EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606366
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.
Maquet Australia Pty Ltd applied for a TCO in respect of certain operating tables on 4 April 2006.
Instrument
TCO No 0606366 was made on 23 June 2006. It declares that those certain operating tables 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 0%.
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. 0606366 is taken to have come into force on 4 April 2006.
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, as amended, addresses the need for flexibility in tariff regulation by establishing a scheme for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specific goods. This was enacted by the Parliament of Australia to provide economic benefits by facilitating the import of goods that are not produced domestically, thereby promoting competition and consumer choice. The explanatory statement for Tariff Concession Instrument No. 0606366 indicates that the instrument was introduced to address a specific application from Maquet Australia Pty Ltd for tariff concessions on certain operating tables. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria for a TCO under section 269C of the Act. Consequently, the instrument was issued, providing a zero percent duty rate on the specified operating tables, effective from the date of application on 4 April 2006, with no adverse impact on the rights of non-Commonwealth persons.
Scope and Application
The Customs Act 1901, under its Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty to be applied to specific goods that meet the criteria outlined in the Act. The Act applies to any person who may apply for a TCO in relation to goods, provided the goods are not specified in section 269SJ, which lists those items ineligible for tariff concessions. A TCO application will be considered if, at the time of application, no substitutable goods are being produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E, and 269F. The TCO affects the importation of goods by providing tariff relief, which can be backdated to the date of the application, but it does not disadvantage any person by imposing liabilities for actions taken prior to the order's registration. This concession is intended to benefit importers by potentially allowing them to claim refunds for duties paid on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0606366, revolve around the process and criteria for making Tariff Concession Orders (TCOs). Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C (1) 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. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P (3)). This particular instrument, TCO No. 0606366, was made on 23 June 2006, declaring that certain operating tables are subject to a 0% duty rate under item 50 of Schedule 4 to the Tariff, as the CEO was satisfied that no substitutable goods were produced in Australia.
The obligations and requirements imposed by this Act on parties or entities it governs are primarily centred on the application and approval process for TCOs. An applicant must ensure that their TCO application is made in accordance with the requirements of section 269F and that it meets the core criteria set out in section 269C. The CEO, on the other hand, is obligated to determine whether the application meets these criteria, to make a written order if the application is found to be valid, and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K (1)). This ensures transparency and provides an opportunity for stakeholders to voice their concerns if they believe the TCO should not be made.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly state the penalties for non-compliance with the TCO process or the misuse of a TCO. However, breaches of other provisions within the Act, such as fraudulent activity or misrepresentation, may result in criminal charges, fines, and imprisonment. For instance, under section 248 of the Act, a person who knowingly or recklessly makes a false statement or representation in relation to an import or export declaration may be liable to a penalty of up to $22,000 or imprisonment for up to five years, or both. It is important to note that penalties for specific offences may vary depending on the nature and severity of the breach.