EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610529
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.
Scientific Technical Services (Aust) Pty Ltd applied for a TCO in respect of certain dental and/or medical sterilisers on 19 June 2006.
Instrument
TCO No 0610529 was made on 8 September 2006. It declares that those certain dental and/or medical sterilisers 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. 0610529 is taken to have come into force on 19 June 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 was enacted to establish a comprehensive framework for customs and excise in Australia. Among its provisions, Part XVA introduces a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to reduce customs duty rates on certain goods. This was introduced to address the need for flexibility in customs duties to support trade and economic policy objectives, particularly in cases where substitutable goods are not produced in Australia. The Parliament of Australia enacted this legislation to facilitate trade by ensuring that imports are competitively priced when no local alternatives exist. In line with this objective, Tariff Concession Instrument No. 0610529 was made on 8 September 2006, following an application by Scientific Technical Services (Aust) Pty Ltd for a TCO concerning dental and/or medical sterilisers. The instrument, which took effect from 19 June 2006, reduced the duty on these goods from 5% to 0%, in line with the provisions of item 50 of Schedule 4 to the Customs Tariff Act 1995.
Scope and Application
The Tariff Concession Instrument No. 0610529, under the Customs Act 1901, applies to any individual or entity seeking tariff concessions for certain dental and/or medical sterilisers imported into Australia. The Act facilitates the process by which the Chief Executive Officer of Customs can grant such concessions, provided that the goods in question are not listed in section 269SJ of the Act, which specifies goods that are ineligible for a tariff concession order. The core criteria for approval, as per sections 269C, 269D, 269E, and 269P of the Act, require that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. This instrument's jurisdictional reach extends across the Commonwealth of Australia and it came into force on 19 June 2006, the date the application was made. The TCO does not impose any liabilities on any person and does not affect the rights of persons as at the date of registration, thereby not disadvantaging them or imposing liabilities for actions taken prior to the registration date.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (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, they must decide whether the application meets the core criteria outlined in section 269C. If these criteria are met, a TCO must be made under section 269P(3). Section 269C stipulates that an 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. This is further defined by sections 269D and 269E of the Act.
The Act imposes several obligations on the parties involved. The CEO is required to accept a valid application for a TCO, determine whether the core criteria are met, and if so, make a written TCO. The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it, as outlined in subsection 269K(1). The applicant, in this case Scientific Technical Services (Aust) Pty Ltd, must ensure their application is valid and meets the core criteria to qualify for the concession. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged.
Breach of the provisions of the Customs Act 1901 can result in various consequences. The Act does not specify particular offences or penalties for failure to comply with the requirements for TCOs. However, failure to meet the core criteria for a TCO may result in the CEO declining to make the order. Additionally, if a TCO is made in error, it may be subject to revocation or amendment by the CEO. The Act does not impose any specific civil or criminal penalties for non-compliance, but general provisions of the Customs Act 1901 and other relevant legislation may apply in cases of non-compliance or misuse of concessions.