EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606995
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.
Stryker Australia Pty Ltd applied for a TCO in respect of certain skeletal putty on 18 April 2006.
Instrument
TCO No 0606995 was made on 7 July 2006. It declares that those certain skeletal putty 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. 0606995 is taken to have come into force on 18 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 Tariff Concession Instrument No. 0606995 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on certain imported goods, specifically skeletal putty, which were not being produced in Australia. This instrument was created to provide a lower rate of customs duty on these goods, effectively reducing the financial burden on importers and encouraging the use of these essential products. The instrument was developed in response to an application by Stryker Australia Pty Ltd and was designed to meet the core criteria established by the Act, ensuring that no substitutable goods were produced domestically. This legislative measure was introduced by the Chief Executive Officer of Customs and was aimed at facilitating smoother trade and import processes for these specific goods.
The instrument was officially published in the Gazette, inviting any interested parties to submit objections if they believed the tariff concession should not proceed. No submissions were received, allowing the instrument to proceed without opposition. The concession came into effect on the date the application was lodged, 18 April 2006, and it did not impose any new liabilities on individuals or entities, except for the Commonwealth. Importers stood to benefit significantly, as they could apply for a refund of duties paid on the goods imported from the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which apply lower rates of customs duty on specific goods. This applies to entities or individuals who import goods that meet the criteria for a TCO, and the process is designed to benefit importers by reducing duty rates on certain goods. The geographic reach of this legislation is national, as it operates within the framework of Australian customs law. However, the Act excludes goods specified in section 269SJ from being subject to a TCO, which typically includes those goods that can be produced domestically in an ordinary course of business. The instrument in question, TCO No. 0606995, applies to certain skeletal putty, setting their duty rate to free, effective from 18 April 2006, the date of the application. The CEO’s decision to issue the TCO was made without any public submissions opposing the concession, indicating a smooth process in this instance.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), establish the framework for concessions on customs duty for certain goods. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, which is subject to the CEO determining whether it meets the core criteria under section 269C. If these criteria are met, the CEO must issue a written TCO as per section 269P(3). This particular TCO, No. 0606995, was made on 7 July 2006, and it declares that certain skeletal putty, as applied for by Stryker Australia Pty Ltd, will be subject to a free rate of duty instead of the general 5% rate. The TCO came into force on the date of the application, 18 April 2006, as stipulated in section 269S(1) of the Act.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any TCO application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also determine if the application meets the core criteria set out in section 269C, specifically that no substitutable goods were produced in Australia on the application date. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and section 269D respectively. Additionally, the CEO is required to publish a notice in the Gazette inviting any objections to the TCO application, as per subsection 269K(1). In this instance, no submissions were received.
Breaches of the provisions under the Customs Act 1901 can lead to various consequences. While the Act does not explicitly state civil or criminal penalties for failure to comply with TCO requirements, any misrepresentation or fraudulent claims in the application process could potentially lead to legal action. For instance, submitting false information to obtain a TCO could result in criminal charges under other relevant sections of the Act or associated regulations. The Act ensures that the rights of importers are beneficially affected, and they can apply for duty refunds for goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.