EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701601
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 double crystal monochromators on 30 January 2007.
Instrument
TCO No 0701601 was made on 23 April 2007. It declares that those certain double crystal monochromators 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. 0701601 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties, including the ability to issue Tariff Concession Orders (TCOs) under Part XVA. These orders are designed to address the problem of ensuring that certain imported goods are not subject to customs duty if they do not have Australian-made equivalents. This mechanism aims to support industries by making imported goods more competitively priced. In 2007, the Tariff Concession Instrument No. 0701601 was introduced to grant a TCO for certain double crystal monochromators, allowing them to enter Australia duty-free. This was made possible under section 269F, which allows for applications to be made to the Chief Executive Officer of Customs, provided they meet the core criteria outlined in section 269C of the Act. The policy objective behind this concession is to support industry by ensuring that specific imported goods are not burdened with customs duty if they do not have Australian alternatives.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0701601, pertains to the application and implementation of Tariff Concession Orders (TCOs) for specific goods, with the purpose of reducing customs duty on those goods. This legislation applies to any individual or entity that imports goods eligible for a TCO, and it mandates the Chief Executive Officer of Customs to evaluate and approve applications for tariff concessions based on specific criteria, such as the absence of substitutable goods produced in Australia. The Act is a Commonwealth instrument, extending its jurisdiction across Australia and influencing the importation duties on specified goods. Notably, the application of a TCO does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no pre-existing liabilities or disadvantages are imposed on importers or other stakeholders. The TCO in question, which pertains to certain double crystal monochromators, came into effect from the date of the application, 30 January 2007, and provides a duty-free rate for these goods.
Key Provisions
The primary operative sections of this legislation, under Part XVA of the Customs Act 1901, concern Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written order (TCO) as per section 269P(3). This TCO specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, effectively applying a lower rate of duty.
The Act imposes specific obligations on the parties involved. The CEO is obligated to review TCO applications to ensure they meet the core criteria and, if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). Major Projects Victoria, as the applicant, must provide a valid application detailing the goods for which the tariff concession is sought. The CEO’s role is to make a timely and accurate decision based on the information provided and to ensure transparency through the publication process.
Breaches of the conditions set out in the Customs Act 1901 can result in various penalties. While the explanatory statement does not specify offences or penalties directly related to the TCO, general provisions within the Act may apply. For example, making a false statement in a TCO application could be considered an offence under section 269BA of the Act, potentially leading to criminal charges and penalties, including fines up to $22,000 or imprisonment for up to two years, or both. The Act also allows for civil penalties for non-compliance with its provisions, including fines up to the statutory maximum set by the relevant legislation.
The TCO No. 0701601, effective from 30 January 2007, grants a tariff concession on certain double crystal monochromators, applying a zero rate of duty as specified in item 50 of Schedule 4 of the Customs Tariff Act 1995. This concession is contingent on the CEO's determination that no substitutable goods were produced in Australia. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the TCO’s effective date, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth, nor does it disadvantage any person’s rights as of the date of registration.