EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613892
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 cements on 21 August 2006.
Instrument
TCO No 0613892 was made on 10 November 2006. It declares that those certain skeletal cements 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. 0613892 is taken to have come into force on 21 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties, including the mechanism for Tariff Concession Orders (TCOs). This Act was introduced to facilitate the application for reduced customs duty rates on specific goods under certain conditions. The Tariff Concession Instrument No. 0613892, made under the Customs Act, specifically addresses the application by Stryker Australia Pty Ltd for tariff concessions on certain skeletal cements, aiming to ensure that such medical goods are accessible without the burden of high customs duties. This instrument was designed to meet the core criteria for tariff concessions, ensuring that no substitutable goods were produced in Australia at the time of application, thus allowing the application of a zero-rate duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
Scope and Application
The Tariff Concession Instrument No. 0613892 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods imported into Australia. This instrument specifically concerns skeletal cements, a category of goods that are eligible for tariff concessions provided no substitutable goods are produced in Australia. The instrument is made by the Chief Executive Officer of Customs and comes into effect from the date the application was lodged, which is 21 August 2006 in this instance. The geographic reach of this instrument is national, as it pertains to the importation of goods into Australia and the associated customs duties. The instrument does not impose any liabilities on persons other than the Commonwealth and does not affect any existing rights of non-Commonwealth persons as at the date of registration. The application of this instrument can be extended or restricted through subordinate instruments, although no such extensions or restrictions are noted in this particular case.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods. According to section 269F, any individual or entity may apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding particular goods. The CEO, after ensuring that the goods are not specified in section 269SJ, which lists goods ineligible for TCOs, must assess whether the application meets the core criteria set out in section 269C. The core criteria are satisfied if, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
Entities and individuals who apply for a TCO are required to meet these criteria to ensure that their application is considered legitimate. Section 269P(3) stipulates that if the CEO is satisfied with the application, they must issue a written order, the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. In the case of Stryker Australia Pty Ltd's application for a TCO concerning certain skeletal cements, the CEO issued TCO No. 0613892 on 10 November 2006, declaring that the skeletal cements in question were subject to the conditions outlined in item 50 of Schedule 4 to the Tariff, thereby setting the duty rate at free, down from the general rate of 5%.
Upon accepting a valid TCO application, the CEO must, as per subsection 269K(1), publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made. In this instance, the CEO did not receive any submissions. Furthermore, as per subsection 269S(1), the TCO is deemed to have come into effect on the day the application was lodged, which in this case was 21 August 2006. Importantly, the TCO does not disadvantage any person other than the Commonwealth nor does it impose any liabilities on any person regarding actions taken before the registration date. Importers of these goods will have their rights positively affected, as they can apply for a refund of duty paid on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.