EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814823
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 dicamba herbicide on 26 June 2008.
Instrument
TCO No 0814823 was made on 12 September 2008. It declares that those certain dicamba herbicide 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. 0814823 is taken to have come into force on 26 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 Australian Parliament, established a framework for the imposition of tariffs and duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) which can reduce or eliminate customs duty on certain goods. This mechanism was introduced to address the gap in providing relief to industries that may lack local production capacity or face unfair competition from imported goods. The explanatory statement for Tariff Concession Instrument No. 0814823, made under this Act, outlines the process by which Syngenta Crop Protection Pty Limited successfully applied for a TCO for specific dicamba herbicides. The instrument was published in the Gazette, inviting objections, but none were received. The TCO was declared effective from the date of the application, 26 June 2008, and it reduced the duty on the specified herbicides from the general rate of 5% to free. The objective of this concession is to support the local agricultural sector by making essential herbicides more affordable, thereby aiding in the competitiveness and productivity of the industry.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which allow for reduced customs duties on certain goods. This provision applies to persons or entities seeking to import specific goods, provided those goods are not listed in section 269SJ of the Act, which excludes certain goods from tariff concessions. The scope of the Act encompasses all individuals and entities involved in the importation of goods within Australia, impacting the customs duties applicable to such goods. The Act applies nationally across Australia and operates under the authority of the Commonwealth. The Act does not disadvantage any existing rights of persons other than the Commonwealth and does not impose new liabilities on such persons. The TCOs are effective from the date the application is lodged, as stipulated in section 269S(1) of the Act, and in the case of TCO No. 0814823, this date is 26 June 2008. The Act allows for further specification and regulation through subordinate instruments, thereby extending its application and detail.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) include sections 269C (3), 269F, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine if the application meets the core criteria (section 269C(3)). If the CEO is satisfied that the core criteria are met, they must make a written order declaring the goods eligible for the concession (section 269P(3)). The concession applies to goods where no substitutable goods are produced in Australia in the ordinary course of business (section 269C). These provisions ensure that the CEO can effectively manage and administer the TCO scheme by evaluating applications and making orders based on specific criteria.
The Customs Act 1901 imposes several obligations on the CEO and the applicant when processing a TCO application. The CEO must ensure that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO. They must also verify that the application meets the core criteria, particularly that no substitutable goods are produced in Australia. Upon meeting these criteria, the CEO is required to make a written TCO declaring the goods eligible for the concession. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application. The applicant, on the other hand, must provide all necessary information and documentation to support their application. Both parties must adhere to these obligations to ensure a transparent and fair process.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may result in various civil and criminal consequences. While the Act does not specify maximum penalties for breaches, breaches of customs regulations can lead to substantial fines and potential imprisonment for serious offences. The CEO has the authority to enforce the Act and may take action against individuals or entities that do not comply with the provisions, including revoking a TCO if it is found that the goods no longer meet the criteria for the concession. Non-compliance may also result in financial penalties for the applicant or affected parties, impacting their rights and liabilities under the Act. These potential consequences underscore the importance of adhering to the Act’s requirements.