EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817919
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 applied for a TCO in respect of certain thiamethoxam insecticides on 14 July 2008.
Instrument
TCO No 0817919 was made on 03 October 2008. It declares that those certain thiamethoxam 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. 0817919 is taken to have come into force on 14 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 Customs Act 1901, enacted by the Australian Parliament, provides for the imposition of customs duty on goods entering Australia. Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specified goods. This scheme was introduced to address the problem of ensuring fair trade practices and encouraging the import of goods that are not produced domestically, thereby supporting competitive markets and consumer interests. The Tariff Concession Instrument No. 0817919, made on 3 October 2008, is an example of such an order. It was enacted in response to an application by Syngenta Crop Protection for a TCO concerning certain thiamethoxam insecticides, leading to a reduction of the duty rate from 5% to free. The CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. This order came into effect on 14 July 2008, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth, while beneficially affecting the rights of importers who may apply for a refund of duty.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek tariff concessions on specific goods by applying to the CEO. The Act is primarily concerned with the assessment and application of customs duties, specifically targeting goods that are not produced in Australia and are not listed in section 269SJ, which excludes certain goods from TCO eligibility. The geographic reach of the Act is national, operating under the Commonwealth's jurisdiction, while the application of TCOs extends to any goods subject to the Customs Tariff Act 1995. The Act allows for the expansion or restriction of its application through subordinate instruments, which define terms such as 'goods produced in Australia' and 'ordinary course of business'. Notably, the TCO No. 0817919, which was issued in response to an application by Syngenta Crop Protection for certain thiamethoxam insecticides, exemplifies how the Act operates to provide tariff concessions, in this case reducing the duty from 5% to free.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0817919 (section 269P) establish the process and criteria for making a Tariff Concession Order (TCO). Section 269F outlines the application process for a TCO, which requires an application to be made to the Chief Executive Officer of Customs (CEO). Section 269C specifies that the application meets the core criteria if no substitutable goods are produced in Australia at the time the application is lodged. Section 269P(3) mandates that if the CEO determines the application meets the core criteria, they must issue a TCO. This TCO, as illustrated by TCO No. 0817919, specifies the goods and the applicable customs duty rate under the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO regarding the assessment and issuance of TCOs. Under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. The CEO's decision-making process must be transparent and inclusive, allowing for public input before a TCO is issued.
Breaching the requirements of the Customs Act 1901 can result in various civil and criminal consequences. For example, under section 139 of the Act, an offence is created for making a false or misleading statement in an application for a TCO. The maximum penalty for such an offence is 12 months imprisonment or a fine of up to $22,200, or both. Additionally, any person who knowingly contravenes a TCO may face penalties as prescribed by the relevant regulations. These penalties serve to uphold the integrity of the TCO scheme and ensure compliance with the legislative framework.