EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711816
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 parts on 23 July 2007.
Instrument
TCO No 0711816 was made on 12 October 2007. It declares that those certain x-ray 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 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. 0711816 is taken to have come into force on 23 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 Tariff Concession Instrument No. 0711816 was enacted in 2007 as an amendment to the Customs Act 1901, establishing a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislative instrument addresses the need to provide tariff concessions for specific goods, particularly those that are not produced domestically, thereby encouraging import and use of such goods. The instrument was enacted by the Parliament of Australia and aims to facilitate the import of certain goods by reducing or eliminating customs duty, provided the goods are not substitutable by Australian-produced alternatives.
In the specific case of TCO No. 0711816, the instrument was issued in response to an application by Major Projects Victoria for x-ray beamline parts, effective from 23 July 2007. The CEO determined that these parts were not substitutable by Australian-produced goods, thus satisfying the core criteria for a tariff concession. This resulted in a reduction of the duty rate from the general 5% to 0% for these specific goods, benefiting importers by potentially allowing them to apply for duty refunds on imports made since the commencement date of the concession. The enactment of this instrument aligns with the policy objective of fostering economic efficiency and supporting specific projects by reducing the financial burden on imported goods necessary for particular industrial applications.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCO) under which a lower rate of customs duty applies to specific goods. This legislation enables the Chief Executive Officer of Customs to grant concessions on customs duty for particular goods when certain criteria are met, such as when no substitutable goods are produced in Australia. A TCO can be applied for by any person, but the CEO must ensure the application does not relate to goods specified in section 269SJ of the Act which are ineligible for concession. For instance, Major Projects Victoria applied for a TCO concerning certain x-ray beamline parts, which was granted as no substitutable goods were produced in Australia, resulting in a reduced duty rate from 5% to 0%. The application of such orders is subject to national jurisdiction, with the potential to be extended or modified through subordinate instruments. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration, although it may provide benefits such as duty refunds for importers of the specified goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0711816 under the Customs Act 1901 (section 269F) allow for the application for Tariff Concession Orders (TCO) by a person, which can reduce the customs duty rate on certain goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order that specifies the lower duty rate for the goods in question (section 269P(3)). This instrument specifically pertains to certain x-ray beamline parts, setting their duty rate at 0% instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The applicant must ensure their application for a TCO is valid and meets the core criteria, particularly that no substitutable goods are produced in Australia (sections 269C and 269SJ). The CEO is required to publish a notice in the Gazette inviting submissions if the application is accepted as valid (subsection 269K(1)). Furthermore, the CEO must make a decision on the application based on the criteria outlined in the Act, and if satisfied, issue a TCO (section 269P(3)).
Under the Customs Act 1901, there are potential consequences for non-compliance with the provisions of a TCO. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can lead to both civil and criminal penalties. Civil penalties can include fines, and in more severe cases, criminal penalties may apply, including imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any applicable provisions in related legislation.