EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618606
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.
Multigate Medical Products Pty Ltd applied for a TCO in respect of certain crepe bandages on 16 November 2006.
Instrument
TCO No 0618606 was made on 9 February 2007. It declares that those certain crepe bandages 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 7.5%. 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. 0618606 is taken to have come into force on 16 November 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 provide a framework for the administration of customs duties and the regulation of imports and exports. The Tariff Concession Instrument No. 0618606, issued in 2007, addresses the gap in the duty rates applied to specific goods by allowing the Chief Executive Officer of Customs to reduce the rate of customs duty on certain goods through Tariff Concession Orders when no substitutable goods are produced in Australia. This was made under the authority granted by the Customs Act 1901, with the aim of facilitating trade and supporting economic activity by lowering the cost of importing specific goods. The instrument was developed following an application by Multigate Medical Products Pty Ltd for tariff concessions on certain crepe bandages, and it was introduced without any adverse submissions, reflecting broad acceptance of the measure's intent to benefit importers.
Scope and Application
The Customs Act 1901 provides a mechanism through which tariff concession orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to allow for a lower rate of customs duty on specified goods. This applies to any person or entity that meets the core criteria for such concessions, which include the condition that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is national, as it is a Commonwealth statute, and applies across all states and territories of Australia. The Act allows for the exclusion of certain goods that cannot be subject to a TCO, as outlined in section 269SJ. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which sets the rates of duty applicable to the goods in question. The explanatory statement for Tariff Concession Instrument No. 0618606 demonstrates the application of the Act to a specific case where Multigate Medical Products Pty Ltd successfully applied for a TCO on certain crepe bandages, reducing the duty from 7.5% to 0%. The process includes a mandatory public consultation period for interested parties to lodge submissions, although in this instance, none were received. The TCO came into force on the date of the application, 16 November 2006, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0618606, under the Customs Act 1901, are sections 269C, 269P, and 269S. Section 269C outlines the core criteria that a Tariff Concession Order (TCO) application must meet, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if these core criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO. Section 269S(1) specifies that a TCO is effective from the day the application is lodged, thus providing immediate tariff benefits to the applicant.
The Act imposes several obligations on the parties involved. The CEO is required to assess the validity of the TCO application against the core criteria specified in section 269C. Upon determining that the application meets these criteria, the CEO must issue a TCO as outlined in section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO, as required by subsection 269K(1). In this case, the CEO did not receive any submissions in response to the notice, indicating that no objections were raised.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in legal consequences. However, the explanatory statement does not explicitly mention any offences, penalties, or specific consequences for breach of the Act in the context of this TCO. The Tariff Concession Instrument No. 0618606 does not impose any liabilities on any person and does not affect the rights of a person, other than the Commonwealth, as at the date of registration. Therefore, the primary focus of the Act in this instance is to ensure that the tariff concessions are granted fairly and in accordance with the stipulated criteria.