EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1122947
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 fungicides on 12 July 2011.
Instrument
TCO No 1122947 was made on 19 September 2011. 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. 1122947 is taken to have come into force on 12 July 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 Tariff Concession Instrument No. 1122947 was enacted under the Customs Act 1901 to address the need for tariff concessions for specific goods not produced domestically. This instrument was introduced by the Chief Executive Officer of Customs, in response to an application by Syngenta Crop Protection Pty Ltd for tariff concessions on certain fungicides. The application was lodged on 12 July 2011, and the instrument was made on 19 September 2011, effective from the date of the application. The objective was to provide a tariff concession by declaring the fungicides as subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby reducing the duty from 5% to free, provided no substitutable goods were produced in Australia. The instrument was published in the Gazette, inviting submissions, none of which were received. The concession benefits importers by allowing them to apply for a refund of duty on imported goods since the instrument's effective date, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty to specified goods. This process is available to any person who applies for a TCO in respect of goods, provided these goods do not fall within the exclusions outlined in section 269SJ of the Act. The scope of a TCO is contingent upon the CEO's determination that no substitutable goods are produced in Australia at the time of the application, as per section 269C. The application of this legislation is national, as it is a Commonwealth Act, and it impacts all entities involved in the importation of goods subject to a TCO. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting public submissions on the proposed TCO, although no submissions were received for TCO No. 1122947. The instrument itself, effective from the date the application was lodged, confers benefits to importers by allowing them to seek refunds on duties paid on goods imported since the effective date of the TCO, without imposing new liabilities on any person. The scope and application of the TCO may be further defined or modified through subordinate instruments as necessary.
Key Provisions
The Tariff Concession Instrument No. 1122947 primarily concerns the granting of a Tariff Concession Order (TCO) for certain fungicides under the Customs Act 1901 (section 269F). This order was made following an application by Syngenta Crop Protection Pty Ltd on 12 July 2011. Once the Chief Executive Officer of Customs (CEO) was satisfied that the application met the core criteria, as outlined in section 269C, a TCO was issued on 19 September 2011, declaring the fungicides to be subject to a free rate of duty instead of the general 5% rate (section 269P(3)). This TCO came into force on the date the application was lodged, as per subsection 269S(1).
The Act imposes several obligations and requirements on the parties involved. Firstly, any person may apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO (section 269F). The CEO must then determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Furthermore, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
Breaches of the provisions under this Act may result in civil or criminal penalties. Although the explanatory statement does not detail specific penalties, it is known that under Australian law, breaches of customs regulations can lead to significant fines and, in severe cases, imprisonment. For instance, under the Crimes Act 1914, an individual or entity found guilty of a serious breach could face fines up to a substantial amount and/or imprisonment for several years, depending on the gravity of the offence. The TCO itself ensures that no existing rights or liabilities are adversely affected by its enactment, thereby safeguarding the interests of all parties involved.