EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514069
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.
Olympus Australia applied for a TCO in respect of certain Underwater Camera Cases on 11 October 2005.
Instrument
TCO No 0514069 was made on 3 January 2006. It declares that those certain Underwater Camera Cases 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. 0514069 is taken to have come into force on 11 October 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 application of tariff concession orders (TCO) that lower the rate of customs duty on specified goods. The Act, particularly Part XVA, enables the Chief Executive Officer of Customs to grant these concessions if certain criteria are met, including the absence of substitutable goods being produced in Australia. This legislative framework addresses the need to provide relief to importers and consumers by reducing the cost of certain imported goods through tariff concessions. The Tariff Concession Instrument No. 0514069, made under this Act, exemplifies the application process, where Olympus Australia successfully applied for a TCO on certain Underwater Camera Cases, resulting in a reduced duty rate from 5% to 0%. This instrument highlights the Act's objective to support economic efficiency and consumer benefits through tariff reductions where appropriate.
Scope and Application
The Customs Act 1901, under Part XVA, establishes the framework within which the Chief Executive Officer of Customs (CEO) may issue Tariff Concession Orders (TCOs) to apply lower rates of customs duty on specified goods. This Act applies to individuals and entities seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business, provided these goods do not fall under the exclusions listed in section 269SJ. The Act’s application is national, operating under the Commonwealth jurisdiction. The CEO must assess whether an application for a TCO meets the core criteria outlined in section 269C, which requires that no substitutable goods are being produced in Australia at the time the application is lodged. Should the CEO determine that the application meets these criteria, they are mandated to issue a TCO, as exemplified by TCO No. 0514069 for certain Underwater Camera Cases, reducing the duty from 5% to 0%. The process includes publishing a notice in the Gazette to invite objections, although no submissions were received for this particular case. The TCO's commencement date aligns with the date the application was lodged, in this case, 11 October 2005, and it does not retroactively affect the rights of any person, only beneficially impacting the rights of importers who can apply for duty refunds for imports made since the TCO's effective date.
Key Provisions
The primary operative sections of this legislation, particularly sections 269C, 269F, 269P(3), and 269S, establish the framework for the creation of Tariff Concession Orders (TCOs). Section 269F outlines the application process for TCOs, requiring an applicant, such as Olympus Australia in this case, to submit an application to the Chief Executive Officer of Customs (CEO). Section 269C specifies the core criteria that the CEO must consider to determine if the application can proceed, primarily focusing on whether no substitutable goods are produced in Australia. If the CEO is satisfied with the application's compliance with these criteria, they are mandated by section 269P(3) to issue a written order (the TCO), which applies a reduced rate of customs duty to the specified goods. This is exemplified by TCO No. 0514069, which applies a 0% duty rate to certain Underwater Camera Cases.
The obligations imposed by this Act on the CEO and applicants are significant. The CEO must ensure that any TCO application is valid and meets the core criteria outlined in section 269C. This includes verifying that no substitutable goods are produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted, as per subsection 269K(1). Olympus Australia, in this context, must ensure their application provides sufficient evidence and justification to meet the criteria specified in the Act.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the provided sections of the Act for breaches related to the TCO process. However, the legal framework ensures that any failure to comply with the stipulated criteria or procedural requirements could result in the rejection of the TCO application. The Act also ensures that the rights of third parties, such as importers, are protected by stipulating that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's effective date. This is further underscored by the provision for importers to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.