EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507063
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.
Major Projects Victoria applied for a TCO in respect of certain Synchrotron Parts on 9 June 2005.
Instrument
TCO No 0507063 was made on 21 October 2005. It declares that those certain Synchrotron Parts 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 0%.
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. 0507063 is taken to have come into force on 9 June 2005.
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, provides the legal framework for the administration of customs duties and related matters. One of its key features is the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty on certain imported goods. The primary problem this legislation addresses is ensuring that essential goods, particularly those needed for major projects and technological advancements, can be imported without incurring prohibitive tariffs, thus facilitating economic growth and innovation. The explanatory statement for Tariff Concession Instrument No. 0507063, made on 21 October 2005, outlines that the instrument was introduced to provide a zero percent duty rate on specific Synchrotron Parts, a decision made after considering that no substitutable goods were being produced in Australia at the time. This concession was aimed at supporting Major Projects Victoria in their endeavours, showcasing the policy objective of aiding significant national projects through tariff relief.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) which provide reduced customs duties on certain goods. These orders are made by the Chief Executive Officer of Customs and apply to goods that meet certain criteria, such as being imported and not having substitutable goods produced in Australia. The Act applies to any person who applies for a TCO in relation to eligible goods, ensuring they meet the specified criteria. The geographic and jurisdictional reach of this legislation is Commonwealth, applying across Australia. There are exclusions specified in section 269SJ of the Act, detailing the types of goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995. For instance, Instrument TCO No. 0507063, made on 21 October 2005, lowered the duty on certain Synchrotron Parts from 5% to 0%, effective from 9 June 2005, the date the application was lodged. The TCO does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose liabilities for actions taken before the registration date.
Key Provisions
The main operative sections of this legislation (section 269F) provide that a person may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, and if the application meets the core criteria, the CEO must make a written order declaring that the goods are subject to a lower rate of customs duty. In this case, the CEO was satisfied that the application from Major Projects Victoria for Synchrotron Parts met the core criteria and a TCO was made (section 269P(3)). The TCO declares that the Synchrotron Parts are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, meaning the rate of duty for these goods is 0% (section 269P(3)).
The obligations and requirements imposed by this Act on the parties it governs include the requirement for applicants to ensure that their application for a TCO meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO is required to make a decision on whether the application meets the core criteria and, if satisfied, to make a written TCO (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to this invitation.
Offences and penalties for breach of this Act are not explicitly stated within the provided text. However, it is implied that failure to comply with the requirements of the Act, such as submitting a false application for a TCO, could result in civil or criminal consequences. The maximum penalties for breaches of the Customs Act 1901 can include fines up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment. These penalties may be subject to change based on the specific breach and the discretion of the court.