EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413700
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.
Fujifilm Australia Pty Ltd applied for a TCO in respect of certain photographic film chemicals on 16 December 2004.
Instrument
TCO No 0413700 was made on 21 February 2005. It declares that those certain photographic film chemicals 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 3%.
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. 0413700 is taken to have come into force on 16 December 2004.
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 amended to introduce a scheme for Tariff Concession Orders (TCOs) under Part XVA, enabling the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This scheme was enacted to address the problem of ensuring that Australian industries could access imported goods at reduced rates when no suitable local alternatives exist. The Tariff Concession Instrument No. 0413700 was introduced in 2005 in response to an application by Fujifilm Australia Pty Ltd for a concession on certain photographic film chemicals. The policy objective is to facilitate the import of goods where no substitutable Australian-produced goods are available, thereby supporting industry competitiveness and consumer choice. The instrument was registered on 21 February 2005, with the concession applying retroactively to the date of the application, 16 December 2004, without disadvantaging any parties or imposing new liabilities.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs) under Part XVA, applies to individuals and entities that wish to reduce customs duty on certain goods through the application process. The scope of the Act is focused on enabling the Chief Executive Officer of Customs (CEO) to grant lower rates of customs duty to applicants for specified goods, provided these goods meet the criteria of not having substitutable goods produced in Australia and are not restricted by section 269SJ. The geographic reach of the Act is national, as it applies across Australia under the Commonwealth jurisdiction. The TCOs are tailored to specific goods and their respective tariff concessions, with the application process including an opportunity for public consultation. The application is effective from the date it is lodged, and it does not disadvantage any person by affecting their rights as at the date of registration or impose liabilities for actions prior to the registration. The TCOs are further regulated through subordinate instruments, which may provide additional criteria or procedures for the application process.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. If the application is not in respect of goods that cannot be subject to a TCO as outlined in section 269SJ, the CEO must determine if the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, a written order (a TCO) must be made, as provided in section 269P(3). This order declares 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 applies.
The Customs Act 1901 imposes several obligations and requirements on the parties it governs. Firstly, any person who wishes to apply for a TCO must ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must then consider any submissions received and make a decision on whether to issue the TCO. In this case, Fujifilm Australia Pty Ltd applied for a TCO in respect of certain photographic film chemicals, and the CEO made a written order (TCO No 0413700) on 21 February 2005, declaring that these chemicals are goods to which item 50 of Schedule 4 to the Tariff applies.
Under the Customs Act 1901, there are specific offences, penalties, and civil or criminal consequences for breach. However, the Act does not detail penalties for failure to comply with TCO requirements, except that failure to comply with any provision of the Customs Act 1901 could result in penalties under that Act or any other applicable laws. For TCOs, the primary consequence of non-compliance would likely be the failure to benefit from the reduced customs duty rate. In the case of TCO No 0413700, if Fujifilm Australia Pty Ltd or any other importer fails to adhere to the terms of the TCO, they may not be eligible for the reduced customs duty rate on the specified photographic film chemicals. Importers 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, under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.