EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927859
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.
Bayer Cropscience applied for a TCO in respect of certain insecticides suspension concentrate on 31 July 2009.
Instrument
TCO No 0927859 was made on 09 October 2009. It declares that those certain insecticides suspension concentrate 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. 0927859 is taken to have come into force on 31 July 2009.
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 to provide for the regulation of customs and excise duties, including the administration of border control and the collection of duties. One of the key features of the Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on certain goods under specified conditions. Enacted by the Parliament of Australia, the Customs Act aims to facilitate trade by offering tariff concessions where appropriate, thus promoting economic efficiency and competitiveness. Tariff Concession Instrument No. 0927859, made under the authority of the Customs Act, addresses the specific issue of granting tariff concessions for certain insecticides suspension concentrate applied for by Bayer Cropscience. The instrument was issued after it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The policy objective here is to ensure that tariff concessions are granted in a manner that does not disadvantage Australian producers while providing relief to importers and consumers.
Scope and Application
The Customs Act 1901 applies to the process of granting Tariff Concession Orders (TCOs) for certain goods, allowing for a lower rate of customs duty to be applied. Specifically, the Act governs the application process for TCOs, whereby a person can apply to the Chief Executive Officer of Customs (CEO) for a concession if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess the application against core criteria outlined in the Act, primarily determining if no substitutable goods were produced in Australia on the date of the application. If these criteria are met, the CEO is required to issue a TCO, as seen in the case of TCO No. 0927859 granted to Bayer Cropscience for certain insecticides suspension concentrate. This TCO was issued after Bayer Cropscience applied on 31 July 2009, and it came into effect on that date, effectively reducing the duty on the specified goods from 5% to free. The Act ensures that the rights of non-Commonwealth entities are not adversely affected by the issuance of a TCO, and it provides mechanisms for importers to apply for duty refunds on eligible goods.
Key Provisions
The Tariff Concession Order No. 0927859, made under section 269F of the Customs Act 1901, pertains to certain insecticides suspension concentrate, which are now subject to a zero rate of customs duty, down from the general rate of 5% (sections 269P(3) and 269S). This order applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The order was made on 9 October 2009, and it is deemed to have come into effect on 31 July 2009, the date the application was lodged (subsection 269S(1)). The order was made following Bayer Cropscience's application for a tariff concession and the Chief Executive Officer of Customs' determination that no substitutable goods were produced in Australia on the date of the application (section 269C).
The obligations imposed by the Act on the parties it governs are primarily on the Chief Executive Officer of Customs. The CEO must ensure that applications for a Tariff Concession Order are processed in accordance with the Act and that any order made meets the core criteria, specifically that no substitutable goods were produced in Australia on the date of the application (section 269C). Upon receiving a valid application, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). In this case, no submissions were received, leading to the issuance of the TCO. Importers of the specified goods can apply for a refund of duty paid on imports since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Order No. 0927859 could result in various civil or criminal consequences. For example, if an importer falsely claims a tariff concession on goods that do not meet the criteria, they could be liable for penalties under the Customs Act, which may include fines or imprisonment, depending on the severity of the offence (section 238). Additionally, the CEO has the authority to impose administrative penalties for non-compliance with the Act or the terms of the TCO. However, the explanatory statement does not provide specifics on these penalties.