EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702047
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 Ltd applied for a TCO in respect of certain herbicides on 13 February 2007.
Instrument
TCO No 0702047 was made on 04 May 2007. It declares that those certain herbicides 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. 0702047 is taken to have come into force on 13 February 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, as amended by Tariff Concession Instrument No. 0702047 enacted in 2007, addresses the need for a streamlined process to reduce customs duties on specific imported goods that do not have Australian-made substitutes. This legislative instrument allows for the application of lower customs duty rates on certain goods, provided that no substitutable goods are produced in Australia. The instrument was introduced to ensure that Australian businesses and consumers benefit from reduced costs without compromising the availability of essential goods. The process is overseen by the Chief Executive Officer of Customs, who evaluates applications against the criteria set out in the Act, ensuring that the concession does not disadvantage existing producers or impose new liabilities on individuals or entities. The policy objective is to support Australian industries by facilitating the import of goods that are not locally produced, thereby encouraging competition and providing cost savings to consumers.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the rate of customs duty on specific goods. The Act applies to any person or entity that seeks to import goods that are subject to a TCO, aiming to benefit those who import goods by reducing their duty obligations. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia, thereby affecting various industries involved in importing and trading goods. However, the Act excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The application process involves an assessment by the CEO to determine if the goods meet the core criteria, specifically if no substitutable goods are produced in Australia. The application for a TCO by Nufarm Australia Ltd in respect of certain herbicides was approved, resulting in a TCO that exempts these herbicides from the general duty rate of 5%, making them duty-free. The TCO does not disadvantage any person other than the Commonwealth and does not impose new liabilities on any person.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0702047 (Section 269P(3)) revolve around the making of a Tariff Concession Order (TCO) which specifies that certain herbicides are subject to a reduced rate of customs duty. If the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia, the CEO is required to issue a written order granting the tariff concession, as per section 269F of the Customs Act 1901. This means that, as of the date the application was lodged, these herbicides will now be subject to a duty-free rate, which contrasts with the general rate of 5% applied to these goods under item 50 of Schedule 4 to the Customs Tariff Act 1995.
Entities or individuals who seek a tariff concession must comply with the application process outlined in section 269F of the Customs Act 1901. This involves submitting an application to the CEO and meeting the core criteria as specified in sections 269B and 269C. Specifically, the application must demonstrate that no substitutable goods are produced in Australia, where 'substitutable goods' are defined by section 269D, and 'ordinary course of business' is defined by section 269E. The CEO must also publish a notice in the Gazette inviting submissions on the application, in line with subsection 269K(1) of the Act. If the CEO receives no objections, they are mandated to proceed with the issuance of the TCO, as seen in TCO No. 0702047.
In terms of penalties or consequences for non-compliance, the Act does not explicitly state penalties for failing to meet the requirements of a TCO application. However, the Customs Act 1901 and associated regulations contain provisions for penalties and enforcement actions in cases of broader customs non-compliance. These may include fines, imprisonment, or other civil and criminal penalties as deemed appropriate by the court. The specific penalties for breach of customs regulations would be determined based on the nature and severity of the non-compliance, as outlined in the applicable sections of the Customs Act and associated regulations.