EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113796
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.
Sipcam pacific Australia applied for a TCO in respect of certain herbicides on 28 April 2011.
Instrument
TCO No 1113796 was made on 18 July 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. 1113796 is taken to have come into force on 28 April 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 was enacted by the Parliament of Australia to regulate customs and excise matters. Part XVA of this Act introduced a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty for certain goods. This was introduced to address the problem of high import duties on goods that were not produced domestically and had no substitutable goods within Australia. The objective is to encourage the importation of goods that are not produced in Australia, thereby supporting economic efficiency and consumer choice. The process for granting a TCO involves an application by an interested party, followed by the CEO's assessment of whether the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia. Once the CEO is satisfied that the criteria are met, a TCO is issued, effective from the date the application was lodged. This legislative framework aims to provide tariff relief without imposing any new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs. This Act applies to individuals or entities that seek to import goods for which they can apply for a TCO to benefit from a lower rate of customs duty. The application process requires the CEO to determine whether the goods in question meet specific criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business. Exemptions apply to certain goods specified in section 269SJ, which cannot be subject to a TCO. The geographic scope of this Act is national, as it pertains to all imports into Australia. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable duty rates and tariff items. TCO No. 1113796, for instance, was made effective from the date the application was lodged, 28 April 2011, and applies to certain herbicides that are now subject to a free duty rate, as opposed to the general 5% duty rate.
Key Provisions
The Tariff Concession Instrument No. 1113796 under the Customs Act 1901 (section 269F) pertains to the establishment of a tariff concession order (TCO) for certain herbicides, granting a free rate of duty instead of the general 5% duty (section 269P(3)). This instrument was made on 18 July 2011, following an application by Sipcam Pacific Australia on 28 April 2011. The TCO is deemed to have come into effect from the date the application was lodged (section 269S(1)), thus from 28 April 2011. The CEO of Customs determined that no substitutable goods were produced in Australia at the time of the application, satisfying the core criteria set out in section 269C of the Act.
Entities governed by this Act must adhere to the provisions that allow for the application of TCOs, ensuring that the application meets the specified criteria, particularly the non-production of substitutable goods in Australia (section 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with the TCO.
Breaching the obligations set forth in the Customs Act 1901 could lead to civil and criminal consequences. For instance, knowingly providing false information in an application for a TCO may result in penalties. The maximum penalties for misleading or deceptive conduct under the Act can include fines up to $22,200 for individuals and $111,000 for corporations, as well as potential imprisonment. Additionally, failure to comply with the notification requirements or any other obligations may lead to further legal repercussions, including the possibility of the TCO being revoked or the imposition of additional duties on the goods in question.