EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914405
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.
Bio Strategy Diet applied for a TCO in respect of certain laboratory robotics on 30 April 2009.
Instrument
TCO No 0914405 was made on 24 July 2009. It declares that those certain laboratory robotics 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. 0914405 is taken to have come into force on 30 April 2009.
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. 0914405, enacted in 2009, is an instrument under the Customs Act 1901 that addresses the need for tariff concessions for specific goods not produced in Australia, thereby facilitating the importation of such goods at a reduced customs duty rate. This instrument was developed in response to an application by Bio Strategy Diet for tariff concessions on certain laboratory robotics, which were not domestically produced at the time of the application. The instrument was enacted by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia and thus met the core criteria for a tariff concession order as outlined in the Act. The policy objective is to support the import of goods that are not produced domestically, allowing for a more competitive market and the availability of specialised goods.
The Tariff Concession Order No. 0914405 was published in the Gazette, inviting submissions from interested parties, although none were received. The order came into effect on 30 April 2009, the date on which the application was lodged. Importantly, the order does not adversely affect the rights of any person, and importers of the specified laboratory robotics are entitled to apply for a refund of duties paid on imports made since the order's effective date. This ensures that the transition to the lower duty rate benefits importers without imposing any new liabilities on them.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0914405, applies to any individual or entity that imports goods into Australia and seeks a tariff concession on those goods. The Act provides a mechanism through which the Chief Executive Officer (CEO) of Customs can grant lower rates of customs duty on goods specified in a Tariff Concession Order (TCO). This mechanism is available for goods not listed in section 269SJ of the Act, which includes goods that are prohibited from being subject to a TCO. The instrument extends to all goods that meet the core criteria, specifically where no substitutable goods are produced in Australia in the ordinary course of business at the time of the TCO application. The instrument has a national reach, applying to imports across Australia. There are no stated exclusions or exemptions within this specific TCO, though the general provisions of the Customs Act may contain other exclusions. The application of the TCO is further extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0914405, are sections 269C, 269P, and 269SJ (subsections 269K(1) and 269S(1)). Section 269C specifies the core criteria that a Tariff Concession Order (TCO) application must meet, ensuring that no substitutable goods are produced in Australia on the day the application was lodged. Section 269P outlines the process for the Chief Executive Officer of Customs (CEO) to make a written order if the application meets these criteria, effectively declaring the goods to which the concession applies. Section 269SJ lists the goods that cannot be subject to a TCO. Additionally, subsection 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions on the application, while subsection 269S(1) stipulates that a TCO comes into force on the day the application was lodged.
The Customs Act 1901 imposes several obligations on the parties it governs. For applicants, the foremost obligation is to ensure their TCO application meets the core criteria outlined in section 269C, specifically that no substitutable goods are produced in Australia. The CEO, on the other hand, must review the application to verify compliance with these criteria and decide whether to issue a TCO. Furthermore, the CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions. Failure to meet these obligations can result in the CEO's refusal to issue a TCO or in legal challenges to the TCO’s validity.
In terms of offences, penalties, and consequences, the Customs Act 1901 does not explicitly state penalties for non-compliance with the TCO provisions. However, breaches of the Act's general provisions, such as submitting false information in a TCO application, could lead to civil or criminal penalties under other sections of the Act. For instance, providing false or misleading information may result in fines or imprisonment. The maximum penalties for such offences vary depending on the specific breach but can include substantial fines and imprisonment terms as prescribed by the Act. It is essential for applicants and the CEO to adhere strictly to the legislative requirements to avoid these potential consequences.