EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606997
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.
Dow AgroSciences Australia Ltd applied for a TCO in respect of certain insecticides on 18 April 2006.
Instrument
TCO No 0606997 was made on 7 July 2006. It declares that those certain insecticides 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 0%.
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. 0606997 is taken to have come into force on 18 April 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 Tariff Concession Instrument No. 0606997 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods that are not produced domestically. This instrument was introduced to provide relief to importers and to encourage the import of goods that cannot be produced in Australia, thereby fostering economic efficiency and consumer choice. The instrument was issued by the Chief Executive Officer of Customs, following an application by Dow AgroSciences Australia Ltd for tariff concessions on specific insecticides. The objective of this legislation is to provide a 0% duty rate on these insecticides, as opposed to the general 5% duty, by declaring them as goods subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. The instrument came into effect on the date the application was lodged, 18 April 2006, and provides benefits to importers by allowing them to apply for a refund of duties paid on these goods since that date.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, facilitates the reduction or exemption of customs duty on certain goods under specific conditions. This Act applies to any person or entity seeking a tariff concession for goods that are not substitutable by Australian-made products, and the application process is overseen by the Chief Executive Officer of Customs (CEO). The legislation’s jurisdictional reach is national, applying across the Commonwealth of Australia. Notably, the Act excludes goods specified in section 269SJ, which are ineligible for tariff concessions, and it mandates that no substitutable goods are produced in Australia in the ordinary course of business for a concession to be granted. The application of this Act may be further defined or restricted through subordinate instruments, but these are not detailed in the explanatory statement. In this instance, TCO No. 0606997, issued on 7 July 2006, reduced the duty on certain insecticides from 5% to 0%, effective from the date the application was lodged, 18 April 2006, without imposing any new liabilities or affecting pre-existing rights.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0606997 under the Customs Act 1901, pertain to the application and granting of Tariff Concession Orders (TCOs) for certain goods. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. Section 269C establishes that a TCO application meets core criteria if no substitutable goods are produced in Australia on the day the application is lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order, as per section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must accept a valid application for a TCO and determine if it meets the core criteria outlined in section 269C. If satisfied, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties within a reasonable timeframe. Additionally, the CEO must ensure that the TCO does not affect the rights of persons (other than the Commonwealth) adversely as at the date of registration, and must not impose any liabilities on a person in respect of anything done or omitted before the registration date.
Under this legislation, there are no explicit offences or penalties mentioned for breaches of the Act or the TCO. However, the implications of not adhering to the requirements or obligations could lead to legal challenges or disputes, particularly if rights are adversely affected or liabilities imposed contrary to the Act's provisions. It is important to note that while the explanatory statement does not detail specific penalties, the general principles of administrative law and the Customs Act could apply in cases of non-compliance, potentially leading to judicial review or other legal consequences.