EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933724
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.
Carl Zeiss Vision Australia Holdings applied for a TCO in respect of certain plastic prescription lens edgers on 10 September 2009.
Instrument
TCO No 0933724 was made on 20 November 2009. It declares that those certain plastic prescription lens edgers 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. 0933724 is taken to have come into force on 10 September 2009.
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. 0933724 was enacted in 2009 under the Customs Act 1901, establishing a framework for Tariff Concession Orders (TCOs) which aim to provide tariff relief for certain goods not produced in Australia. This instrument was introduced to address a gap in the current tariff regime by allowing for the reduction or exemption of customs duties on specified goods, provided that no substitutable goods are produced domestically. The instrument was developed by the Chief Executive Officer of Customs in response to an application from Carl Zeiss Vision Australia Holdings for tariff concessions on certain plastic prescription lens edgers. The policy objective of this instrument is to support the import of goods that are not locally produced, thereby facilitating trade and potentially reducing costs for businesses and consumers.
The instrument was implemented without any objections following a notice published in the Gazette, indicating no contrary submissions were received from interested parties. The TCO came into effect on the date of the application, 10 September 2009, and provides a 5% duty rate on the specified goods, down from the general rate, which benefits importers by potentially allowing them to claim refunds for duties paid prior to the concession date. Importantly, the TCO does not impose any new liabilities or disadvantage existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 0933724, made under section 269F of the Customs Act 1901, applies to the specific goods for which Carl Zeiss Vision Australia Holdings has applied for a tariff concession order (TCO). This Act governs the process by which a person may apply to the Chief Executive Officer (CEO) of Customs for a TCO, which results in a lower rate of customs duty being applied to the goods specified in the order. The application must meet the core criteria set out in section 269C of the Act, particularly that no substitutable goods were produced in Australia on the day the application was lodged. The TCO applies on the day the application was made, as specified by subsection 269S(1) of the Act, which in this case was 10 September 2009. The geographic reach of this Act is national, operating under the Commonwealth jurisdiction. Any person or entity seeking to import the specified goods after the effective date of the TCO will benefit from the reduced customs duty rate of zero, whereas the standard rate for such goods is 5%. This Act does not impose any new liabilities on persons and does not disadvantage anyone's rights as at the date of registration.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0933724, which was made under the Customs Act 1901, involve the creation of a Tariff Concession Order (TCO) for certain plastic prescription lens edgers. Section 269F (1) of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria set out in section 269C of the Act, they must make a written order that declares the goods subject to the TCO application. For the TCO No. 0933724, the CEO was satisfied that the application for plastic prescription lens edgers met the core criteria, which means no substitutable goods were produced in Australia on the day the application was lodged. This resulted in the CEO making a TCO that specifies these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, rather than the general rate of 5%.
The Act imposes several obligations on parties involved with TCOs. Firstly, any person who wishes to apply for a TCO must ensure their application is valid and meets the core criteria, as outlined in section 269C. The CEO is then required to make a decision on the application in accordance with these criteria. Furthermore, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons to the CEO, as required by subsection 269K(1) of the Act. In this case, the CEO did not receive any submissions in response to the notice published for TCO No. 0933724.
The Act also outlines specific offences, penalties, and consequences for breaches related to TCOs. If an individual or entity fails to comply with the requirements of the Act, they may be subject to civil or criminal penalties. However, the specific penalties for breaches are not detailed in the Explanatory Statement for TCO No. 0933724. Generally, under the Customs Act 1901, penalties can include fines and imprisonment for serious breaches, depending on the nature and severity of the offence. It is important to note that while the TCO does not impose any liabilities on any person, it does provide rights to importers, such as the ability to apply for a refund of duty on goods imported since the TCO came into force, as stated in paragraph 126(1)(r) of the Regulations.