EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817141
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.
Du Pont Ltd applied for a TCO in respect of certain chlorantraniliprole insecticides on 11 July 2008.
Instrument
TCO No 0817141 was made on 26 September 2008. It declares that those certain chlorantraniliprole insecticides 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. 0817141 is taken to have come into force on 11 July 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 Tariff Concession Instrument No. 0817141, enacted in 2008, is an instrument under the Customs Act 1901 aimed at providing tariff concessions for specific goods, thereby addressing the need for reducing customs duties for certain imported goods that are not produced domestically. This instrument was introduced by the Chief Executive Officer of Customs, acting under the authority provided by section 269F of the Act, to facilitate tariff reductions for goods where no substitutable Australian-made products exist. The policy objective of this instrument is to ensure that the importation of certain goods, in this case, chlorantraniliprole insecticides, can benefit from reduced customs duties, thereby encouraging the use of imported products where local production is not feasible or does not exist. The enactment body, the Parliament of Australia, established this process to streamline the application and approval of tariff concessions, ensuring that eligible goods can enter the market under more favourable financial conditions.
Scope and Application
The Tariff Concession Instrument No. 0817141 under the Customs Act 1901 applies to specific goods, namely certain chlorantraniliprole insecticides, which were the subject of an application by Du Pont Ltd. The Act allows the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that provides a lower rate of customs duty on these goods if certain criteria are met. The TCO is applicable from the date the application was lodged, 11 July 2008, and no submissions were received in opposition to the TCO application. The TCO benefits importers by allowing them to apply for a refund of duty on goods imported from this effective date. Importantly, the TCO does not affect the rights of any person as at the date of registration nor impose any liabilities on any person for actions taken prior to the registration of the TCO. The Act's application extends to any goods for which a valid TCO application is made, provided the goods do not fall under the exclusions specified in section 269SJ of the Customs Act 1901, and the core criteria in section 269C are satisfied.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCO) and their application under the Customs Act 1901 (section 269F). A TCO is an order made by the Chief Executive Officer (CEO) of Customs that reduces the customs duty on certain goods. For a TCO to be granted, the applicant must demonstrate that the goods in question are not produced in Australia and that there are no substitutable goods produced domestically (sections 269C and 269P). If the CEO is satisfied with the application, they must make a written order granting the tariff concession (section 269P(3)).
The obligations imposed by the Customs Act 1901 on parties and entities include the requirement for an applicant to apply for a TCO in accordance with section 269F. The CEO, in turn, is obligated to assess whether the application meets the core criteria (section 269C) and, if satisfied, to make the TCO (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties on the proposed TCO (subsection 269K(1)). This ensures transparency and provides an opportunity for stakeholders to voice any objections or concerns before the TCO is made.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences or penalties for failing to comply with the requirements of a TCO. However, any misuse of the tariff concession or fraudulent claims for tariff benefits could potentially lead to criminal or civil liabilities under other sections of the Customs Act, or related legislation such as the Crimes Act 1914. These could include penalties for fraud, false statements, or other related offences, which may result in significant fines or imprisonment depending on the severity of the breach.