EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613084
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.
Medtec Products Australia Pty Ltd applied for a TCO in respect of certain patient lifters on 4 August 2006.
Instrument
TCO No 0613084 was made on 20 October 2006. It declares that those certain patient lifters 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. 0613084 is taken to have come into force on 4 August 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 facilitate and regulate the importation and exportation of goods in Australia, including the imposition and remission of customs duties and taxes. Tariff Concession Instrument No. 0613084, made in 2006, addresses the gap in the application of concessional tariff rates for specific goods not produced in Australia, thus encouraging the importation of these goods. This instrument was introduced to provide a more competitive market environment by allowing for lower rates of customs duty on certain goods, thereby potentially lowering consumer prices and increasing the availability of goods that are not domestically produced. The instrument was enacted by the Chief Executive Officer of Customs, acting under the authority conferred by section 269F of the Customs Act 1901, and aims to meet the core criteria outlined in the Act, ensuring that the concessional tariff rates are applied appropriately and fairly.
Scope and Application
The Tariff Concession Instrument No. 0613084 applies to Medtec Products Australia Pty Ltd, specifically to certain patient lifters as defined in the Customs Act 1901. This Act governs the application of customs duties and concessions, and the Instrument extends to the entire Commonwealth of Australia. The Act applies to entities and individuals involved in the importation of the specified goods, allowing them to benefit from the tariff concession. The Instrument excludes goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order (TCO). The TCO was issued following an application by Medtec Products Australia Pty Ltd and subsequent assessment by the Chief Executive Officer of Customs, confirming that the application met the core criteria, including the absence of substitutable goods produced in Australia. This Instrument does not impose new liabilities and preserves existing rights of parties, except for the beneficial application to importers who may now apply for a refund of duty under the Customs Tariff Act 1995.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0613084 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C specifies the core criteria for a Tariff Concession Order (TCO) application to be valid, which includes that no substitutable goods are produced in Australia at the time of the application. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to make a TCO if the application meets these core criteria, while Section 269S(1) provides that a TCO is effective from the day the application is lodged. The instrument declares that certain patient lifters are subject to a 0% duty rate, as opposed to the general 5% duty rate, due to these legislative provisions.
Under this legislation, entities such as Medtec Products Australia Pty Ltd must apply to the CEO for a TCO if they believe their goods meet the specified criteria. The CEO has a responsibility to assess the application against the criteria outlined in the Act, particularly ensuring no substitutable goods are produced in Australia at the time of the application. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. If no valid submissions are received, the CEO must proceed to make the TCO as specified by Section 269P(3). This process ensures that the TCO is made fairly and transparently, allowing for public scrutiny and input.
Breach of the provisions in this instrument can lead to legal consequences. If an entity falsely claims that no substitutable goods are produced in Australia when they are, this could be considered a fraudulent application. Such an offence could result in civil or criminal penalties as prescribed by the Customs Act 1901 and the associated regulations. The specific penalties for such breaches are not detailed in the explanatory statement but typically can include fines or imprisonment, depending on the severity of the offence and the discretion of the court.
The explanatory statement clarifies that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on anyone for actions taken before the TCO’s effective date. It further notes that the TCO beneficially affects the rights of importers, who can apply for a refund of duty on goods imported since the TCO’s effective date. This provision ensures that the legislative changes do not unjustly disadvantage any party and that the benefits of the tariff concession are appropriately extended to those eligible under the scheme.