EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703435
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 diagnostic strip punchers and splitters on 02 March 2007.
Instrument
TCO No 0703435 was made on 25 May 2007. It declares that those certain diagnostic strip punchers and splitters 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. 0703435 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. 0703435 was enacted in 2007 under the Customs Act 1901, addressing a specific issue regarding the application of customs duty on certain goods. This legislation was introduced to provide a mechanism through which businesses could apply for tariff concessions on goods that are not produced domestically and for which there are no suitable substitutes. The Tariff Concession Orders (TCOs) mechanism was established to provide relief by reducing or eliminating customs duties on such goods, thus encouraging the importation of these items and potentially lowering costs for businesses that rely on them. The enactment of this instrument was overseen by the Chief Executive Officer of Customs, who is tasked with evaluating applications to ensure they meet the criteria set out in the Act. The policy objective behind this legislation is to support Australian businesses by facilitating access to necessary imported goods at reduced tariff rates, thereby enhancing competitiveness and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, as amended and applied through the Tariff Concession Instrument No. 0703435, provides a framework for granting tariff concessions on specific goods imported into Australia. This legislation applies to individuals and entities seeking to import goods that are eligible for a reduced rate of customs duty, provided certain conditions are met. The Act mandates that the Chief Executive Officer of Customs (CEO) must determine if the application for a Tariff Concession Order (TCO) aligns with the core criteria, which include ensuring that no substitutable goods are produced in Australia at the time of application. The scope of the Act is specifically tailored to goods that are not specified as ineligible under section 269SJ and those that do not have local substitutes being produced in the ordinary course of business as defined in sections 269D and 269E. The geographic reach of this legislation is national, affecting all imports subject to customs duty across Australia. The TCO No. 0703435, which came into effect on 2 March 2007, pertains to certain diagnostic strip punchers and splitters, setting their duty rate at free, down from the general rate of 5%. The Act does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, though it does provide for the potential refund of duty for importers of the specified goods.
Key Provisions
The Customs Act 1901 establishes a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (section 269F). When an application is made for a TCO in respect of certain goods, the CEO must determine if it meets the core criteria (section 269C). The core criteria are satisfied if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and section 269E). If these conditions are met, the CEO must issue a TCO (section 269P(3)).
For the TCO No. 0703435, the CEO concluded that the application met the core criteria as no substitutable goods were produced in Australia for the diagnostic strip punchers and splitters in question. This order effectively declares that these goods are subject to a concession, resulting in a zero rate of customs duty, down from the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995). The TCO came into effect on the date the application was lodged, 02 March 2007 (subsection 269S(1)). It is important to note that the TCO does not affect the rights of any person as they stood on the date of registration and does not impose any liabilities on any person.
The CEO is mandated to publish a notice in the Gazette inviting any interested party to submit any objections to the TCO (subsection 269K(1)). In this instance, no submissions were received. The TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
Failure to comply with the obligations and requirements set out in the Customs Act 1901 could result in legal consequences. While the explanatory statement does not specify the exact nature of these consequences, the general provisions of the Act could impose fines or imprisonment for serious breaches. The maximum penalties for contravening the Customs Act can be substantial, often depending on the severity and intent of the offence. Additionally, any party found to be in breach may face civil or criminal proceedings, which could further result in financial penalties or legal sanctions.