EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700428
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.
4 Farmers Pty Ltd applied for a TCO in respect of certain methyl diclofop on 09 January 2007.
Instrument
TCO No 0700428 was made on 23 March 2007. It declares that those certain methyl diclofop are goodsis a product 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. 0700428 is taken to have come into force on 09 January 2007.
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 was enacted by the Parliament of Australia and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was introduced to address the need for lower rates of customs duty for certain imported goods where no substitutable goods are produced in Australia, thereby promoting trade and economic efficiency. The Tariff Concession Instrument No. 0700428 was made on 23 March 2007, following an application by Farmers Pty Ltd for a TCO concerning certain methyl diclofop on 9 January 2007. The Chief Executive Officer of Customs determined that the application met the core criteria, as no substitutable goods were produced in Australia. As a result, the TCO was issued, granting free duty on these goods, which otherwise attract a general duty rate of 5%. The instrument does not disadvantage any person other than the Commonwealth and allows for the refund of duty on goods imported since the date the TCO was taken to have come into force.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are administered by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods. A TCO can be applied for by any person, provided the goods in question are not among those specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The application process requires the CEO to assess whether the goods meet the core criteria set out in section 269C, which stipulates that no substitutable goods must be produced in Australia in the ordinary course of business on the date the application was lodged. For the purposes of this assessment, sections 269D, 269E and 269F define "goods produced in Australia", "ordinary course of business", and "substitutable goods", respectively. If the CEO determines that the application meets the core criteria, a written TCO is issued, as seen in the case of TCO No. 0700428 for certain methyl diclofop, which applies a free rate of duty instead of the general 5% rate. The TCO's commencement date is the date on which the application was lodged, and it does not affect existing rights or impose new liabilities on anyone except the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0700428 under the Customs Act 1901 (section 269P(3)) declares that certain methyl diclofop are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This instrument was made on 23 March 2007, following an application by Farmers Pty Ltd on 9 January 2007. The instrument effectively grants a tariff concession, reducing the duty on these goods from a general rate of 5% to free, provided the application met the specified criteria. The instrument came into effect on the date of the application, 9 January 2007, as stipulated by section 269S(1) of the Act.
The Act imposes several obligations on the parties involved. Firstly, any person seeking a tariff concession must apply to the Chief Executive Officer (CEO) of Customs, who must then determine whether the application meets the core criteria (section 269C). The CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes the concession should not proceed (subsection 269K(1)). The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269D and section 269E). The CEO in this case did not receive any submissions opposing the concession.
Breaches of the provisions under the Customs Act 1901 can result in both civil and criminal consequences. Although the specific penalties are not detailed in the explanatory statement, the Act generally provides for hefty fines and imprisonment for non-compliance with customs regulations. The exact penalties would depend on the specific nature of the breach, but they can include fines up to a significant amount and imprisonment for a specified duration. The Act also allows for civil penalties, which can be substantial, depending on the severity and intent behind the breach.