EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616287
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.
Sirona Dental Systems applied for a TCO in respect of certain dental autoclave sterilisers on 30 August 2006.
Instrument
TCO No 0616287 was made on 24 November 2006. It declares that those certain dental autoclave 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 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. 0616287 is taken to have come into force on 30 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, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders provide for lower rates of customs duty on certain goods, contingent on specific criteria being met, such as the absence of substitutable goods produced in Australia. This legislative instrument, F2006L03869, addresses the gap by facilitating tariff concessions to promote economic benefits, particularly for importers, without imposing liabilities on individuals or entities. The policy objective is to streamline import processes and support trade by reducing duty burdens on eligible goods, thereby encouraging the importation of products not manufactured domestically. The Explanatory Statement highlights the process by which Sirona Dental Systems successfully applied for a TCO for certain dental autoclave sterilisers, resulting in a zero duty rate for these goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on certain goods. This legislation applies to any individual or entity that seeks to import goods into Australia by providing a mechanism to apply for a TCO from the Chief Executive Officer of Customs (CEO). The application process involves ensuring that the goods in question are not specified as ineligible under section 269SJ of the Act, and that the core criteria outlined in section 269C are met, which requires that no substitutable goods are produced in Australia in the ordinary course of business. The Act defines terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" to clarify the scope of eligibility for a TCO. Once the CEO is satisfied with the application, a TCO is issued, and the specified goods are then subject to the reduced customs duty rates as outlined in the Customs Tariff Act 1995. The process also includes a requirement for the CEO to publish a notice in the Gazette inviting objections to the TCO, although in this case, no submissions were received. The TCO comes into effect on the date the application was lodged, with no retrospective application affecting the rights of any person as at the date of registration.
Key Provisions
The main operative sections of this legislation, particularly section 269F of the Customs Act 1901, allow an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding specific goods. If the application meets the core criteria set out in sections 269C, 269D, and 269E, the CEO must make a written order granting the tariff concession, as stipulated in section 269P(3). This is demonstrated in Tariff Concession Instrument No. 0616287, where Sirona Dental Systems applied for a TCO for certain dental autoclave sterilisers on 30 August 2006. The instrument, which came into force on the same date, declared that these dental autoclave sterilisers are goods to which item 50 of Schedule 4 to the Tariff applies, with a free rate of duty as opposed to the general rate of 5%.
The Act imposes certain obligations on the parties involved. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order granting the tariff concession. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice should include an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failure to comply with the obligations outlined in the Customs Act 1901 may result in civil or criminal consequences. However, the explanatory statement does not specify any particular offences, penalties, or consequences for breach. It is important for parties to adhere to the requirements of the Act and to ensure that any TCO applications submitted meet the core criteria, as failure to do so could result in the CEO not granting the tariff concession. Additionally, the Act ensures that the rights of importers will be beneficially affected, as they may apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.