EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703430
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.
Universal Biosensors Pty Ltd applied for a TCO in respect of certain singulation machines on 02 March 2007.
Instrument
TCO No 0703430 was made on 25 May 2007. It declares that those certain singulation machines 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. 0703430 is taken to have come into force on 02 March 2007.
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 Tariff Concession Instrument No. 0703430 was enacted in 2007 to address the specific needs of Universal Biosensors Pty Ltd for a tariff concession on certain singulation machines. This instrument was developed under Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on goods not produced in Australia. The policy objective of this legislation is to support Australian businesses by reducing the cost of importing certain goods that are not domestically produced, thereby encouraging competitiveness and economic efficiency. The instrument was introduced by the Commonwealth Government through the Customs Act 1901 and does not disadvantage any person or impose liabilities on individuals other than the Commonwealth. It ensures that importers of the specified goods can apply for a refund of any duty paid since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concession orders for specific goods, allowing for reduced customs duties under certain conditions. The Act specifically concerns itself with the process by which the Chief Executive Officer of Customs assesses and grants Tariff Concession Orders (TCO) for goods that are not produced domestically, thereby qualifying for lower duty rates. The geographic and jurisdictional reach of this Act is national, as it is a Commonwealth Act, applying across Australia. Excluded from this concession are goods specified under section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The application of the Act may be further defined or restricted through subordinate instruments such as regulations and orders, although the primary legislation itself lays out the core criteria and processes for TCO applications. The explanatory statement for Tariff Concession Instrument No. 0703430 illustrates this process in practice, detailing how a TCO was granted for certain singulation machines, resulting in a duty-free rate for these goods.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) include sections 269C, 269B, 269E, 269D, and 269F (section 269C). Section 269C stipulates that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," while section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269P(3) requires the CEO to issue a written order if satisfied that the application meets the core criteria.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure that their application is not for goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO (section 269F). Secondly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Once the CEO receives an application, they must decide whether it meets the core criteria as outlined in section 269C. If the CEO is satisfied, they must issue a TCO declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
Breaches of the provisions of the Customs Act 1901, including the provisions relating to TCOs, can lead to various civil and criminal consequences. Although the explanatory statement does not specify penalties for breaches directly related to TCOs, general penalties for breaches of the Customs Act can include fines and imprisonment. The specific penalties depend on the nature and severity of the breach, as outlined in other sections of the Act and related legislation. For instance, under section 229 of the Customs Act, a person who contravenes a provision of the Act may be liable to a penalty of up to 10,000 penalty units, which currently equates to AUD 1,700,000, or imprisonment for up to five years, or both, for a serious contravention. The Act also allows for civil penalties, including fines, which can be more severe for repeat or deliberate breaches.