EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607960
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.
Coopervision Australia applied for a TCO in respect of certain disposable contact lenses on 4 May 2006.
Instrument
TCO No 0607960 was made on 28 July 2006. It declares that those certain disposable contact lenses 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. 0607960 is taken to have come into force on 4 May 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 Tariff Concession Instrument No. 0607960, enacted in 2006, amends the Customs Act 1901 to address a specific gap in the tariff concession scheme for imported goods. This instrument was introduced to provide tariff concessions on certain disposable contact lenses, responding to an application by Coopervision Australia. The Customs Act 1901, managed by the Australian Parliament, includes provisions for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specific goods, provided they meet certain criteria. The objective of this legislation is to ensure that the TCO application process is transparent and allows for public submissions, although in this instance, no submissions were received. The TCO was designed to come into effect from the date of the application, thereby providing immediate benefit to importers of the specified disposable contact lenses by reducing their customs duty from 5% to 0%.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. The Act applies to individuals and entities that may apply for a TCO, particularly importers who stand to benefit from the reduced duty rates on goods specified in the order. The geographic reach of this legislation is national, affecting all entities involved in the importation of goods across Australia. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ, and requires that the goods in question are not substitutable by goods produced in Australia in the ordinary course of business. The explanatory statement for Tariff Concession Instrument No. 0607960 provides a specific example where the CEO granted a TCO for certain disposable contact lenses, reducing the duty rate from 5% to 0%. This order came into force on the date the application was lodged, 4 May 2006, and does not retroactively affect any rights or liabilities of individuals or entities other than the Commonwealth, thereby protecting existing contractual arrangements and obligations.
Key Provisions
The main operative sections of the Customs Act 1901, specifically relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods do not fall under section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. This declaration can result in a lower rate of customs duty on the goods, such as the 0% rate applied to certain disposable contact lenses in TCO No. 0607960.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must assess each application to ensure it meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. This involves verifying that the goods are not readily available domestically and that the application complies with the definitions provided in sections 269D, 269E, and 269F. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from the public, although in the case of TCO No. 0607960, no submissions were received. This process ensures transparency and provides an opportunity for interested parties to voice their concerns.
Should there be any breaches of the Act or non-compliance with the terms of a TCO, various consequences may follow. The Act does not specify explicit penalties for breaches related to TCOs, but general provisions within the Customs Act may apply. For instance, contravening any provision of the Act could lead to criminal charges, resulting in fines or imprisonment, or both. The maximum penalties would depend on the specific nature and severity of the offence. Civil consequences could include financial penalties, confiscation of goods, or other remedies as deemed appropriate by the court.
The Customs Act 1901, as amended, outlines the framework for Tariff Concession Orders and ensures that the process is fair and transparent. By adhering to the statutory requirements and obligations, the CEO can effectively manage the application and issuance of TCOs, thereby providing relief to importers and consumers alike. The legislative scheme aims to balance the interests of all stakeholders while maintaining the integrity of the customs duty system.