EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619717
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.
Procare Health applied for a TCO in respect of certain motorised disabled beds on 14 December 2006.
Instrument
TCO No 0619717 was made on 09 March 2007. It declares that those certain motorised disabled beds 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. 0619717 is taken to have come into force on 14 December 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, provides a framework for the administration of customs and excise in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs) which offer reduced rates of customs duty on specific goods, provided they meet certain criteria. The problem or gap this legislation addresses is the potential for high customs duties to impede the importation of goods that are not produced domestically, thereby potentially increasing costs for consumers and businesses. The policy objective of this legislation is to facilitate the import of goods that are not produced in Australia by reducing customs duties, thus encouraging competition and potentially lowering prices. In the case of Tariff Concession Instrument No. 0619717, the Australian Government, through the Chief Executive Officer of Customs, has applied a TCO to certain motorised disabled beds, effectively setting their customs duty rate to free. This instrument was introduced to ensure that such essential medical equipment is accessible and affordable for Australians.
Scope and Application
The Tariff Concession Instrument No. 0619717, established under Part XVA of the Customs Act 1901, applies to persons or entities seeking tariff concessions for specific goods. This legislation is designed to facilitate the application process for a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs. The instrument came into effect on 14 December 2006, the date the application was lodged by Procare Health for certain motorised disabled beds, and applies nationally across Australia. The core criteria for approval of a TCO include the absence of substitutable goods produced in Australia on the day the application was lodged, ensuring that the concession is granted where no domestic alternatives exist. The instrument exempts the goods in question from the general rate of duty, which is 5%, and imposes no additional liabilities on individuals or entities, thereby benefiting importers who can apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0619717 under the Customs Act 1901 (section 269F) pertain to the application process for Tariff Concession Orders (TCOs). When a person applies for a TCO for certain goods, the Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria outlined in section 269C. If the CEO determines that the goods are not specified in section 269SJ and no substitutable goods were produced in Australia on the date the application was lodged (section 269P(3)), the CEO must issue a written order, which is the TCO. This order specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, in this case, reducing the duty rate to zero for certain motorised disabled beds.
The Act imposes several obligations on the parties involved. The CEO must review the TCO application to ensure it meets the core criteria and that the goods in question are not listed in section 269SJ. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). If no submissions are received, the CEO proceeds to issue the TCO. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). The Act also ensures that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's registration.
Breaching the requirements of the Customs Act 1901 can lead to civil or criminal consequences. While the explanatory statement does not specify the penalties for non-compliance, breaches of customs legislation generally attract significant fines and, in some cases, imprisonment. The severity of the penalty depends on the nature and extent of the breach. For example, knowingly making a false statement in a customs document or providing misleading information to the CEO can result in penalties up to $11,000 or imprisonment for up to two years, or both, under section 284 of the Act. These provisions underscore the importance of adhering to the legislative requirements governing TCOs.