EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922097
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.
Marquet Australia applied for a TCO in respect of certain operating table and transport system on 26 June 2009.
Instrument
TCO No 0922097 was made on 18 September 2009. It declares that those certain operating table and transport system 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. 0922097 is taken to have come into force on 26 June 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the imposition of customs duties and the facilitation of trade through various mechanisms, including Tariff Concession Orders (TCOs). The Act allows for reduced customs duty rates on specified goods, provided certain criteria are met. The objective of this legislative framework is to encourage the import of goods that are not produced domestically by granting tariff concessions, thereby supporting industries and consumers through lower costs. In line with this policy, Marquet Australia applied for a TCO concerning certain operating tables and transport systems on 26 June 2009. Following a review, the Chief Executive Officer of Customs issued TCO No. 0922097 on 18 September 2009, effective from the date of the application, after determining that no substitutable goods were produced in Australia. This decision aligns with the statutory requirements and aims to benefit importers by reducing the duty rate from the general 5% to free, effective from 26 June 2009, without imposing any liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. The application for a TCO can be initiated by any person, provided the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility. The CEO must ensure that the application meets the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO is obligated to make a written order that reduces the customs duty rate on the specified goods. This process was exemplified in Tariff Concession Instrument No. 0922097, where an operating table and transport system was granted a tariff concession, reducing the duty rate from the general 5% to free. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the issuance of a TCO, although importers can benefit by applying for a refund of duty on goods imported since the TCO took effect. The Act extends its application nationally, affecting all industries and entities involved in the importation of goods within Australia.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA provides for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods (s 269F). Section 269C outlines the core criteria for a TCO application, which must be met for the CEO to consider making a TCO. According to section 269C, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The definitions for these terms can be found in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the application (s 269P(3)). For example, TCO No. 0922097 was made on 18 September 2009 for certain operating table and transport systems, with the goods subject to the order being free from the general rate of duty of 5%.
The obligations under this Act require applicants to ensure their applications meet the core criteria, particularly that no substitutable goods were produced in Australia. The CEO is required to publish a notice in the Gazette, inviting submissions from any person who may have reasons to object to the TCO being made (s 269K(1)). Once the application is accepted as valid, the CEO must decide whether to make a TCO based on the information provided and any submissions received. In this instance, no submissions were received in response to the invitation. The TCO, once made, is taken to have come into force on the day the application for the TCO was lodged (s 269S(1)).
The consequences for breaching the provisions of this Act are not explicitly detailed in the provided text. However, any failure to meet the core criteria for a TCO application could result in the CEO not making the order, thereby leaving the goods subject to the general rate of duty. Moreover, the Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the TCO, meaning that the rights of importers will be beneficially affected, such as through the ability to apply for a refund of duty on goods imported since the TCO came into force (Reg 126(1)(r)). There are no liabilities imposed on any person under this Act in respect of anything done or omitted to be done before the date of registration of the TCO.