EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711815
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 x-ray beamline apparatus housing on 20 July 2007.
Instrument
TCO No 0711815 was made on 12 October 2007. It declares that those certain x-ray beamline apparatus housing 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. 0711815 is taken to have come into force on 20 July 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 Commonwealth Parliament, provides a framework under which the Chief Executive Officer of Customs can grant tariff concession orders (TCOs) that reduce the customs duty payable on specific imported goods. This scheme addresses the problem of ensuring that Australian businesses and industries can access necessary imported goods at a reduced duty rate, which can help lower costs and improve competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 0711815, made under the Act on 12 October 2007, outlines the process by which Major Projects Victoria successfully applied for a TCO for certain x-ray beamline apparatus housing. The CEO of Customs granted the concession after determining that no substitutable goods were being produced in Australia, resulting in a reduction of the duty rate from 5% to 0%. This legislative instrument ensures that the rights of importers are beneficially affected and that no existing liabilities are imposed on non-Commonwealth persons.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation allows for a lower rate of customs duty on specific goods, provided they meet certain criteria. Any person can apply to the CEO for a TCO, but the goods in question must not be specified in section 269SJ of the Act as those ineligible for concession. The CEO must determine if the application meets the core criteria, notably that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, a TCO is issued, as evidenced by TCO No. 0711818 concerning x-ray beamline apparatus housing, where the duty rate was reduced from 5% to 0%. The application of this Act is national, impacting all importers within Australia, and is further detailed through subordinate instruments such as the Customs Tariff Act 1995 and associated regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0711815, which was made under section 269F of the Customs Act 1901 (the Act), involve the application and approval processes for Tariff Concession Orders (TCOs). When an individual or entity applies to the Chief Executive Officer of Customs (CEO) for a TCO (section 269F), the CEO must first determine whether the application is valid and not in respect of goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria as per 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, the CEO must then make a written order declaring that the goods are subject to the specified lower rate of duty (subsection 269P(3)). This particular TCO No. 0711815 applies to certain x-ray beamline apparatus housing, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty of 0%.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application is made in accordance with the Act and that the goods in question meet the specified criteria (section 269C). The CEO, upon receiving a valid application, is obligated to assess whether the application meets the core criteria and to make a written order if satisfied (subsection 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO did not receive any submissions for TCO No. 0711815. Additionally, the Act requires that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail specific offences or penalties related to the failure to comply with the provisions of a TCO. However, breaches of other sections of the Customs Act 1901 may lead to various civil or criminal penalties. For example, wilful contravention of the Act can lead to penalties such as fines, imprisonment, or both, depending on the severity of the offence. In the context of this specific TCO, the main consequence of non-compliance would likely be the failure to benefit from the reduced duty rate, potentially resulting in higher customs duty payments for the affected goods. The Act ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by the TCO.