EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139909
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.
Minitube Australia applied for a TCO in respect of certain semen extenders on 30 November 2011.
Instrument
TCO No 1139909 was made on 14 February 2012. It declares that those certain semen extenders 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. 1139909 is taken to have come into force on 30 November 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 Australian Parliament, establishes a framework for the regulation of customs and excise in Australia. Specifically, Part XVA of this Act introduces the concept of Tariff Concession Orders (TCOs), which allow for the application of a lower rate of customs duty on certain goods. This mechanism aims to address the gap in ensuring fair and competitive market practices by preventing the imposition of customs duty on goods for which no substitutable Australian-produced alternatives exist. The Tariff Concession Order No. 1139909, issued on 14 February 2012, is a specific instance where the Chief Executive Officer of Customs granted a concession for certain semen extenders, setting their duty rate to free, thus benefiting importers and aligning with the policy objective of fostering economic efficiency and competitiveness within the market.
Scope and Application
The Tariff Concession Instrument No. 1139909 under the Customs Act 1901 applies specifically to certain semen extenders, where an application was made by Minitube Australia on 30 November 2011. This Act facilitates the application of lower rates of customs duty to goods specified in a Tariff Concession Order (TCO), provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The TCO, once made, applies retroactively from the date of the application, benefiting importers by allowing them to apply for a refund of duties paid on these goods since that date. The geographic reach of this Act is national, as it applies across Australia, and it extends to all entities importing the specified goods. There are no exemptions or exclusions mentioned specifically for this TCO, but section 269SJ of the Act outlines goods that cannot be subject to a TCO, which presumably does not include the semen extenders in question. The CEO's decision on a TCO is final, and the Act does not disadvantage or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO was registered.
Key Provisions
The key operative sections of the Customs Act 1901, specifically as they pertain to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO regarding specific goods. Section 269C outlines the criteria that must be met for the CEO to consider an application, primarily that no substitutable goods are produced in Australia. If the application meets the core criteria, section 269P mandates that the CEO issue a written order, the TCO, applying a specified tariff from Schedule 4 of the Customs Tariff Act 1995. Section 269S determines that a TCO comes into force on the day the application is lodged. These sections work together to facilitate the process of applying for and granting tariff concessions on specific goods.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO are primarily procedural. The applicant must ensure that their application is made in accordance with section 269F and that it does not pertain to goods specified in section 269SJ. The CEO has an obligation under section 269K(1) to publish a notice in the Gazette, inviting any interested party to submit objections to the TCO. If the CEO is satisfied that the application meets the core criteria, they must make a TCO as per section 269P(3). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, as stipulated in section 269S.
The Act outlines specific consequences for non-compliance with its provisions. Under section 269F, if an applicant provides false or misleading information in their application, they may be subject to criminal penalties. The specific penalties are not detailed within this explanatory statement, but generally, penalties for providing false or misleading information can include fines and imprisonment. Additionally, section 269SJ prohibits the application of a TCO to certain goods, and any breach of this provision could result in the nullification of the TCO. For instance, if it is found that substitutable goods were indeed produced in Australia, the TCO could be revoked, and the applicant may face penalties for any misrepresentation.
The Act also provides for administrative measures in case of non-compliance. For example, if an individual or entity fails to meet the criteria for a TCO, or if they provide misleading information, the CEO has the authority to refuse the application. This refusal can be appealed under the Administrative Appeals Tribunal Act 1975. Furthermore, under section 269S, the TCO does not affect the rights of any person in a manner that would disadvantage them or impose liabilities in respect of actions taken before the TCO's effective date. However, any subsequent importation of the goods without the benefit of the TCO could result in the necessity for duty refunds under Regulation 126(1)(r).