EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814023
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 Ltd applied for a TCO in respect of certain plant activator on 23 June 2008.
Instrument
TCO No 0814023 was made on 08 September 2008. It declares that those certain plant activator 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. 0814023 is taken to have come into force on 23 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 was enacted by the Parliament of Australia to facilitate the regulation of imports and exports through the imposition of customs duties and the administration of related processes. The Act was introduced to address the need for a structured and efficient system for managing customs duties and ensuring the proper collection of revenue. One of the mechanisms established under this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which provide for reduced rates of customs duty on certain goods. This legislative framework allows for the application of lower duty rates where specific criteria are met, promoting fairness and competitiveness in the market. The Tariff Concession Instrument No. 0814023, issued in 2008, exemplifies this process by providing a tariff concession for certain plant activators, aligning with the policy objective of reducing the duty on goods where no substitutable goods are produced in Australia, thereby benefiting importers and supporting trade.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This act applies to any person or entity seeking a lower rate of customs duty for certain goods through the application process. The scope of the Act encompasses the examination and approval of these applications, ensuring that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by the Act. The geographic reach of this legislation is national, operating within the framework of Australian customs law. TCOs do not affect any pre-existing rights of individuals or entities except for the Commonwealth, nor do they impose any liabilities for actions taken prior to the issuance of the order. The process of issuing a TCO includes publishing a notice in the Gazette to invite any objections to the concession before it is finalised. The application for a TCO is deemed to come into effect on the day it is lodged, although the actual order is issued on a separate date, as evidenced by TCO No. 0814023, which was made on 8 September 2008, following an application by Syngenta Crop Protection Pty Ltd on 23 June 2008. The legislation also provides a mechanism for importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0814023 under the Customs Act 1901, focus on the conditions and process for making a Tariff Concession Order (TCO). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, while section 269C outlines the core criteria that must be met for the CEO to consider an application. Specifically, section 269C stipulates that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Once the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order (a TCO) declaring that the goods in question are subject to a prescribed rate of customs duty.
The Act imposes several obligations and requirements on the parties involved in the TCO process. For the applicant, the primary requirement is to ensure their application meets the core criteria specified in section 269C. This includes demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. For the CEO, the obligations include accepting valid applications, making a decision on whether the application meets the core criteria, and publishing a notice in the Gazette inviting submissions from interested parties. The CEO must also consider any submissions received and make a written order if the application meets the criteria.
In terms of penalties and consequences, the Act does not explicitly state penalties for non-compliance with the TCO process itself. However, the Act does outline potential consequences for breaches of related provisions. For instance, providing false or misleading information in an application could lead to criminal penalties under section 271 of the Customs Act 1901, which prohibits fraudulent behaviour in customs matters. The maximum penalty for such offences can include substantial fines or imprisonment, or both, depending on the severity of the offence. Additionally, any failure to comply with the terms of the TCO once it is granted could result in the imposition of customs duties at the applicable rate, which could include retrospective duty payments and interest for any goods imported during the period the TCO was in effect but improperly claimed as tariff-free.