EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933807
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.
Multigate Medical Products applied for a TCO in respect of certain pouches on 10 September 2009.
Instrument
TCO No 0933807 was made on 27 November 2009. It declares that those certain pouches 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 10%. 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. 0933807 is taken to have come into force on 10 September 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. 0933807, enacted under the Customs Act 1901, was introduced to address the issue of facilitating lower rates of customs duty on specific goods that meet certain criteria. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce customs duty on goods not produced in Australia in the ordinary course of business. Multigate Medical Products applied for a TCO on certain pouches, which was subsequently approved on 27 November 2009, resulting in the pouches being subject to a zero rate of duty instead of the general 10% rate. The policy objective of the instrument is to ensure that the rights of importers are beneficially affected and that no liabilities are imposed on any person other than the Commonwealth, while allowing importers to apply for duty refunds on goods imported since the TCO took effect on 10 September 2009. The process included a public consultation period with no submissions received.
Scope and Application
The Tariff Concession Instrument No. 0933807 is an instrument made under Part XVA of the Customs Act 1901, which allows for the application of lower rates of customs duty on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity that wishes to import goods into Australia, provided that the goods are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The scope of the Act extends across Australia, affecting all states, territories, and the Commonwealth. The Instrument No. 0933807, made on 27 November 2009, specifically applies to certain pouches for which Multigate Medical Products applied for a TCO on 10 September 2009. The CEO's decision to issue this TCO was based on the absence of substitutable goods produced in Australia on the date of the application, satisfying the core criteria outlined in the Act. The TCO does not impose any new liabilities and does not affect the rights of persons as at the date of registration, although it does benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force. The application process and effects of the TCO are further detailed and regulated through subordinate instruments, ensuring compliance and the proper administration of the scheme.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0933807 (the Instrument) under the Customs Act 1901 (the Act) include sections 269C, 269B, and 269P(3) (subsection 269K(1) also being relevant). Section 269C requires that an application for a Tariff Concession Order (TCO) meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets the core criteria, a written order declaring the goods subject to the TCO must be made. Subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
The Act imposes several obligations and requirements on the parties it governs. The CEO must ensure that applications for TCOs are assessed against the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia on the date of the application. The CEO must also publish a notice in the Gazette inviting submissions, as required by subsection 269K(1). Furthermore, the CEO must make a written order if the application meets the criteria, as stipulated in section 269P(3). Importers, on the other hand, must apply for a refund of duty on goods imported since the TCO came into force, as permitted under paragraph 126(1)(r) of the Regulations.
The Act does not specify any offences, penalties, or civil/criminal consequences for breach in relation to the making of a TCO. However, the validity of a TCO can be challenged if the CEO has not properly assessed an application against the core criteria. Any party adversely affected by a TCO can potentially bring a legal challenge to the decision-making process. Additionally, any person who has not complied with the requirements of the Act or the Regulations may face administrative actions or penalties under other relevant sections of the Act or other applicable legislation. The maximum penalties for breaches of customs laws can be significant, including fines and imprisonment, depending on the severity and nature of the offence.