EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836839
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.
United Phosphorous Ltd applied for a TCO in respect of certain methyl sulfanilycarbamate herbicides on 24 October 2008.
Instrument
TCO No 0836839 was made on 16 January 2009. It declares that those certain methyl sulfanilycarbamate 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. 0836839 is taken to have come into force on 24 October 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. 0836839, enacted in 2009, amends the Customs Act 1901 by reducing the customs duty on certain methyl sulfanilycarbamate herbicides to zero. This instrument was introduced to address the issue of ensuring competitive pricing and availability of essential goods by providing tariff concessions where no suitable Australian-made alternatives exist. The instrument was made by the Chief Executive Officer of Customs following an application by United Phosphorous Ltd, and it aligns with the policy objective of facilitating access to affordable goods through targeted tariff reductions. The Tariff Concession Order was published in the Gazette with an invitation for submissions, none of which were received, thereby allowing the concession to proceed without opposition. The concession effectively benefits importers by potentially allowing them to claim refunds on duties paid prior to the concession's enactment date, while ensuring no new liabilities are imposed on any party.
Scope and Application
The Customs Act 1901 applies to the regulation of goods imported into Australia, including the imposition of customs duty. Part XVA of the Act pertains specifically to Tariff Concession Orders (TCO), which may be applied for by any person to reduce or eliminate customs duty on certain goods. The Chief Executive Officer of Customs (CEO) has the authority to make a TCO if satisfied that the application meets the core criteria, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves a public notice period allowing for submissions against the concession, though in this case, none were received. The TCO applies nationally and affects the rights of importers by providing a benefit in the form of duty refunds on imports of the specified goods since the date the TCO was taken to have come into force, without imposing any new liabilities on persons other than the Commonwealth. The TCO does not impact any existing rights or liabilities accrued before its registration.
Key Provisions
The main operative sections of this legislation (F2009L00315) include sections 269C, 269B, 269E, 269P(3), and 269S. Section 269C outlines the core criteria for a Tariff Concession Order (TCO) application to be accepted by the Chief Executive Officer of Customs (CEO). According to section 269B, the term 'goods produced in Australia' is defined by section 269D, 'ordinary course of business' by section 269E, and 'substitutable goods' in relation to a TCO application means goods produced in Australia that can be put to a use corresponding with the goods the subject of the application. Section 269P(3) stipulates that if the CEO is satisfied that a TCO application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Lastly, section 269S specifies that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes certain obligations and requirements on the parties involved. An applicant, such as United Phosphorus Ltd in this case, must submit an application to the CEO for a TCO in respect of specific goods (section 269F). The CEO, upon receiving a valid application, is required to decide whether the application meets the core criteria (section 269C). If satisfied, the CEO must make a written order (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)).
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly mention any criminal offences or penalties for breaching the provisions related to TCOs. However, the Act does provide that a 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 (subsection 269S(2)). Moreover, the rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). The TCO does not impose any liabilities on any person.