EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516779
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.
Visy Paper Pty Ltd applied for a TCO in respect of certain optical sorters and detectors on 08 December 2005.
Instrument
TCO No 0516779 was made on 03 March 2006. It declares that those certain optical sorters and detectors 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. 0516779 is taken to have come into force on 08 December 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 Tariff Concession Instrument No. 0516779 was enacted in 2006 under the Customs Act 1901, addressing the need to facilitate the importation of specific goods by reducing customs duty rates. This legislation allows for tariff concessions to be applied to certain goods, providing economic benefits to businesses and consumers by lowering the cost of importing specific products into Australia. The instrument was introduced to address the gap where certain goods, such as optical sorters and detectors, were subject to higher customs duties, potentially hindering their affordability and availability in the domestic market. The instrument was created by the Chief Executive Officer of Customs, following an application by Visy Paper Pty Ltd and after satisfying the core criteria outlined in the Customs Act, such as ensuring no substitutable goods were produced in Australia. This measure aims to support the competitive landscape of the Australian market by making imported goods more cost-effective.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that may benefit from a tariff concession, effectively reducing the customs duty on specified items. The geographic reach of this Act is national, as it applies across Australia under Commonwealth legislation. The Act does not apply to goods specified in section 269SJ, which outlines those that cannot be subject to a TCO. The application process involves meeting core criteria, such as the absence of substitutable goods produced in Australia, as defined in the Act. The Tariff Concession Instrument No. 0516779, made on 03 March 2006, exemplifies the application of this legislation, declaring certain optical sorters and detectors to be subject to a TCO, thereby setting their customs duty rate to free, down from the general rate of 5%. The Act also mandates consultation with interested parties, although in this instance, no submissions were received. The TCO does not retroactively disadvantage any person or impose new liabilities, and it positively impacts the rights of importers by allowing them to apply for a refund of duty on imports since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0516779, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain optical sorters and detectors. Section 269P(3) (referenced in the explanatory statement) dictates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a TCO meets the core criteria, they must issue a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For these goods, the general rate of duty is 5%, but the rate for the goods subject to the TCO is free. This concession applies as of the date the application was lodged, in this case, 08 December 2005.
The Act imposes several obligations on the parties involved. For instance, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their views. In this instance, no submissions were received in response to the published notice.
Failure to comply with the requirements set forth in the Customs Act 1901 can result in legal consequences. While specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally carry significant fines and potential imprisonment under the Crimes Act 1914. The maximum penalties can vary depending on the severity of the offence, but they often include substantial financial penalties and/or custodial sentences. Importers and other stakeholders should be aware of these potential consequences to ensure compliance with the Act and its associated regulations.