EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813060
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.
Titan AG Pty Ltd applied for a TCO in respect of certain granular fungicides on 17 June 2008.
Instrument
TCO No 0813060 was made on 08 September 2008. It declares that those certain granular fungicides 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. 0813060 is taken to have come into force on 17 June 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 Parliament of Australia, was amended to introduce the ability to make Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods. The problem this legislation addresses is the lack of flexibility in the tariff rates for certain imported goods, particularly where no Australian-made substitutes exist. This mechanism ensures that Australian industries can remain competitive without being burdened by high customs duties on goods for which no local alternatives are produced. The Tariff Concession Instrument No. 0813060, made on 8 September 2008, exemplifies the application of this scheme, providing a zero rate of duty on certain granular fungicides as no substitutable goods were produced in Australia. The policy objective is to support Australian industries by allowing lower customs duty rates on specific goods, thereby promoting economic efficiency and fairness in trade practices.
Scope and Application
The Tariff Concession Instrument No. 0813060, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain granular fungicides, and is applicable to any person or entity that imports these goods into Australia. The geographic reach of this legislation is national, as it pertains to the application of tariffs under Commonwealth law. The instrument was made to facilitate tariff concessions for the specified goods, which are subject to a lower rate of customs duty as a result. The instrument's application is restricted to goods that do not have substitutable alternatives produced in Australia, as outlined in the Act. The Customs Act 1901 and the Customs Tariff Act 1995 form the primary legal framework, with further details and conditions potentially addressed through subordinate instruments or regulations.
Key Provisions
The Customs Act 1901 (section 269F) allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer (CEO) of Customs, which apply lower rates of customs duty to specified goods. An application for a TCO (section 269C) must meet certain criteria, including that no substitutable goods are produced in Australia in the ordinary course of business. This means that for the goods in question, there are no locally produced alternatives that can be used for the same purpose, including design purposes, as the goods for which the TCO is sought. The CEO must decide whether an application meets these criteria and, if satisfied, must issue a written order in the form of a TCO (section 269P(3)).
The obligations imposed by the Act on the parties involved primarily focus on the process of applying for and issuing a TCO. For applicants, this means ensuring that their application is made in good faith and provides all necessary information to demonstrate that the goods for which a concession is sought meet the criteria set out in the Act. For the CEO, the obligations include evaluating the application against these criteria, consulting with relevant stakeholders where appropriate, and issuing a TCO if the criteria are met. The CEO must also publish a notice in the Gazette inviting any person who might have objections to the TCO to lodge a submission (subsection 269K(1)). In the case of TCO No. 0813060, the CEO did not receive any submissions in response to the published notice.
Any failure to comply with the requirements of the Customs Act 1901 in relation to the application or issuance of a TCO could lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially result in legal actions such as fines or other civil or criminal penalties as prescribed by the relevant laws. The exact penalties would depend on the nature and severity of the breach. The TCO itself, however, does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO registration.