EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701500
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 synchrotron beamline parts on 29 January 2007.
Instrument
TCO No 0701500 was made on 23 April 2007. It declares that those certain synchrotron beamline 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. 0701500 is taken to have come into force on 29 January 2007.
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. 0701500, enacted in 2007, operates under the Customs Act 1901 to provide tariff concessions for specific goods. This legislation was introduced to address the gap in the existing tariff framework by allowing the Chief Executive Officer of Customs to apply lower rates of customs duty on goods specified in Tariff Concession Orders (TCOs), provided they meet the core criteria outlined in the Act. The instrument was made to benefit Major Projects Victoria, which applied for a TCO for certain synchrotron beamline parts, leading to a free rate of duty on these goods as no substitutable goods were produced in Australia. The policy objective behind this legislation is to facilitate the import of specific goods by reducing the financial burden on importers, thereby potentially encouraging investment and innovation in targeted sectors.
The instrument was developed through a consultation process where the CEO published a notice in the Gazette inviting any interested parties to submit their views on the application, though no submissions were received. The TCO is effective from the date the application was lodged, and it does not impose any liabilities on any person, including the rights of importers who can apply for a refund of duty on goods imported since the effective date. This approach ensures that the rights of existing stakeholders are not adversely affected while providing a fiscal incentive for the importation of specified goods.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0701500, provides 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. This mechanism is designed to benefit applicants who demonstrate that the goods in question are not substitutable by any products manufactured in Australia, as per the criteria outlined in the Act. The application process involves satisfying core criteria, primarily that no substitutable goods are produced domestically in the ordinary course of business, and subsequently, the CEO must make a written order if these criteria are met. The geographic reach of the Act is national, as it operates under the purview of the Commonwealth and applies to all entities within Australia that are subject to customs regulations. The Act does not specify any exclusions or exemptions beyond those goods that cannot be subject to a TCO as listed in section 269SJ. The application of the Act may be extended or restricted through subordinate instruments, but the primary legislation itself does not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0701500 under the Customs Act 1901 primarily revolve around the establishment and operation of Tariff Concession Orders (TCOs) (sections 269C, 269P(3), 269K(1), and 269S). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, such as that no substitutable goods were produced in Australia in the ordinary course of business (section 269C), the CEO must make a written order (section 269P(3)). The CEO also has an obligation to publish a notice in the Gazette inviting submissions from interested parties if any exist (section 269K(1)). The TCO is taken to have come into force on the date the application was lodged (section 269S).
The obligations imposed by the Act on the parties include the necessity for the CEO to assess whether the application meets the core criteria, such as ensuring that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied, they must issue a TCO, which declares that the goods specified in the application are subject to a lower rate of customs duty or are duty-free (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette, providing an opportunity for interested parties to make submissions (section 269K(1)).
The consequences for non-compliance with the Act include potential civil or criminal penalties. However, the specific offences, penalties, or consequences are not detailed within the provided text. In general, breaches of customs regulations can lead to penalties, including fines and imprisonment, depending on the severity and nature of the breach. For instance, section 228 of the Customs Act 1901 outlines various penalties for contraventions of the Act, including fines of up to $22,000 or imprisonment for up to two years, or both, for individuals, and higher penalties for corporations.