EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000799
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 fungicides on 06 January 2010.
Instrument
TCO No 1000799 was made on 22 March 2010. It declares that those certain fungicides 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. 1000799 is taken to have come into force on 06 January 2010.
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 Australian Parliament, provides a framework for the administration of customs duties and tariffs in Australia. This legislation was introduced to address the need for a structured process for the application and consideration of tariff concessions on certain imported goods. Specifically, it enables the Chief Executive Officer of Customs to grant tariff concessions on goods that are not produced in Australia, thus promoting trade and economic efficiency by reducing the duty on specific imported items. The explanatory statement for Tariff Concession Instrument No. 1000799, made under this Act, highlights that Syngenta Crop Protection applied for and received a tariff concession on certain fungicides. This concession resulted in a reduction of the duty from the general rate of 5% to free, effective from the date the application was lodged, 6 January 2010. The process included an invitation for public submissions, none of which were received, thereby allowing the concession to proceed without opposition. The tariff concession aims to benefit importers by potentially enabling them to claim refunds on duties paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia, with specific focus on those who may apply for Tariff Concession Orders (TCOs) in relation to those goods. The Act encompasses a broad range of industries and transactions involving the importation of goods, particularly where a TCO is sought to reduce the customs duty rate on specific goods. The Act has a national reach, applying across all states and territories of Australia as a Commonwealth legislation. The Act specifies exclusions, notably under section 269SJ, which lists goods that cannot be subject to a TCO, such as those that are harmful to health or the environment. The Act’s application can be extended or restricted through subordinate instruments, including regulations and orders, which may further define terms or processes related to TCO applications and the importation of goods. The Explanatory Statement outlines how Tariff Concession Instrument No. 1000799 was made under the Act, detailing the application by Syngenta Crop Protection for certain fungicides and the subsequent decision by the Chief Executive Officer of Customs to grant a concession, effectively reducing the duty rate from 5% to free.
Key Provisions
The main operative sections of the Customs Act 1901 concerning Tariff Concession Orders (TCOs) involve sections 269C, 269B, and 269P. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines the terms used in determining whether the core criteria are met, such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, any person who wishes to apply for a TCO must do so by lodging an application with the CEO (section 269F). The CEO must then assess whether the application meets the core criteria, which involves determining if there are any substitutable goods produced in Australia (section 269C). If the application meets these criteria, the CEO is required to make a written TCO (section 269P(3)). Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be made (subsection 269K(1)).
In terms of breaches and penalties, the Customs Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, any breach of the customs laws generally could result in criminal charges under the Customs Act, including fines and imprisonment. For example, knowingly making a false statement in a customs declaration could lead to a fine of up to $22,200 or imprisonment for up to two years, or both, under section 236 of the Act. Similarly, evading customs duty or otherwise contravening the Act could result in fines and imprisonment under section 145. The penalties for these offences are determined by the severity of the breach and the discretion of the court.