EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604025
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 cryostats on 17 February 2006.
Instrument
TCO No 0604025 was made on 28 April 2006. It declares that those certain cryostats 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. 0604025 is taken to have come into force on 17 February 2006.
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 to regulate the import and export of goods in Australia and to collect duties and taxes on imported goods. One of the key features of the Act is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs to provide a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0604025, made under the Customs Act 1901, was introduced to provide a tariff concession for certain cryostats imported by Major Projects Victoria. The instrument was enacted to address the problem of ensuring that essential scientific equipment is available at a reduced cost, thereby facilitating scientific research and development in Australia. The policy objective of the instrument is to provide a tariff concession for goods that are not substitutable by Australian-produced goods and to encourage the import of essential scientific equipment.
The instrument was made by the Chief Executive Officer of Customs after considering an application from Major Projects Victoria and determining that no substitutable goods were produced in Australia in the ordinary course of business. The instrument provides a tariff concession for certain cryostats, reducing the duty on these goods from 5% to 0%. The instrument came into force on the day the application was lodged, 17 February 2006, and does not affect the rights of any person as at the date of registration. Importers of the goods may apply for a refund of duty on goods imported since the day the TCO came into force. The instrument was made without any submissions from interested parties, as no submissions were received in response to a notice published in the Gazette.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to any individual or entity seeking to import goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. A TCO may be granted if the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This concession applies nationally across Australia as per the Commonwealth's jurisdiction. Exclusions under the Act are limited to goods specified in section 269SJ, and the Act does not impose any liabilities on persons other than the Commonwealth. The application of the Act can be extended or restricted through subordinate instruments, as per the legislative framework. In the case of TCO No. 0604025, Major Projects Victoria successfully applied for tariff concessions on certain cryostats, resulting in a reduction of the duty rate from 5% to 0%.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0604025 include section 269C, which sets out the core criteria that an application for a Tariff Concession Order (TCO) must meet. Specifically, the application must demonstrate that no substitutable goods are being produced in Australia on the date the application is lodged (section 269C). This is determined by verifying that there are no goods produced in Australia that can be used in place of the goods in question, where "substitutable goods" are defined by section 269D and "ordinary course of business" by section 269E. Section 269F outlines the process for applying for a TCO, and section 269P(3) mandates that if the application meets the core criteria, the Chief Executive Officer (CEO) of Customs must issue a written TCO.
Under this Act, the CEO has specific obligations when handling a TCO application. These include accepting a valid application, publishing a notice in the Gazette inviting submissions from any interested parties, and considering any submissions received before making a decision (subsection 269K(1)). The CEO must also ensure that the TCO application complies with the requirements of section 269SJ, which excludes certain goods from being eligible for a TCO. Once the CEO is satisfied that the application meets the core criteria, they must make a written TCO specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995, as per section 269P(3).
The Act does not explicitly outline offences or penalties for breaches related to the issuance of a TCO. However, it is important to note that any misuse or non-compliance with the terms of a TCO could potentially lead to civil or criminal consequences under broader customs legislation. For example, deliberately misclassifying goods to benefit from an incorrect tariff concession could result in penalties for false declarations or fraud under the Customs Act 1901 or other relevant legislation. The specific penalties would depend on the nature and severity of the breach, but they could include fines and, in serious cases, imprisonment.