EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110728
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 Limited applied for a TCO in respect of certain herbicides on 30 March 2011.
Instrument
TCO No 1110728 was made on 15 June 2011. It declares that those certain herbicides 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. 1110728 is taken to have come into force on 30 March 2011.
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, established a framework within which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This legislative instrument aimed to address the need for tariff concessions on specific goods to support industry and economic growth. Tariff Concession Instrument No. 1110728, published on 15 June 2011, is a specific instance where the CEO granted a concession to Syngenta Crop Protection Pty Limited for certain herbicides, lowering the customs duty rate from 5% to free. This measure was introduced to ensure that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria set out in the Customs Act 1901. The policy objective was to facilitate the import of these specific goods without imposing any liabilities or disadvantaging existing rights of importers, while potentially benefiting them through duty refunds for goods imported since the TCO's effective date of 30 March 2011.
Scope and Application
The Tariff Concession Instrument No. 1110728 applies to any entity seeking a tariff concession order (TCO) for certain goods, particularly in this case, specific herbicides, under the Customs Act 1901. The Act operates on a Commonwealth level and applies to the importation of goods, with the particular TCO affecting importers of the specified herbicides. The application for a TCO is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, thereby satisfying the core criteria outlined in the Act. Notably, the TCO exempts the goods in question from the usual customs duty, which would otherwise apply at a rate of 5%, making it free of charge. The geographic reach of the TCO is national, applying to all importers across Australia. Any exclusions are limited to the specific goods listed in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The commencement of this TCO is retroactive to the date of the application, 30 March 2011, with no retroactive imposition of liabilities on any person. Subordinate instruments may extend or restrict the application of the TCO as deemed necessary by the CEO.
Key Provisions
The key operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 1110728, involve the application and approval process for Tariff Concession Orders (TCOs) (sections 269F, 269P). Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specified goods, provided these goods do not fall under the exclusions listed in section 269SJ. Section 269P mandates that if the CEO is satisfied the application meets the core criteria, as detailed in sections 269B and 269C, a written order (TCO) must be made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This effectively grants the specified goods a lower rate of customs duty.
The obligations and requirements imposed by the Act on the parties or entities it governs include ensuring that applications for TCOs are made in accordance with section 269F and that the CEO is satisfied that the application meets the core criteria set out in sections 269B and 269C. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid (subsection 269K(1)). The CEO is also required to consider any submissions received before making a final decision on the application. The Act further mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), which in this case is 30 March 2011.
In terms of potential offences, penalties, or consequences for breach, the Act does not specify any particular offences directly related to the application or issuance of a TCO. However, any misuse of a TCO or failure to comply with the terms of the concession could potentially lead to legal consequences under other relevant sections of the Customs Act 1901. For example, any fraudulent activities related to the import of goods under a TCO could be subject to penalties under sections that deal with false statements or fraudulent conduct. While the explanatory statement does not provide specific maximum penalties for breaches related to TCOs, penalties for general customs offences can include fines and imprisonment, depending on the severity and intent of the breach.