EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617001
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.
Gelflex Laboratories applied for a TCO in respect of certain contact lens manufacturing line parts on 08 September 2006.
Instrument
TCO No 0617001 was made on 01 December 2006. It declares that those certain contact lens manufacturing line parts 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. 0617001 is taken to have come into force on 08 September 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, enacted by the Commonwealth Parliament, provides a framework for the regulation of imports and exports through the imposition of customs duties. A key aspect of this legislation is the ability to grant tariff concession orders (TCOs) to lower the duty on specific goods under certain conditions. This provision addresses the need to support Australian businesses by reducing the cost of importing necessary components and materials, provided these goods are not produced domestically. Tariff Concession Instrument No. 0617001 was introduced to provide a tariff concession for certain contact lens manufacturing line parts, ensuring these essential imports are made more affordable for businesses while maintaining the integrity of the customs duty system. The policy objective of this instrument is to foster economic efficiency by facilitating the import of non-domestically produced goods, thereby supporting industry competitiveness and innovation without imposing additional burdens or liabilities on importers.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Order No. 0617001, applies to goods that are the subject of a Tariff Concession Order (TCO) application. This legislation allows for reduced customs duty rates on specified goods when certain conditions are met, such as when no substitutable goods are produced in Australia in the ordinary course of business. The Act is applicable on a national level across Australia, with the CEO of Customs having the authority to make TCOs. Exclusions to the TCO include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application process for a TCO requires an individual or entity to submit an application to the CEO, who then determines whether the application meets the core criteria outlined in sections 269B, 269C, and 269D of the Act. If the application is deemed valid, the CEO must make a written order declaring that the goods are subject to the specified tariff concession, as outlined in Schedule 4 to the Customs Tariff Act 1995. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. The TCO is effective from the date the application was lodged.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0617001 under the Customs Act 1901 (section 269C) establish the conditions for a Tariff Concession Order (TCO), which allow for a lower rate of customs duty on specified goods. According to section 269F, an application for a TCO can be made by any person to the Chief Executive Officer of Customs (CEO), provided that the goods in question do not fall under the list specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, as defined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, a written TCO is issued under section 269P(3), declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For applicants, such as Gelflex Laboratories, the obligation is to ensure that their application for a TCO is valid and meets the criteria outlined in section 269C. This includes providing sufficient evidence that no substitutable goods are produced in Australia. The CEO, on the other hand, is obligated to assess the validity of the application, make a decision based on the criteria, and issue a TCO if appropriate. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received, indicating that no objections were raised against the TCO.
The Customs Act 1901 also outlines potential consequences for breaches of the legislation or non-compliance with the TCO. However, the explanatory statement does not specify any particular offences or penalties for breaches related to TCOs. It is understood that the Act generally provides for enforcement actions, which could include civil or criminal penalties, depending on the nature and severity of the breach. Typically, penalties for breaches of customs laws can range from fines to imprisonment, but the exact penalties are not detailed in the provided text. The statement does clarify that the TCO does not impose any liabilities on any person and does not disadvantage any rights accrued before the date of registration.