for tariff concessions on specific herbicides, resulting in a duty-free rate for these goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods into Australia and may benefit from a reduced rate of customs duty under a TCO. The application process is contingent upon the goods not being substitutable by any goods produced in Australia, as defined by sections 269D, 269E, and 269F of the Act. The geographical scope of this Act is national, applying throughout all jurisdictions in Australia. There are specific exclusions, notably outlined in section 269SJ, which lists goods that cannot be subject to a TCO. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule of duty rates. The issuance of a TCO, such as Tariff Concession Instrument No. 0605852 for certain herbicides, follows the procedure stipulated in the Act, ensuring that the application is published in the Gazette and inviting public submissions, which in this case, did not occur. The TCO is effective from the date of the application, thereby offering immediate benefit to importers while safeguarding their rights and imposing no new liabilities.
Key Provisions
The Tariff Concession Order (TCO) No. 0605852 made under the Customs Act 1901 (the Act) provides a tariff concession on certain herbicides. Section 269F (1) of the Act allows a person to apply for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C), the CEO must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties include the requirement for the CEO to assess whether the application for a TCO meets the core criteria. Specifically, the CEO must verify that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO is mandated to publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). Should the CEO not receive any submissions, the TCO can proceed. The TCO itself does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that would disadvantage that person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration. Instead, it beneficially affects the rights of importers who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
In terms of potential offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly detail specific offences, penalties, or consequences related to the failure to comply with the provisions of a TCO. However, any breaches of the Customs Act 1901 in general, such as the provision of false or misleading information in an application or the importation of goods in breach of tariff provisions, could result in civil or criminal penalties. The severity of these penalties would depend on the nature and extent of the breach. Under the Act, penalties for breaches can include fines and, in some cases, imprisonment. However, for the specific case of TCO No. 0605852, no specific penalties are outlined in the explanatory statement.