EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009281
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.
Warsash Scientific applied for a TCO in respect of certain machine guidance micropositioners on 22 February 2010.
Instrument
TCO No 1009281 was made on 30 April 2010. It declares that those certain machine guidance micropositioners 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. 1009281 is taken to have come into force on 22 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 Tariff Concession Instrument No. 1009281 was introduced under the Customs Act 1901 to address the specific issue of providing tariff concessions for certain goods that do not have substitutable alternatives produced in Australia. Enacted by the Australian Parliament, this instrument aims to facilitate smoother importation and reduced customs duty for specified goods, thereby potentially lowering costs and improving accessibility for businesses and consumers alike. The instrument was developed in response to an application by Warsash Scientific for tariff concessions on certain machine guidance micropositioners, where it was determined that no substitutable goods were produced domestically. The Tariff Concession Order, which came into force on the date of the application, effectively reduced the duty rate for these goods from the general 5% to free, contingent on the absence of substitutable goods in Australia.
Scope and Application
The Tariff Concession Instrument No. 1009281, made under section 269F of the Customs Act 1901, applies to specific machine guidance micropositioners as determined by the Chief Executive Officer of Customs. This instrument provides for a tariff concession order, which grants a lower rate of customs duty on the specified goods, reducing it from the general rate of 5% to free, thereby benefiting importers of these goods. The instrument is applicable on a Commonwealth level and is specifically tailored to goods imported into Australia. The application of the tariff concession is contingent upon the CEO's satisfaction that no substitutable goods are produced in Australia, as outlined in sections 269C, 269D, 269E, and 269P of the Act. Additionally, the Act excludes certain goods from being subject to a tariff concession order as specified in section 269SJ. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities, ensuring that no one is disadvantaged by the concession applied retroactively.
Key Provisions
The Customs Act 1901 (the Act) provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) as per section 269F. An applicant can request a TCO for specific goods under section 269F, provided they do not fall under the category of goods specified in section 269SJ. If the CEO is satisfied that the application is valid and meets the core criteria, they are required to issue a TCO under section 269C. The core criteria are met if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as ‘goods produced in Australia’, ‘ordinary course of business’ and ‘substitutable goods’ are provided in sections 269D, 269E and 269F respectively. If the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), as specified in the order, under subsection 269P(3).
The obligations under the Act require an applicant to ensure that the goods in question are not specified in section 269SJ, and that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is required to publish a notice in the Gazette, inviting submissions from any person who considers there are reasons why the TCO should not be made, as soon as practicable after accepting a TCO application as valid under subsection 269K(1). The CEO must also decide whether the application meets the core criteria and issue a TCO if it does.
Breaching the requirements of the Act may result in civil or criminal consequences. However, the explanatory statement does not provide specific information on the offences, penalties, or civil/criminal consequences for breach. It is important to note that the rights of a person (other than the Commonwealth) as at the date of registration will not be adversely affected by a TCO, and the TCO does not impose any liabilities on any person. Importers of the goods in question 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 under paragraph 126(1)(r) of the Regulations.