EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818095
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 clodinafop and cloquintocet herbicides on 14 July 2008.
Instrument
TCO No 0818095 was made on 03 October 2008. It declares that those certain clodinafop and cloquintocet herbicides 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. 0818095 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 Parliament of Australia, includes provisions for Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on specified goods. This legislative framework was introduced to address the need for a mechanism that allows for tariff reductions on goods that meet certain criteria, particularly those that are not produced domestically or for which there are no suitable domestic substitutes. Syngenta Crop Protection's application for a TCO for certain clodinafop and cloquintocet herbicides, approved under Instrument TCO No. 0818095, exemplifies the application of this scheme. The Chief Executive Officer of Customs determined that these herbicides qualified for tariff concessions as they are not produced in Australia and have no domestic substitutes, thereby setting the duty rate at free instead of the general rate of 5%. The instrument's policy objective is to facilitate the import of goods that are essential for Australia's economy but not manufactured locally, ensuring that Australian consumers and businesses have access to necessary products at reduced costs.
Scope and Application
The Tariff Concession Instrument No. 0818095, as stipulated under Part XVA of the Customs Act 1901, applies to applications for Tariff Concession Orders (TCOs) submitted to the Chief Executive Officer of Customs (CEO). This Act facilitates the granting of lower customs duty rates for specified goods, provided they meet certain criteria and do not fall within the exclusions outlined in section 269SJ. The application process involves determining whether no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets the core criteria, a TCO is issued, applying a prescribed rate from Schedule 4 of the Customs Tariff Act 1995. The instrument specifically affects the customs duty rates for certain clodinafop and cloquintocet herbicides, reducing the general rate of duty from 5% to free of charge. The legislation ensures that rights and liabilities of parties other than the Commonwealth are not adversely affected by the TCO, and importers of the specified goods may apply for duty refunds under the Customs Act Regulations. The geographic reach of this Act is national, applying across Australia and governed by Commonwealth law.
Key Provisions
The main operative sections of this legislation, particularly section 269C and 269P(3) of the Customs Act 1901, establish the criteria for determining whether a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (the CEO). Specifically, section 269C requires that for a TCO to be made, it must be established that no substitutable goods are being produced in Australia in the ordinary course of business on the day the application for the TCO is lodged. Section 269P(3) then mandates that if the CEO is satisfied with the application meeting these core criteria, they must issue a written TCO. In this case, Tariff Concession Order No. 0818095 was issued for certain clodinafop and cloquintocet herbicides on 3 October 2008, applying item 50 of Schedule 4 to the Customs Tariff Act 1995 and granting a free rate of duty.
The Act imposes several obligations and requirements on parties involved. Firstly, the CEO must ensure that a TCO application meets the core criteria as specified in section 269C, which involves verifying that no substitutable goods are being produced in Australia. Once the CEO is satisfied with the application, they must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as stipulated in subsection 269K(1). Additionally, the CEO must consider any submissions received and decide whether to issue the TCO. In this instance, no submissions were received in response to the notice published, leading to the issuance of TCO No. 0818095.
Breaching the requirements or obligations set out in the Act can result in various penalties and consequences. While the specific offences and penalties are not detailed in this legislation, general provisions within the Customs Act 1901 and associated regulations may apply. For instance, failure to comply with the conditions of a TCO could result in civil penalties, such as fines or repayment of duties, and potentially criminal penalties if the breach is deliberate or fraudulent. The exact penalties would depend on the specific breach and the relevant provisions of the Customs Act and other applicable laws.