EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946989
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 Pty Ltd applied for a TCO in respect of certain miticides diafenthiuron on 03 December 2009.
Instrument
TCO No 0946989 was made on 26 February 2010. It declares that those certain miticides diafenthiuron 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. 0946989 is taken to have come into force on 03 December 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 Tariff Concession Instrument No. 0946989, enacted in 2010, is a legislative instrument under the Customs Act 1901, which facilitates the application of tariff concessions on certain goods. This instrument was introduced to address the need for reduced customs duties on specific imported goods, provided that no substitutable goods are produced in Australia. The Customs Act 1901, enacted by the Australian Parliament, empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to provide tariff concessions for particular goods when certain criteria are met. The policy objective behind this legislation is to support Australian industries by ensuring that imported goods are not subject to duty if they do not have local substitutes, thus fostering fair competition and economic efficiency.
The instrument in question was enacted following an application by Syngenta Crop Protection Pty Ltd for tariff concessions on certain miticides diafenthiuron. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria set out in the Customs Act 1901. Consequently, a TCO was issued, granting a duty-free status to these specific miticides, effective from the date the application was lodged. This legislative action ensures that the rights of importers are positively impacted, allowing them to apply for refunds of duties paid on these goods imported since the TCO’s effective date, without any adverse consequences or new liabilities imposed on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for a lower rate of customs duty on specified goods. This mechanism is applicable to any person or entity seeking to import goods that are not already produced in Australia and that meet the criteria outlined in the Act. The geographical reach of this legislation is national, as it applies across Australia, and it extends to any goods imported into the country. A TCO application must meet the core criteria set out in section 269C of the Act, which includes the condition that no substitutable goods are produced in Australia. Once the CEO is satisfied that an application meets these criteria, a TCO is made, and the reduced duty rate is applied to the specified goods. The Tariff Concession Instrument No. 0946989, made in respect of certain miticides diafenthiuron, exemplifies this process, where the duty rate was reduced to free following a successful application. The Act ensures that the rights of importers are advantageously affected, with potential duty refunds available for goods imported after the TCO's effective date. However, it explicitly states that the TCO does not impose liabilities on any person and does not affect the rights of any person adversely in relation to actions taken prior to the TCO's registration.
Key Provisions
The Customs Act 1901, under Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F enables an individual or entity to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application is valid and does not pertain to goods excluded by section 269SJ, they must assess whether the application fulfils the core criteria stipulated in section 269C. For the application to meet these criteria, it must be established that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F, respectively. If the CEO concludes that the application satisfies these criteria, they are required under subsection 269P(3) to issue a written order (the TCO) specifying that the goods in question are subject to a prescribed tariff item outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is made in accordance with the statutory requirements and providing sufficient evidence to demonstrate that the goods in question do not have substitutable counterparts produced in Australia. Additionally, the CEO must follow the procedural requirements set out in the Act, such as publishing a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO must then consider any submissions received before making a final decision. In this case, as no submissions were received, the CEO proceeded to issue the TCO as per the application.
Failure to comply with the provisions of the Act, or any regulations or orders made under it, may result in various legal consequences. While the explanatory statement does not detail specific offences or penalties related to breaches of the TCO provisions, general provisions of the Customs Act and related regulations may apply. These could include fines, imprisonment, or other penalties as prescribed by law for non-compliance, evasion, or other breaches of customs regulations. Importers, however, may benefit from a refund of duty on goods imported after the TCO comes into effect, as per paragraph 126(1)(r) of the Regulations, provided they meet the eligibility criteria for such a refund.