EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616091
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 battery charger kits on 25 August 2006.
Instrument
TCO No 0616091 was made on 17 November 2006. It declares that those certain battery charger kits 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. 0616091 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, established a framework for the regulation of customs and border control. This Act, through Part XVA, introduced a scheme for Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods. These orders apply when specific criteria are met, particularly when no substitutable goods are produced in Australia. The objective of this legislative provision is to encourage the importation of goods that are not domestically manufactured, thereby supporting trade and potentially reducing costs for businesses and consumers. On 17 November 2006, Tariff Concession Order No. 0616091 was issued by the Chief Executive Officer of Customs, following an application by Advanced Neuromodulation Systems for certain battery charger kits. This order, effective from 25 August 2006, granted a tariff concession, setting the duty rate for these kits at free, down from the general rate of 5%. No submissions were received in opposition to this order, indicating broad acceptance of its terms.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the administration of customs and excise duties in Australia, and includes provisions for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Specifically, Part XVA of the Act allows for the application of a lower rate of customs duty on goods specified in a TCO. This applies to any person seeking a concession for goods not listed in section 269SJ, which excludes certain goods from TCO eligibility. The CEO must determine if an application meets the core criteria, specifically if no substitutable goods are produced in Australia, as defined by sections 269D and 269E. If the criteria are met, a TCO is issued, setting the duty rate as specified in the Customs Tariff Act 1995. The TCO applies nationally and affects the rights of importers by allowing them to claim refunds for duties paid on goods imported after the effective date of the TCO. The CEO is required to consult by publishing a notice in the Gazette, although no submissions were received for TCO No. 0616091. This TCO came into effect on the date the application was lodged, 25 August 2006, without retroactive impact on pre-existing rights or liabilities.
Key Provisions
The main operative sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, and 269P. These sections set out the criteria that must be met for an application to be considered, define key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," and outline the process by which the Chief Executive Officer of Customs (CEO) must make a written order if the application meets the core criteria (sections 269C and 269P(3)). The process requires the CEO to be satisfied that no substitutable goods are produced in Australia on the day the application is lodged (section 269C), and that the goods the subject of the application cannot be replaced by Australian-produced goods (sections 269B and 269D). If these criteria are met, the CEO must declare that the goods are subject to a lower rate of customs duty as specified in a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by the Act on the parties it governs include the requirement for applicants to ensure that their applications for TCOs meet the core criteria as outlined in the Act. The CEO has the obligation to review applications to determine whether they meet these criteria and to make a decision within the legal framework provided. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO. Importers of goods that are subject to a TCO have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
There are no explicit provisions in the explanatory statement regarding offences, penalties, or civil/criminal consequences for breach. However, failure to comply with the conditions or misapplying for a TCO could potentially lead to disputes or challenges to the validity of the concession, which might require resolution through administrative review or the courts. While the explanatory statement does not detail specific penalties, it is implied that any such breaches could result in the nullification of the TCO, with associated financial implications for the applicant and potentially the Commonwealth if duties were incorrectly remitted or refunded.