EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616001
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.
Advanced Neuromodulation Systems applied for a TCO in respect of certain neurostimulation generators on 25 August 2006.
Instrument
TCO No 0616001 was made on 17 November 2006. It declares that those certain neurostimulation generators 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. 0616001 is taken to have come into force on 25 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 Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) that provide lower rates of customs duty for specified goods. The act aims to address the gap in facilitating the importation of goods that are not produced domestically, thereby encouraging competition and benefiting consumers. The explanatory statement for Tariff Concession Instrument No. 0616001, made in 2006, clarifies the process and criteria for applying for such concessions. In this instance, the instrument grants a concession for certain neurostimulation generators, reducing their duty rate to zero, thereby benefitting importers and aligning with the policy objective of supporting the importation of non-domestically produced goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking a tariff concession on specific goods, which must meet the criteria outlined in the Act. The application process requires that the goods in question are not specified as ineligible in section 269SJ and that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The instrument's geographic reach extends nationally, applying to all entities and individuals across Australia. TCOs, once approved, reduce the customs duty on the specified goods from the general rate to a concessional rate, as illustrated by Tariff Concession Order No. 0616001 concerning certain neurostimulation generators. This particular order came into effect on 25 August 2006, the date the application was lodged. Notably, the legislation ensures that existing rights are protected, and no new liabilities are imposed on persons other than the Commonwealth. The CEO is also mandated to publish notices in the Gazette inviting submissions from interested parties, although in this case, no submissions were received.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269B, 269D, 269E, 269P, and 269SJ (subsection 269K(1) also plays a role). Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning specific goods. If the application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), the CEO must issue a written order (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)).
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their application meets the core criteria, meaning no substitutable goods were produced in Australia on the day of application. The CEO is responsible for reviewing the application and determining whether it meets these criteria. If satisfied, the CEO must make a written TCO (section 269P(3)). The CEO is also mandated to publish a notice in the Gazette as soon as practicable after accepting a valid application, inviting submissions from any interested parties (subsection 269K(1)).
In the case of a breach of the requirements set out in the Act, there are potential civil or criminal consequences. While the Act does not explicitly state penalties for non-compliance, breaches of customs regulations generally can lead to penalties under other sections of the Customs Act 1901 or associated regulations. For instance, knowingly making a false statement or representation in relation to a customs matter can result in penalties, including fines and imprisonment. The severity of the penalty would depend on the nature and extent of the breach, as well as any aggravating factors.
For the specific TCO No. 0616001, the primary focus is on ensuring the goods subject to the TCO do not have substitutable alternatives produced in Australia. The CEO’s role is to assess applications against these criteria and make a decision accordingly. If the CEO fails to adhere to the legislative requirements, it could result in legal challenges or administrative reviews. Additionally, any party found to have misrepresented facts in their application could face penalties under the broader customs legislation. The commencement of the TCO on the date the application was lodged ensures that no person other than the Commonwealth is disadvantaged or imposed upon liabilities in respect of actions taken before the registration date.