EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108417
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 pipette tips on 8 March 2011.
Instrument
TCO No 1108417 was made on 24 May 2011. It declares that those certain pipette tips 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. 1108417 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework under which Tariff Concession Orders (TCOs) can be implemented to provide reduced customs duty rates on specified goods. This was intended to address the problem of ensuring that certain goods, for which no Australian-produced substitutes exist, are subject to lower customs duty rates, thus promoting their availability and affordability in the domestic market. The Tariff Concession Instrument No. 1108417, made on 24 May 2011, is an example of this mechanism in action. It was introduced following an application by Sarstedt Australia Pty Ltd for a TCO concerning certain pipette tips, which was approved by the Chief Executive Officer of Customs. The policy objective is to facilitate the import of goods that are not produced domestically, thereby enhancing market access and economic efficiency. The instrument ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on imports since the TCO's effective date, without imposing new liabilities on any party.
Scope and Application
The Tariff Concession Instrument No. 1108417 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO), as determined by the Chief Executive Officer of Customs (CEO). The instrument is designed to provide a lower rate of customs duty for goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in section 269C of the Act. This concession applies on the basis that no equivalent goods are manufactured domestically, thereby encouraging importation for use or sale within Australia. The scope of the Act extends across the Commonwealth of Australia, with the application of the TCO providing tariff relief to importers of specified goods, while ensuring that no existing rights or liabilities of any person other than the Commonwealth are adversely affected.
The TCO No. 1108417, which came into force on 8 March 2011, pertains to certain pipette tips, which are subject to a duty rate of zero instead of the general rate of 5%. The Act mandates that the CEO must publish a notice in the Gazette, inviting any interested party to lodge submissions if they believe the TCO should not be made; however, in this case, no submissions were received. The TCO does not impose any new liabilities on persons other than the Commonwealth and provides importers with the right to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force. The Act's application is further extended through subordinate instruments, which can specify additional details or conditions related to the concession.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1108417 pertain to the application and determination process for Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they do not fall under the exclusions specified in section 269SJ. The CEO then assesses whether the application meets the core criteria, primarily by confirming that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269P(3). If the criteria are met, the CEO must issue a written TCO.
The obligations imposed by the Act on the parties involved are significant. The applicant, in this case Sarstedt Australia Pty Ltd, must ensure their application for a TCO is valid and meets the criteria set out in the Act. The CEO has the obligation to evaluate the application against these criteria and, if satisfied, to make a TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes the TCO should not proceed to lodge a submission, as stipulated in subsection 269K(1). Failure to comply with these obligations could result in the TCO not being granted, or being subject to legal challenge.
Under the Customs Act 1901, breaches of the requirements or provisions of a TCO could lead to various legal consequences. While the explanatory statement does not detail specific offences or penalties related to TCOs, it is reasonable to infer that breaches of customs legislation generally may lead to civil or criminal penalties. Typically, civil penalties for breaches of customs regulations can include financial penalties, while criminal penalties might involve fines or imprisonment, depending on the severity and intent of the breach. The specifics would be guided by the broader provisions of the Customs Act 1901 and related regulations.