EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136055
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 insecticides on 27 October 2011.
Instrument
TCO No 1136055 was made on 16 January 2012. It declares that those certain insecticides 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. 1136055 is taken to have come into force on 27 October 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, establishes a framework for the imposition and collection of customs duties on imported goods. Among its provisions, Part XVA of the Act outlines the procedure for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on specific goods. This mechanism was introduced to address the need for tariff flexibility in certain economic circumstances, particularly when it is necessary to ensure that Australian industries can compete effectively with imported goods by providing them with tariff concessions. Tariff Concession Instrument No. 1136055, made by the Chief Executive Officer of Customs on 16 January 2012, exemplifies the application of this framework, as it grants a tariff concession on certain insecticides following an application by Syngenta Crop Protection Pty Ltd. The policy objective in this instance was to ensure that Australian businesses could import these goods without incurring the full rate of customs duty, thereby fostering fair competition and supporting industry needs.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. This Act facilitates the application process where the Chief Executive Officer of Customs (CEO) assesses whether an application for a TCO meets the core criteria, particularly focusing on whether substitutable goods are produced in Australia. If the CEO determines that no such goods exist, a TCO can be issued, granting a lower rate of customs duty on the specified goods. The scope of this legislation extends across the Commonwealth, impacting various industries by potentially reducing import costs for certain products. The TCO does not apply to goods specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. Moreover, the Act ensures that the issuance of a TCO does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken prior to the TCO's effective date. Subordinate instruments may further define or modify the application of this Act.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1136055, made under the Customs Act 1901, involve the application and approval of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO, with Section 269C setting out the core criteria that must be met for approval. This includes ensuring that no substitutable goods were produced in Australia on the date the application was lodged, as defined by Sections 269D and 269E. If these criteria are satisfied, the CEO is required under Section 269P(3) to issue a TCO, which specifies the goods and the corresponding tariff concession.
The Act imposes several obligations on the parties involved. The CEO must assess the application against the criteria outlined in Section 269C, ensuring that no substitutable goods were produced in Australia. Upon approval, the CEO must issue a written order specifying the concession and publish a notice in the Gazette, inviting any objections (Section 269K). The applicant must provide all necessary information and documentation to support their application, ensuring transparency and adherence to the legislative requirements.
Breaches of the provisions in the Customs Act 1901 can lead to various civil and criminal consequences. For instance, providing false information in an application can result in penalties as stipulated in Section 283 of the Act. The maximum penalty for such offences includes substantial fines and, in some cases, imprisonment, reflecting the seriousness with which the Act treats non-compliance. Additionally, failure to comply with the notice and objection process outlined in Section 269K could result in the TCO being deemed invalid, thereby impacting the tariff concessions intended for the specified goods.