EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616375
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 insecticides on 30 August 2006.
Instrument
TCO No 0616375 was made on 24 November 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. 0616375 is taken to have come into force on 30 August 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 Parliament of Australia, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO). This legislative framework aims to facilitate the import of certain goods by reducing customs duty rates, thereby supporting the economic efficiency and competitiveness of businesses. Tariff Concession Instrument No. 0616375, issued under the Customs Act, was enacted to provide a zero per cent duty rate on specific insecticides, addressing the gap where no substitutable goods were produced in Australia. This instrument was introduced following an application by Imtrade Australia, and the CEO determined that the insecticides in question met the core criteria for a TCO. The application process involved publishing a notice in the Gazette to invite any interested parties to submit objections, which did not occur in this instance. The TCO came into force on the date the application was lodged, 30 August 2006, and it does not affect the rights of any person prior to its registration, ensuring that it imposes no liabilities while potentially benefiting importers through duty refunds.
Scope and Application
The Tariff Concession Instrument No. 0616375 under the Customs Act 1901 applies to the specific goods, in this case certain insecticides, that are the subject of a Tariff Concession Order (TCO). The Act provides a mechanism for the Chief Executive Officer of Customs to reduce the customs duty on particular goods, provided certain criteria are met. This legislation is applicable to any entity that imports the specified insecticides, aiming to benefit those entities by reducing their import costs. The Act operates within the Commonwealth jurisdiction, meaning it has national reach and applies across Australia. However, the Act excludes any goods specified in section 269SJ from being subject to a TCO, which typically includes goods that are produced in Australia or are substitutable by locally produced goods. The Act may also extend its application through subordinate instruments, although the primary focus here is on the primary legislation and its direct application to the insecticides in question.
Key Provisions
The Tariff Concession Order No. 0616375 under the Customs Act 1901, which was implemented on 24 November 2006, introduces a concession on customs duty for certain insecticides (section 269P). This order specifies that these insecticides will be subject to a 0% customs duty rate, whereas the general rate for such goods is 5% (section 269S). This concession applies to goods that the Chief Executive Officer of Customs (CEO) has determined are not substitutable with goods produced in Australia (section 269C, 269D, 269E, 269F).
The Act imposes certain obligations on the CEO when considering applications for Tariff Concession Orders (TCOs). According to section 269F, any person can apply for a TCO in respect of goods, and the CEO must ensure that the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is valid, the CEO must then assess whether it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)).
The Customs Act 1901 includes provisions for penalties and consequences in the event of non-compliance with the TCO regulations. While the explanatory statement does not specify particular penalties, it is reasonable to infer that breaches of the TCO conditions could lead to civil or criminal liability. This could include fines or imprisonment if the breach is considered severe enough, although the exact penalties would depend on the specific nature of the breach and applicable laws. The CEO has the authority to enforce these provisions to ensure that the terms of the TCO are adhered to, and any violations could result in legal action against the offending party.
In summary, the Tariff Concession Order No. 0616375 under the Customs Act 1901 provides a 0% customs duty rate for certain insecticides, effective from 30 August 2006. The CEO is mandated to review applications and ensure that the core criteria for TCOs are met. Non-compliance with the terms of the TCO could result in civil or criminal penalties, although the specific consequences are not detailed in the explanatory statement.