EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008946
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.
Thermo Fisher Scientific Pty Ltd applied for a TCO in respect of certain climatic testing chambers on 18 February 2010.
Instrument
TCO No 1008946 was made on 30 April 2010. It declares that those certain climatic testing chambers 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. 1008946 is taken to have come into force on 18 February 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, enacted by the Australian Parliament, provides a framework for the imposition and collection of customs duties, including the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for specific goods. These orders allow for a reduction in customs duty rates for goods that meet certain criteria, such as not having a substitutable Australian-produced alternative. The primary objective of the Act, in this context, is to encourage the importation of goods that are not produced domestically by offering tariff concessions. Tariff Concession Instrument No. 1008946 was introduced to provide a concession for certain climatic testing chambers, effectively reducing the duty from the general rate of 5% to free, as there were no substitutable goods produced in Australia. The instrument came into effect on the date the application was lodged, 18 February 2010, and no submissions were received in opposition to the concession, resulting in a favourable outcome for importers who can now apply for refunds of duties paid on such goods since the effective date.
Scope and Application
The Tariff Concession Instrument No. 1008946, issued under the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. This instrument specifically concerns climatic testing chambers, where Thermo Fisher Scientific Pty Ltd applied for a tariff concession order (TCO) on 18 February 2010. The Act mandates that the Chief Executive Officer of Customs must determine if the application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application. If these criteria are met, the CEO issues a written order, as was done in this case on 30 April 2010, effectively granting the tariff concession. The TCO came into force on the date of the application, 18 February 2010, and reduces the duty on these climatic testing chambers from 5% to free, benefiting the rights of importers who can apply for refunds on duties paid prior to the TCO's effective date. The Act does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO was registered.
Key Provisions
The primary operative sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCO) are sections 269C, 269F, 269K, and 269S. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order, as detailed in section 269C. This written order, or TCO, will declare that the goods in question are subject to a lower rate of customs duty specified in the Customs Tariff Act 1995. The CEO must publish a notice in the Gazette, inviting any interested party to lodge a submission if they believe the TCO should not be made, as per section 269K. A TCO is considered to come into force on the day the application is lodged, as stated in section 269S.
The obligations imposed by the Customs Act 1901 on parties and entities it governs, particularly in the context of TCOs, include the requirement for applicants to ensure their applications meet the core criteria. These criteria are defined in section 269C, which stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO has an obligation to publish a notice in the Gazette inviting submissions regarding the TCO application and to consider any submissions received. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities in respect of actions taken before the TCO registration date.
Breaches of the Customs Act 1901 provisions can lead to civil or criminal penalties. However, the Explanatory Statement does not specify penalties for breaches related to TCOs. For general breaches of the Customs Act 1901, penalties can include fines and imprisonment. Civil penalties may also apply, including fines and the requirement to pay back any duties owed. It is important to note that while the Explanatory Statement does not detail specific penalties for TCO-related breaches, the general penalties for breaches of the Customs Act 1901 can include substantial fines and imprisonment terms, reflecting the seriousness of non-compliance with customs regulations.