EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803406
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.
Syngenta Crop Protection Pty Limited applied for a TCO in respect of certain herbicide on 29 February 2008.
Instrument
TCO No 0803406 was made on 16 May 2008. 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. 0803406 is taken to have come into force on 29 February 2008.
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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act aims to provide a streamlined process for reducing customs duty rates on specific goods, thereby facilitating trade and enhancing economic efficiency. Specifically, the Customs Act 1901 addresses the problem of ensuring that Australian businesses can compete effectively by not imposing customs duties on goods that are not produced domestically and for which there is no suitable substitute available in Australia. The policy objective behind this legislation is to encourage trade by reducing the cost burden on businesses that import certain goods, thereby supporting the broader economic interests of the nation.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs), which lower the rate of customs duty on specified goods. Applications for TCOs can be made by any person, but the CEO must ensure that the goods in question are not prohibited under section 269SJ and that they meet the core criteria outlined in section 269C. A TCO application is deemed to meet these criteria if, on the date of application, no substitutable goods are being produced in Australia in the ordinary course of business. Once a TCO is made, it applies to the goods specified from the date the application was lodged, benefiting importers by allowing them to claim refunds for duty paid on those goods since that date. The TCO does not affect any rights or impose liabilities on persons in respect of actions taken prior to its registration. The geographic scope of the Act is national, with the TCO extending to all states and territories within Australia. Subordinate instruments may further specify the application and administration of TCOs.
Key Provisions
The Customs Act 1901, as amended, provides a framework under which Tariff Concession Orders (TCOs) can be made, with section 269F (1) allowing for applications to the Chief Executive Officer of Customs (CEO) for such concessions. If an applicant, such as Syngenta Crop Protection Pty Limited, submits an application for a TCO, the CEO must assess whether it meets the core criteria outlined in sections 269C and 269P. For instance, under section 269C, the CEO must determine if, on the date the application was made, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO finds that the application meets these criteria, as was the case with TCO No. 0803406, they are required under section 269P(3) to issue a written order declaring that the specified goods are subject to a prescribed tariff concession.
The obligations imposed on the parties governed by this Act include the requirement for applicants to provide sufficient information to demonstrate that the goods in question are not substitutable by Australian-produced goods. The CEO, on their part, must publish a notice in the Gazette inviting submissions from interested parties, as mandated by section 269K(1), although in this instance, no submissions were received. The TCO itself, as per section 269S(1), comes into effect on the day the application is lodged, meaning that Syngenta Crop Protection Pty Limited’s application, dated 29 February 2008, triggered the concession effective from that date.
Breaching the provisions of the Customs Act 1901 can result in various legal consequences. For instance, if a person knowingly makes a false or misleading statement in an application for a TCO, they may be subject to civil or criminal penalties. Under section 269ZC, penalties can include fines of up to 10,000 penalty units or imprisonment for up to five years, or both. These provisions ensure that the integrity of the tariff concession scheme is maintained and that only eligible goods are granted concessions. The Act also provides for the rights of importers to be protected, allowing them to apply for duty refunds on goods imported since the TCO came into effect, without incurring any new liabilities as a result of the concession.