EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720092
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.
Eyebiz Laboratories Pty Limited applied for a TCO in respect of certain lens manufacturing and processing line on 26 November 2007.
Instrument
TCO No 0720092 was made on 08 February 2008. It declares that those certain lens manufacturing and processing lines 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. 0720092 is taken to have come into force on 26 November 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. 0720092 was enacted under the Customs Act 1901, with the primary objective of addressing the need for tariff concessions for specific goods. This instrument, issued by the Chief Executive Officer of Customs, aims to facilitate trade by providing lower customs duty rates for certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This concession was applied to certain lens manufacturing and processing lines, reducing the duty rate from 5% to free. The process involved in issuing this concession included an invitation for public submissions, which did not receive any responses. The concession is designed to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the date the concession was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0720092 under the Customs Act 1901 applies to Eyebiz Laboratories Pty Limited, specifically concerning certain lens manufacturing and processing lines. This instrument is concerned with the application of tariff concessions to goods that are not substitutable to any goods produced in Australia in the ordinary course of business. The scope of this legislation is targeted at facilitating the importation of specific industrial equipment by exempting them from customs duty, thereby aiding businesses in reducing their costs and potentially enhancing competitiveness. The instrument’s jurisdictional reach is national, as it pertains to the federal customs laws of Australia. However, it is noteworthy that the Act does not impose any liabilities on individuals or entities other than the Commonwealth, nor does it disadvantage any person by affecting their rights as at the date of registration. The instrument extends its effect prospectively from the date the application was lodged, 26 November 2007, and does not apply retroactively. Any exclusions or exemptions are limited to those specified in section 269SJ of the Act, which details the types of goods ineligible for tariff concessions. This legislative instrument may be further refined or expanded through subordinate instruments, though specifics of such are not detailed in the explanatory statement.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269F, allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C and 269P, they must make a written order that declares the goods subject to the application are those to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This results in the application of a lower rate of customs duty, or in some cases, a duty-free rate, on the specified goods. In this instance, the TCO No. 0720092 pertains to certain lens manufacturing and processing lines, which are now subject to a duty-free rate.
The Act imposes several obligations and requirements on the parties involved. The CEO must determine if an application for a TCO meets the core criteria by assessing whether no substitutable goods were produced in Australia on the day the application was lodged. This determination involves understanding the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as provided in sections 269D, 269E, and 269F of the Act, respectively. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received.
The Customs Act 1901 also outlines the potential consequences for breaches of its provisions. While specific 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 the forfeiture of goods, while criminal penalties can result in imprisonment, depending on the severity of the breach. The Act ensures that the TCO does not affect the rights of persons, other than the Commonwealth, to their disadvantage or impose liabilities for actions taken before the TCO's effective date. However, importers of the affected goods can apply for a refund of duty on goods imported since the TCO's effective date.