EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934806
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.
Transitions Optical Pty Ltd applied for a TCO in respect of certain spectacle lenses on 16 September 2009.
Instrument
TCO No 0934806 was made on 11 December 2009. It declares that those certain spectacle lenses 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. 0934806 is taken to have come into force on 16 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for tariff concession orders (TCOs) that allow for reduced customs duty rates on certain goods. These concessions aim to support industries by lowering the cost of imported goods, provided no substitutable goods are produced in Australia. The policy objective is to ensure that Australian industries are not unfairly disadvantaged by international competition while fostering a more competitive domestic market. The Act empowers the Chief Executive Officer of Customs to assess applications for TCOs based on specific criteria, such as the absence of substitutable goods produced domestically. The implementation of TCO No. 0934806, effective from 16 September 2009, exemplifies this process by granting free duty on certain spectacle lenses, a decision made following an application by Transitions Optical Pty Ltd and subsequent confirmation by the CEO that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, as amended, provides for the creation of Tariff Concession Orders (TCOs) which can reduce or eliminate customs duty on specific goods, as outlined in the Tariff Concession Instrument No. 0934806. This particular instrument pertains to certain spectacle lenses and applies to any person or entity that imports these goods into Australia. The Act applies at a Commonwealth level and extends its reach across all states and territories of Australia, ensuring a uniform application of tariff concessions. The application for a TCO must be lodged with the Chief Executive Officer of Customs, who will assess whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia. Exclusions apply to goods specified in section 269SJ of the Act, which are not eligible for tariff concessions. The TCO becomes effective on the date the application is lodged, and the rights of importers are beneficially affected, allowing for duty refunds on goods imported since the commencement date of the TCO.
Key Provisions
The Tariff Concession Order (TCO) No. 0934806 made under the Customs Act 1901 (section 269F) applies to certain spectacle lenses for which Transitions Optical Pty Ltd applied on 16 September 2009. The order was issued on 11 December 2009, following the Chief Executive Officer of Customs' (CEO) satisfaction that the application met the core criteria, specifically that no substitutable goods were produced in Australia on the application date (section 269C). As a result, the TCO declares these spectacle lenses to be subject to a zero rate of duty, as opposed to the general 5% duty rate (item 50 of Schedule 4 to the Customs Tariff Act 1995).
Under the Act, the CEO has specific obligations when handling TCO applications. Firstly, the CEO must decide if the application is for goods specified in section 269SJ, which cannot be subject to a TCO. If the application is for eligible goods, the CEO must determine if it meets the core criteria, which involves assessing whether substitutable goods were produced in Australia at the time of application (section 269C). Once the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring the goods subject to the TCO (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person to submit objections to the TCO (subsection 269K(1)). In this case, the CEO did not receive any submissions.
The Act imposes penalties and consequences for breaches related to the making of TCOs. While the specific penalties are not detailed in the provided text, it is understood that violations of the Customs Act or related regulations can result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can include imprisonment, reflecting the seriousness of non-compliance with customs laws. The exact penalties depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act and any subsidiary legislation.