EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929622
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.
Beckman Coulter Australia applied for a TCO in respect of certain bladder bags on 12 August 2009.
Instrument
TCO No 0929622 was made on 06 November 2009. It declares that those certain bladder bags 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. 0929622 is taken to have come into force on 12 August 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 Australian Parliament, governs the administration of customs and excise in Australia. The Act, through its Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on specific goods. Introduced to address the need for tariff concessions to support Australian industry by facilitating access to goods that are not produced domestically, TCOs play a critical role in mitigating the economic impact of high tariffs on certain imports. The policy objective behind the introduction of TCOs is to encourage the production of goods within Australia while also ensuring that businesses can access necessary imports at a reduced duty rate when no domestic alternative exists. This mechanism is designed to foster a balanced trade environment that supports both local manufacturing and the competitive pricing of goods in the Australian market.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods for which an application is made and approved, thereby granting a lower rate of customs duty to those goods. The Act applies to any person or entity that seeks to import goods eligible for tariff concessions and to the goods themselves, provided they meet the criteria specified in the Act, such as the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, operating within the framework of Australian customs regulations. Notably, certain goods, as outlined in section 269SJ of the Act, are excluded from being subject to TCOs. The application and effect of TCOs can be extended or clarified through subordinate instruments, which may provide further detail on the process and eligibility criteria for such concessions. Importantly, the Act ensures that the implementation of a TCO does not disadvantage any person other than the Commonwealth or impose new liabilities on them for actions taken prior to the TCO's effective date.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0929622 are sections 269C, 269F, 269K, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for goods, provided these goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a TCO. Section 269K requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person to submit reasons why the TCO should not be made. The TCO is deemed to come into force on the day the application was lodged, as per section 269S.
The obligations imposed by this Act on the parties involved are mainly on the CEO of Customs and the applicant. The CEO must carefully assess each TCO application to ensure it meets the core criteria outlined in section 269C. This involves confirming that no substitutable goods are produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette, as required by section 269K, and consider any submissions received in response to this notice. The applicant, in this case, Beckman Coulter Australia, must provide all necessary information and evidence to support their application for a TCO, ensuring that the goods in question meet the criteria for a concession.
Under the Customs Act 1901, failure to comply with the requirements for making a TCO, or providing false information in an application, could lead to legal consequences. While the Act does not explicitly state civil or criminal penalties for breaches related to TCOs, general provisions in the Act may apply. For instance, section 238 of the Act provides for penalties for making false statements or documents, which could include fines or imprisonment. Additionally, the CEO may face administrative penalties for failing to perform their duties under the Act. However, specific penalties for TCO-related breaches are not detailed in the explanatory statement.