EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108415
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.
Sarstedt Australia Pty Ltd applied for a TCO in respect of certain centrifuge tubes on 8 March 2011.
Instrument
TCO No 1108415 was made on 24 May 2011. It declares that those certain centrifuge tubes 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. 1108415 is taken to have come into force on 8 March 2011.
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. 1108415, enacted in 2011, amends the Customs Act 1901 by establishing a tariff concession order for certain centrifuge tubes. This legislative instrument was introduced to address the need for tariff concessions in cases where no substitutable goods are produced in Australia, thereby encouraging trade and economic efficiency. The instrument is a response to an application made by Sarstedt Australia Pty Ltd, seeking a tariff concession for the specified centrifuge tubes, which would reduce the duty rate from 5% to free. The enactment process involved scrutiny and consultation, ensuring that the tariff concession aligns with the policy objectives outlined in the Customs Act, including the facilitation of trade and the avoidance of disadvantage to non-Commonwealth entities.
The instrument was brought into force on the date the application was lodged, 8 March 2011, without any adverse impact on existing rights or liabilities. This measure provides relief to importers by allowing them to apply for a refund of duties paid on the specified goods since the effective date of the concession. The process followed under the Customs Act ensures that the tariff concession is both fair and effective, supporting the overarching goal of enhancing trade practices within Australia.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariff concession orders (TCO) through Part XVA, enabling the Chief Executive Officer of Customs to reduce the rate of customs duty on certain goods. The scope of the Act extends to any individual or entity seeking tariff concessions for goods, specifically those that are not produced domestically and do not have substitutable goods in Australia. This process involves an application to the CEO who assesses whether the application meets the core criteria, notably whether substitutable goods are produced in Australia in the ordinary course of business. Once a TCO application is approved, it comes into effect on the date it was lodged, providing tariff concessions from that date. The application of the Act is national, operating under the Commonwealth jurisdiction, and the TCOs can be further defined or modified through subordinate instruments. The explanatory statement specifies that the TCO does not retroactively affect the rights of any person, ensuring that it only benefits parties from the date of the TCO's effective commencement.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269S. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269C sets out the core criteria for the CEO to determine if the application meets the necessary conditions. If the CEO is satisfied that these criteria are met, section 269P requires the CEO to issue a written TCO order. This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question, effectively lowering the customs duty rate.
The obligations and requirements imposed by the Act on parties seeking a TCO include ensuring that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Furthermore, the applicant must demonstrate that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. 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. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, as per subsection 269K(1).
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences or penalties specific to the making or non-compliance of a TCO. However, general provisions within the Act may apply to any misconduct related to customs duties and regulations. Any individual or entity found to be in breach of customs regulations could potentially face civil or criminal penalties, including fines or imprisonment, depending on the severity and nature of the offence. The exact penalties would be determined in accordance with the relevant sections of the Customs Act 1901 and other applicable legislation.