EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509607
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 plastic lens polish on 14 July 2005.
Instrument
TCO No 0509607 was made on 23 September 2005. It declares that those certain opthalmic plastic lens polishes 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. 0509607 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, enacted by the Australian Parliament, facilitates the implementation of Tariff Concession Orders (TCOs) through which a lower rate of customs duty is applied to certain goods. This Act addresses the gap in providing relief to businesses that import goods for which there are no locally produced alternatives, thereby supporting competitive imports and potentially lowering consumer costs. The Tariff Concession Instrument No. 0509607, made under the authority of the Customs Act, provides a zero percent duty rate on certain ophthalmic plastic lens polishes, as no substitutable goods are produced in Australia. This legislative instrument was developed to encourage the importation of these goods, benefiting importers by potentially reducing their duty costs and improving access to necessary materials. The policy objective is to foster competitive markets and support the import of goods that are not locally manufactured, thereby enhancing economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) that apply lower rates of customs duty on specified goods. The CEO is mandated to consider applications for a TCO if they meet the core criteria set out in the Act, which require that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. This means that the goods in question must not have an Australian alternative that serves the same purpose, including any design uses. The CEO is also bound by statutory provisions that exclude certain goods from being subject to a TCO, as outlined in section 269SJ of the Act. Once the CEO is satisfied that the application meets the criteria, a TCO is issued, which can alter the customs duty rate for the specified goods. For instance, in the case of Cerium Optical Australia Pty Ltd, the TCO resulted in certain ophthalmic plastic lens polishes being exempt from a general rate of duty of 5%, thus imposing a duty rate of free. The application process includes public consultation, where interested parties can submit objections to the CEO, although in this case, no submissions were received. The TCO takes effect from the date the application was lodged, providing immediate benefits to importers of the specified goods by allowing them to apply for duty refunds on imports since the TCO's effective date.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0509607) are Sections 269C, 269F, 269K, 269P, and 269S, among others, as they govern the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO is satisfied that the application meets the core criteria, as outlined in Section 269C, they must make a written order that declares the goods subject to the TCO. Section 269K mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, while Section 269P outlines the requirements for making the written order. Section 269S specifies the effective date of the TCO, which is the same as the date the application was lodged.
The Customs Act 1901 imposes several obligations on parties involved in the process of applying for and issuing TCOs. The applicant must ensure that the goods in question do not have substitutable goods produced in Australia and that the application complies with the criteria outlined in Section 269C. The CEO has the obligation to review the application, make a determination based on the core criteria, and, if satisfied, issue a written TCO. Furthermore, the CEO must publish a notice in the Gazette to invite submissions and consider any received submissions before making a final decision. Importers and other relevant parties must ensure they are aware of the TCO and can apply for refunds of duty as per the Regulations.
The legislation also outlines consequences for breaches or non-compliance with the provisions of the Customs Act 1901. While the explanatory statement does not explicitly mention specific offences or penalties, it is implied that failure to comply with the requirements for applying for and issuing TCOs, or any other provision of the Act, could result in legal action or administrative penalties. Such penalties could include fines, imprisonment, or other civil or criminal consequences as determined by the relevant authorities. The exact penalties would depend on the nature and severity of the breach, and any applicable laws or regulations at the time.
In summary, the Tariff Concession Instrument No. 0509607 under the Customs Act 1901 outlines the process for applying for and issuing TCOs, which provide tariff concessions for certain goods. The key sections include 269C, 269F, 269K, 269P, and 269S, which outline the criteria for issuing TCOs, the obligations of the applicant and CEO, and the effective date of the TCO. The legislation also implies potential consequences for non-compliance, although specific penalties are not detailed in the explanatory statement.