EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823269
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.
Myfootdr Podiatry Centres applied for a TCO in respect of certain orthopaedic rubber insole milling machine on 25 July 2008.
Instrument
TCO No 0823269 was made on 17 October 2008. It declares that those certain orthopaedic rubber insole milling machine 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. 0823269 is taken to have come into force on 25 July 2008.
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. 0823269, enacted under the Customs Act 1901, was introduced to address the need for concessional tariffs on specific goods where no substitutable goods are produced in Australia. The Act, administered by the Australian Parliament, aims to foster economic efficiency by allowing lower customs duties on certain imported goods, provided they meet the criteria outlined in the legislation. This particular instrument was made in response to an application by Myfootdr Podiatry Centres for tariff concessions on orthopaedic rubber insole milling machines, where the Chief Executive Officer of Customs determined that no equivalent goods were produced domestically. This decision ensures that the importer can benefit from a zero duty rate, effective from the date of the application, while also ensuring that no existing rights or liabilities are adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0823269, established under Part XVA of the Customs Act 1901, applies to any entity or individual seeking a tariff concession order (TCO) for specific goods, ensuring they benefit from a lower rate of customs duty. The instrument primarily concerns importers and producers of goods, specifically targeting those who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. This application process is overseen by the Chief Executive Officer of Customs, who evaluates the eligibility of the goods for a tariff concession based on the criteria outlined in sections 269C, 269B, and 269D of the Act. Notably, the Act excludes certain goods from being eligible for a TCO, as specified in section 269SJ, and this particular TCO applies to orthopaedic rubber insole milling machines, which are subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic and jurisdictional reach of this legislation is Commonwealth-wide, with the application and implementation extending across all states and territories of Australia. The Act ensures that the rights of non-Commonwealth entities are not adversely affected by the TCO, and it allows for the possibility of duty refunds for importers of the specified goods since the date the TCO came into effect.
Key Provisions
The main provisions of Tariff Concession Order No. 0823269, made under the Customs Act 1901, concern the application and granting of tariff concessions for certain orthopaedic rubber insole milling machines (sections 269C, 269P, 269SJ). If an applicant, such as Myfootdr Podiatry Centres, submits an application for a Tariff Concession Order (TCO) and the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a TCO can be made (section 269F). This means that the goods in question, in this case, orthopaedic rubber insole milling machines, will be subject to a lower rate of customs duty, or in some cases, no duty at all, provided no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The TCO also requires that the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)).
The obligations imposed by the Customs Act 1901 on the parties governed by this legislation include ensuring that any applications for a TCO are made in good faith and with all necessary information. The CEO is obligated to review the application and determine whether it meets the core criteria (section 269F). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). Myfootdr Podiatry Centres, as the applicant in this case, must have provided all necessary information and documentation to substantiate their application for the TCO. The CEO, in turn, must ensure that the application is processed in accordance with the provisions of the Customs Act 1901.
The Customs Act 1901 outlines the consequences for any breaches of the Act. Any person who makes a false or misleading statement in an application for a TCO may be subject to penalties. These penalties can include fines or imprisonment, or both, depending on the severity of the breach (section 271). In the case of Tariff Concession Order No. 0823269, no submissions were received in response to the notice published in the Gazette, indicating that there were no objections to the granting of the TCO. As such, no penalties have been incurred by any party in relation to this particular TCO. However, any person who contravenes the provisions of the Customs Act 1901 may be subject to the specified penalties, which can include fines of up to $22,200 for individuals and $111,000 for corporations, as well as potential imprisonment.