EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000286
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.
Hospira Adelaide applied for a TCO in respect of certain centrifuges on 04 January 2010.
Instrument
TCO No 1000286 was made on 22 March 2010. It declares that those certain centrifuges 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. 1000286 is taken to have come into force on 04 January 2010.
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 was enacted to provide for the control of customs and the collection of customs duty. One of the key features of the Act is the scheme for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. This was introduced to address the problem of ensuring that certain imported goods could enter Australia at a reduced duty rate if no substitutable goods were produced domestically. The Tariff Concession Instrument No. 1000286 was created following an application by Hospira Adelaide for TCOs on certain centrifuges. After assessing the application and confirming that no substitutable goods were produced in Australia, the CEO made the TCO effective from 4 January 2010, providing a free rate of duty on these centrifuges. This instrument does not affect the rights of any person other than the Commonwealth and allows importers to apply for a refund of duty on goods imported since the commencement date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any individual or entity that seeks to import goods into Australia under circumstances where a TCO can be applied to reduce the rate of customs duty on those goods. The Act mandates that the CEO must consider an application for a TCO only if the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs, and if the application meets the core criteria outlined in section 269C. This involves determining whether substitutable goods are produced in Australia in the ordinary course of business. Once an application is deemed to meet these criteria, the CEO must make a written TCO, as per section 269P(3). The geographic reach of this Act extends to the national level, with the TCO affecting the importation of specific goods across Australia.
The application of this Act is further refined through subordinate instruments such as Tariff Concession Instrument No. 1000286, which specifies the details of the TCO in question, including the types of goods affected and the reduced rate of customs duty. This particular instrument, made on 22 March 2010, applies to certain centrifuges, granting them a free rate of duty as opposed to the general rate of 5%. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, thereby ensuring that only future imports benefit from the reduced duty rate.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1000286, under the Customs Act 1901, involve the granting of tariff concession orders (TCOs) (s 269F). Section 269C mandates that the Chief Executive Officer of Customs (CEO) must make a TCO if the application meets core criteria, specifically if no substitutable goods are produced in Australia on the date the application is lodged (s 269C). The CEO must also ensure that the goods in question do not fall under the prohibitions listed in section 269SJ. Section 269P(3) provides that if the core criteria are met, the CEO must issue a written order (the TCO) indicating the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations imposed by the Act on the CEO and applicants include a thorough assessment of the application to ensure it meets the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be granted (s 269K(1)). The CEO is responsible for considering any submissions received and making a decision based on the merits of the application and the criteria outlined in the Act. Applicants, on the other hand, must provide sufficient evidence to satisfy the CEO that the core criteria are met, including demonstrating that no substitutable goods are produced in Australia.
Breaches of the requirements set out in the Act can result in significant consequences. While the explanatory statement does not specify penalties for non-compliance, it is clear that failure to adhere to the statutory criteria for TCOs can lead to the application being rejected. This could have financial implications for applicants, as they would be subject to the standard duty rates rather than the concessional rates. Additionally, any misrepresentation or provision of false information in the application could potentially lead to further legal consequences, although the specific penalties are not detailed in the provided text. The overall aim is to ensure that the concessions are granted fairly and in accordance with the legislative framework.