EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831633
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.
Olympus Australia applied for a TCO in respect of certain medical workstation trolleys on 18 September 2008.
Instrument
TCO No 0831633 was made on 12 December 2008. It declares that those certain medical workstation trolleys 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. 0831633 is taken to have come into force on 18 September 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. 0831633, enacted under the Customs Act 1901, was introduced to provide a concession on the customs duty applicable to certain medical workstation trolleys imported by Olympus Australia. The Customs Act 1901 facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which allow for a lower rate of customs duty on specified goods. This legislation was designed to address the issue of ensuring that essential medical equipment is available at a reduced cost, thereby making it more accessible to healthcare providers. The policy objective is to encourage the importation of goods that are not produced domestically, ensuring that consumers benefit from tariff concessions without negatively impacting existing rights or imposing new liabilities. The instrument came into effect on the date the application was lodged, 18 September 2008, and it provides a duty-free rate for the specified medical workstation trolleys, down from the general rate of 5%.
Scope and Application
The Customs Act 1901, as amended, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. The Act permits the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on goods not produced domestically, provided certain criteria are met. These criteria include the absence of substitutable goods produced in Australia and the goods not being specified in section 269SJ, which lists those ineligible for TCOs. The TCO's jurisdictional reach is national, applying across Australia. The application process involves publishing notices in the Gazette to invite submissions, as stipulated in section 269K(1) of the Act. Once an application is accepted, the TCO is effective from the date it was lodged, as per section 269S(1). Importantly, the TCO does not retroactively affect the rights of any person, except to the benefit of importers who can claim refunds for duties paid on goods imported since the effective date of the TCO. The Act allows for the extension of its application through subordinate instruments, ensuring its flexibility and applicability to various goods and industries.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through which a lower rate of customs duty can be applied to certain goods. A person may submit an application to the Chief Executive Officer (CEO) of Customs under section 269F to obtain a TCO for specific goods, provided the goods are not those listed in section 269SJ. The CEO must determine if the application meets the core criteria outlined in section 269C. These criteria require that on the date the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are those produced in Australia that can serve the same purpose as the goods in question, including design purposes. If the CEO is satisfied that the application meets these criteria, they must issue a written order in the form of a TCO, specifying that the goods in question fall under a particular item of Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess each application for a TCO based on the outlined criteria. For applicants, it is necessary to demonstrate that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. In the case of TCO No. 0831633, Olympus Australia applied for tariff concessions on certain medical workstation trolleys, and the CEO confirmed that no substitutable goods were being produced in Australia, leading to the issuance of the TCO.
Failure to comply with the provisions of the Act could result in various consequences. While the Act does not explicitly detail offences, penalties, or specific consequences for breaches, the general legal framework of Australia would apply. This could include potential civil or criminal penalties, depending on the nature and severity of the breach. For instance, if an entity were to falsely claim that no substitutable goods were produced in Australia, they could face legal action for misrepresentation or fraud, with penalties ranging from fines to imprisonment, depending on the jurisdiction and specific circumstances of the case. The CEO’s decisions, being administrative in nature, could also be subject to judicial review if deemed to be based on an error of law or unreasonableness.