EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818097
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 growth regulators on 14 July 2008.
Instrument
TCO No 0818097 was made on 03 October 2008. It declares that those certain growth regulators 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. 0818097 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, as amended, provides a framework for the application and administration of customs duties in Australia, including the process for Tariff Concession Orders (TCOs). Enacted by the Australian Parliament, the Act aims to facilitate international trade by providing a mechanism through which businesses can apply for tariff concessions on certain goods. This process was designed to address the gap in duty-free or reduced-duty imports where there is no domestic production of substitutable goods, thus encouraging competition and reducing costs for businesses. The Tariff Concession Instrument No. 0818097, issued in 2008, exemplifies this process by granting a tariff concession to Syngenta Crop Protection for certain growth regulators, following an application and subsequent determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia at the time of the application. The policy objective is to support Australian businesses by lowering the cost of imported goods where there is no local production of equivalent products.
Scope and Application
The Tariff Concession Instrument No. 0818097, made under the Customs Act 1901, applies to the process of granting tariff concessions on certain growth regulators, specifically those for which Syngenta Crop Protection applied on 14 July 2008. This Act is applicable at the Commonwealth level and targets the entities involved in the import and production of these specific goods. The application of this Act is triggered when an entity such as Syngenta Crop Protection applies for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs, who is mandated to assess whether the application meets the core criteria. Notably, the Act excludes certain goods specified in section 269SJ of the Customs Act, which cannot be subject to a TCO. The application of the Act is further governed by the conditions outlined in sections 269C, 269D, 269E, and 269P of the Act, which define the terms and criteria for the production and substitution of goods in Australia. This TCO came into force on the date the application was lodged, 14 July 2008, and does not disadvantage any person or impose liabilities on anyone in relation to actions taken before the date of registration.
Key Provisions
The key operative sections of this legislation (sections 269C, 269F, 269K(1), 269P(3), and 269S) require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCOs) for specific goods, provided these goods are not listed in section 269SJ of the Customs Act 1901. If the application meets the core criteria outlined in section 269C, which stipulates that no substitutable goods are produced in Australia, the CEO must make a written order declaring the goods subject to the TCO (section 269P(3)). This declaration results in the application of a lower rate of customs duty to these goods. Syngenta Crop Protection's application for a TCO on certain growth regulators, declared under item 50 of Schedule 4 to the Tariff, was accepted because the CEO found no substitutable goods were produced in Australia, thus the duty rate was set at free (section 269S(1)).
The Customs Act 1901 imposes certain obligations on the parties involved in the TCO process. The CEO must ensure that applications for TCOs are assessed against the core criteria and that the goods are not listed in section 269SJ, which prohibits certain goods from being subject to a TCO. Additionally, as soon as a TCO application is accepted, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons (section 269K(1)). In this case, no submissions were received in response to the published notice.
Breaching the provisions of the Customs Act 1901 related to TCOs could result in civil or criminal consequences. Although the explanatory statement does not explicitly outline penalties, the general legal framework in Australia suggests that non-compliance could lead to fines or imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific nature of the breach and the relevant provisions of the Customs Act 1901 and associated regulations. Importantly, the TCO does not affect the rights of any person as at the date of registration, ensuring that no existing rights are disadvantaged or new liabilities imposed on any person (other than the Commonwealth) in respect of actions taken before the TCO's effective date.