EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509429
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.
Cerium Optical Australia Pty Ltd applied for a TCO in respect of certain opthalmic lens protection tape on 14 July 2005.
Instrument
TCO No 0509429 was made on 23 September 2005. It declares that the certain opthalmic lens protection tape is a product 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. 0509429 is taken to have come into force on 14 July 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 was enacted by the Commonwealth Parliament to provide for the regulation of customs and excise. The Act includes provisions for the imposition of customs duty on imported goods and establishes a framework for tariff concession orders. The Tariff Concession Instrument No. 0509429, enacted in 2005, was introduced to address the specific need to provide tariff concessions for certain goods, in this instance ophthalmic lens protection tape, where no substitutable goods are produced in Australia. This instrument facilitates a reduction in customs duty for the specified goods, benefiting importers by potentially reducing their duty costs and aligning with the broader policy objective of supporting Australian businesses by ensuring they do not face undue competition from domestically produced alternatives.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation allows for the application of lower rates of customs duty on goods that are the subject of a TCO. A TCO can be applied for by any person under section 269F of the Act, provided the goods do not fall under the exclusions specified in section 269SJ. The CEO must ensure that the application meets the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E of the Act. If these criteria are met, the CEO issues a written TCO, specifying the lower duty rate for the goods as outlined in Schedule 4 to the Customs Tariff Act 1995. The TCO applies nationally and its scope can be extended through subordinate instruments. In the case of TCO No. 0509429, the CEO determined that certain ophthalmic lens protection tape qualified for a tariff concession, resulting in a duty rate of free, down from the general rate of 5%. This order came into effect on the date the application was lodged, 14 July 2005. The process included a public notification period for submissions, though none were received in this instance.
Key Provisions
The Tariff Concession Instrument No. 0509429 is established under the Customs Act 1901 and applies to certain ophthalmic lens protection tape, providing a tariff concession to reduce the customs duty from the general rate of 5% to free (sections 269C, 269P, and 269S). The instrument was made following an application by Cerium Optical Australia Pty Ltd on 14 July 2005 and was declared effective from the same date (subsection 269S(1)). The key requirement for the Chief Executive Officer of Customs (CEO) to grant such a concession is that, on the date the application was lodged, no substitutable goods were produced in Australia (section 269C). In this case, the CEO was satisfied that no such goods were produced, leading to the concession being granted.
The obligations imposed by the Customs Act 1901 on the CEO include accepting a valid application for a Tariff Concession Order (TCO) and publishing a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. The CEO must also ensure that the TCO does not affect the rights of any person (other than the Commonwealth) in a way that disadvantages them or imposes liabilities in relation to actions taken before the TCO was registered (subsection 269S(2)). The Act also requires that importers can apply for a refund of duty on goods imported since the TCO came into force, which is beneficial to them (paragraph 126(1)(r) of the Regulations).
Breaches of the provisions under the Customs Act 1901 can lead to civil or criminal consequences. While specific offences, penalties, or maximum penalties are not detailed in the explanatory statement, it is clear that any failure to comply with the terms of the TCO or the requirements set out in the Customs Act 1901 could result in legal action. For instance, making a false statement in an application for a TCO could lead to criminal charges, while failure to pay the correct duty on goods could lead to civil penalties. The exact nature and severity of these penalties would be determined by the specific breach and the applicable sections of the Customs Act 1901 and related regulations.