EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0830750
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.
Agnova Technologies Pty Ltd applied for a TCO in respect of certain agricultural herbicide on 09 September 2008.
Instrument
TCO No 0830750 was made on 28 November 2008. It declares that those certain agricultural 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. 0830750 is taken to have come into force on 09 September 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 was enacted by the Commonwealth Parliament to regulate customs and excise matters, providing the legal framework for the administration of customs and excise duties. One of the Act's mechanisms is the Tariff Concession Orders (TCO) scheme, which allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on specific goods under certain conditions. The problem or gap that this scheme addresses is the potential economic disadvantage faced by Australian businesses when they cannot source goods domestically and must import them, thereby incurring higher customs duties. By allowing the concession of tariffs on goods that are not produced in Australia or for which no suitable domestic substitutes exist, the Act aims to promote fair competition and economic efficiency within the Australian market. The policy objective is to support domestic industries by facilitating the importation of goods that are not produced locally, thereby enhancing economic growth and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0830750 under the Customs Act 1901 applies to an entity, specifically Agnova Technologies Pty Ltd, which applied for tariff concessions on certain agricultural herbicides on 09 September 2008. The Act allows for the reduction of customs duty on goods specified in a Tariff Concession Order (TCO) provided that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. The CEO of Customs, upon being satisfied that the application meets the core criteria, must make a written order that declares the goods to which the prescribed tariff concession applies. This particular TCO, made on 28 November 2008, pertains to item 50 of Schedule 4 of the Customs Tariff Act 1995, setting the duty rate for these herbicides to free from the general rate of 5%. The TCO's application is confined to the Commonwealth and does not disadvantage any other person by imposing liabilities for actions taken before its registration date. It is effective from the date the application was lodged, 09 September 2008, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0830750 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) detail the process for making a Tariff Concession Order (TCO) and its effects. Section 269C establishes that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied with the application, they must make a written order declaring the goods to which the concession applies. Section 269S specifies that the TCO comes into force on the day the application was lodged. This means that for TCO No. 0830750, the concession for the specified agricultural herbicides became effective from 9 September 2008.
The obligations imposed by the Act on parties applying for a TCO are clear and straightforward. An applicant, such as Agnova Technologies Pty Ltd, must ensure their application is not for goods specified in section 269SJ of the Act, which are ineligible for a TCO. Furthermore, the applicant must provide sufficient evidence to demonstrate that no substitutable goods were produced in Australia, as required by section 269C. Once the CEO accepts the application as valid, they must publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections. In this case, no objections were received, leading to the issuance of the TCO.
The Act outlines specific consequences for breaches related to TCOs. While the Explanatory Statement does not detail specific offences under the Customs Act 1901, general provisions within the Act suggest that fraudulent applications or misrepresentations could lead to civil or criminal penalties. These penalties could include fines and imprisonment, depending on the severity of the breach. The precise penalties would be determined in accordance with the broader provisions of the Customs Act 1901 and related regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that no party is disadvantaged by the order in relation to actions taken before its registration.