EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010974
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.
Universal Biosensors applied for a TCO in respect of certain diagnostic strip web making machines on 03 March 2010.
Instrument
TCO No 1010974 was made on 14 May 2010. It declares that those certain diagnostic strip web making machines 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. 1010974 is taken to have come into force on 03 March 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 regulate and control the importation of goods into Australia, ensuring compliance with customs duties and tariffs. The Act was introduced to address the need for a systematic approach to customs regulation, facilitating international trade while protecting domestic industries. The Parliament of Australia is the enacting body of this legislation, with a policy objective of promoting efficient customs administration and economic growth through tariff regulation. A key feature of the Customs Act is the establishment of the Tariff Concession Orders (TCO) scheme, which allows for the reduction or exemption of customs duties on certain goods under specific conditions, as outlined in the Act. This scheme aims to support Australian businesses by reducing costs associated with importing necessary goods, provided they meet the criteria set forth in the legislation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This Act applies to any individual or entity that seeks to import goods eligible for a reduced rate of customs duty under a TCO. The scope of this Act is national, applying across Australia as it is a Commonwealth Act. The Act allows for the exemption of certain goods from TCOs as specified in section 269SJ. The CEO must consider whether the goods in question are substitutable by products manufactured in Australia and whether they are produced in the ordinary course of business, as defined by sections 269D and 269E respectively. If the CEO determines that the core criteria are met, a TCO is issued, effectively lowering the duty on the specified goods. The application of this Act can be extended through subordinate instruments, allowing for further clarification and specification of the types of goods and industries eligible for tariff concessions.
Key Provisions
The Customs Act 1901, particularly Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which excludes certain goods from TCO eligibility. If the CEO is satisfied that the application does not pertain to excluded goods, they must determine if the application meets the core criteria outlined in section 269C. The application meets these criteria if, on the date of lodgement, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act.
Entities or individuals applying for a TCO must ensure their application complies with these criteria. They must demonstrate that no substitutable goods are being produced domestically, which means goods that can be put to the same use as those specified in the TCO application. The CEO must make a written order if satisfied that the application meets the criteria, as stipulated in section 269P(3). This order specifies the applicable item from Schedule 4 of the Customs Tariff Act 1995 and the resulting duty rate, which in this case is set at zero percent for the specified diagnostic strip web making machines.
Failure to adhere to the provisions of the Customs Act 1901 can lead to various penalties and consequences. Breaches may result in civil or criminal sanctions, although specific penalties are not detailed in the text. It is crucial for applicants and the CEO to comply strictly with the Act's requirements to avoid any adverse legal outcomes. The Act ensures that the rights of persons other than the Commonwealth are protected, and any liabilities imposed by the TCO do not affect actions taken before the TCO's effective date. Importers, however, may benefit from the TCO by applying for a refund of duties paid on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.