EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928685
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 insecticides on 06 August 2009.
Instrument
TCO No 0928685 was made on 16 October 2009. It declares that those certain insecticides 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. 0928685 is taken to have come into force on 06 August 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, enacted by the Parliament of Australia, establishes a framework for the administration of customs duties and provides for the creation of Tariff Concession Orders (TCOs) to address specific economic or policy needs. Enacted to facilitate the import of goods by applying lower rates of customs duty, the Act ensures that businesses can access necessary products at reduced costs, thereby fostering economic efficiency and competitiveness. The Tariff Concession Instrument No. 0928685, issued in 2010, exemplifies this objective by granting tariff concessions on certain insecticides, following an application by Syngenta Crop Protection. The policy objective underpinning this instrument is to ensure that essential goods, which are not produced domestically, are available to Australian businesses and consumers at a reduced customs duty rate, thereby supporting industry needs and economic activity.
Scope and Application
The Tariff Concession Order No. 0928685 under the Customs Act 1901 applies to certain insecticides, specifically those for which Syngenta Crop Protection made an application on 6 August 2009. This instrument was created to provide a tariff concession, effectively granting a lower rate of customs duty on these goods, contingent on the absence of substitutable goods produced in Australia at the time of the application. The concession was made effective from the date the application was lodged, and it does not retroactively affect any rights or liabilities of parties other than the Commonwealth. The scope of the Order is limited to the goods specified in the application, and it does not extend to goods outlined in section 269SJ of the Act, which are ineligible for tariff concessions. The Order was published in the Gazette, inviting submissions from interested parties, though none were received. The geographic reach of this legislation is nationwide, as it pertains to the application of the Customs Act 1901 across Australia. Additionally, the application of this Act can be extended or restricted through subordinate instruments, although such extensions or restrictions are not detailed in the explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0928685 under the Customs Act 1901, specifies certain insecticides as eligible for tariff concessions, as outlined in section 269F (1) and section 269P (3). This instrument, which came into force on 6 August 2009, was enacted following a successful application by Syngenta Crop Protection on the same date. It declares that these insecticides are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively reducing their duty from the general rate of 5% to free of charge. This tariff concession applies to the insecticides in question as the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia at the time of the application.
Under the Customs Act 1901, the CEO has specific obligations when processing a Tariff Concession Order (TCO) application. As per section 269C, the CEO must determine whether the application meets the core criteria, which require that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Additionally, section 269K (1) mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed. In the case of TCO No. 0928685, no objections were received.
Failure to comply with the requirements of the Customs Act 1901, including the proper application and administration of TCOs, can lead to significant consequences. While the explanatory statement does not specify particular offences or penalties for breaches related to TCOs, general provisions within the Customs Act 1901 provide for both civil and criminal penalties for non-compliance. These may include fines and imprisonment for serious breaches. Importers can also apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, nor does it impose any liabilities on any person in respect of actions taken prior to the TCO’s registration date.