EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129195
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.
Getinge Australia Pty Ltd applied for a TCO in respect of certain chamber machines on 26 August 2011.
Instrument
TCO No 1129195 was made on 22 November 2011. It declares that those certain chamber 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. 1129195 is taken to have come into force on 26 August 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 Commonwealth Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued, allowing for lower customs duties on certain imported goods. This legislation was introduced to address the gap in providing tariff concessions on specific goods where no substitutable goods are produced in Australia, thereby promoting economic efficiency and competitiveness. The Act empowers the Chief Executive Officer of Customs to make such orders if certain criteria are met, ensuring that the application of tariff concessions is both fair and beneficial to importers. As part of its policy objective, the Act mandates public consultation on TCO applications to ensure transparency and inclusivity in the decision-making process. This approach helps maintain a balance between supporting Australian production and facilitating the import of goods where no local alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 1129195 is an instrument under the Customs Act 1901, which applies to the concession of customs duty rates for specific goods. This legislation pertains to any person or entity that imports the specified chamber machines, thereby affecting the customs duty obligations for these goods. The geographic reach of this Act is nationwide, operating under the Commonwealth framework, and it specifically applies to the importation of certain goods as outlined in the Tariff Concession Order. Exclusions from this Act include any goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The application of the Act can be further extended or modified through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs. The application for a tariff concession order must meet the core criteria as outlined in sections 269C and 269F, including the absence of substitutable goods produced in Australia.
Key Provisions
The Tariff Concession Instrument No. 1129195 (the Instrument) under the Customs Act 1901 (the Act) provides for a tariff concession order (TCO) for certain chamber machines, as applied for by Getinge Australia Pty Ltd on 26 August 2011. This TCO, made on 22 November 2011, reduces the customs duty on these chamber machines from the general rate of 5% to free. Section 269F (1) of the Act allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, and section 269P(3) mandates that the CEO must make a written order if the application meets the core criteria, which in this case were satisfied because no substitutable goods were being produced in Australia on the day of application (sections 269B and 269C).
Under the Act, any person may apply for a TCO, and the CEO has a duty to consider such applications (section 269F). Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO must proceed with making the TCO. In this instance, no submissions were received, and the TCO was made accordingly. The CEO is also required to ensure that the TCO does not adversely affect the rights of any person as they stood at the date of registration and does not impose any liabilities on any person other than the Commonwealth (subsection 269S(1)).
Breach of the provisions of the Customs Act 1901 can result in both civil and criminal penalties. For example, under section 276 of the Act, any person who contravenes the Act, including the provisions relating to TCOs, may be liable for a penalty. The maximum penalty for a corporation is generally set out in the Crimes Act 1914 and can amount to thousands of dollars, depending on the severity and frequency of the offence. Additionally, individuals found guilty of contravening the Act may face imprisonment, fines, or both. The specifics of these penalties are detailed in the Crimes Act 1914 and related regulations, which provide a framework for enforcement and compliance with customs laws.