EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947008
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 norflurazon herbicide on 3 December 2009.
Instrument
TCO No 0947008 was made on 26 February 2010. It declares that those certain norflurazon 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. 0947008 is taken to have come into force on 3 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 Customs Act 1901 was enacted to regulate the importation and exportation of goods in Australia and to impose customs duties. The Tariff Concession Instrument No. 0947008, issued in 2010, addresses the need for tariff concessions on specific goods where no substitutable goods are produced in Australia. This legislative instrument was introduced to provide relief on certain imports by allowing lower rates of customs duty, thereby facilitating access to particular goods that are not domestically produced. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs). The policy objective behind this instrument is to ensure that Australian businesses and consumers have access to competitively priced goods that are not manufactured locally, thereby promoting economic efficiency and consumer welfare.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek to import goods into Australia and are seeking to benefit from a reduced rate of customs duty. The Act targets specific goods that are not currently produced in Australia, ensuring that local production is not undermined by imported goods that could serve as substitutes. The geographic reach of this legislation is national, as it applies across the Commonwealth of Australia. Any person or entity that meets the criteria set out in the Act may apply for a TCO, provided that the goods in question are not those specified in section 269SJ, which excludes certain goods from eligibility. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and applicable duty rates in the Tariff. The TCOs themselves may set out additional conditions or details pertaining to the concession, further tailoring the application of the Act to specific goods and circumstances.
Key Provisions
Section 269C of the Customs Act 1901 sets out the core criteria that a Tariff Concession Order (TCO) application must meet. To qualify, the goods in question must not have substitutable alternatives produced in Australia on the day the application is lodged. 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 Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a TCO.
The obligations imposed by the Customs Act on parties applying for a TCO include ensuring that the application is lodged with sufficient information and that it meets the core criteria outlined in section 269C. The CEO has the responsibility to review the application and determine if it is valid, which involves checking that no substitutable goods are produced in Australia. Upon satisfying these criteria, the CEO must issue a written order declaring the goods to which the TCO applies, as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. This ensures transparency and allows for stakeholder input.
Breaches of the provisions under the Customs Act, particularly in relation to the incorrect application or misuse of a TCO, can result in various civil and criminal consequences. The Act does not specify maximum penalties for breaches in this context, but penalties for general breaches of the Customs Act can include fines and imprisonment. The exact penalties depend on the nature and severity of the breach, with potential maximum penalties outlined in other sections of the Act. For instance, penalties for fraudulent activities under the Customs Act can result in fines of up to $22,000 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms. These penalties underscore the importance of compliance with the Act's provisions.