EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944416
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.
BOC Ophthalmic Insruments applied for a TCO in respect of certain ophthalmic floor units on 23 November 2009.
Instrument
TCO No 0944416 was made on 26 February 2010. It declares that those certain ophthalmic floor units 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. 0944416 is taken to have come into force on 23 November 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, established a framework for the regulation of customs and excise duties, including the ability to grant tariff concessions to importers of specific goods. The problem this legislation addresses is the facilitation of access to certain goods at reduced customs duty rates, thereby encouraging imports and potentially lowering costs for businesses and consumers. Specifically, the Act provides for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods where no substitutable goods are produced in Australia. The policy objective of this Act is to ensure that businesses have access to competitively priced goods, which can drive economic growth and benefit consumers. BOC Ophthalmic Instruments' application for a TCO in respect of certain ophthalmic floor units exemplifies the application of this legislative framework to reduce the duty on these goods from 5% to free, effective from 23 November 2009, with no objections received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0944416, made under the Customs Act 1901, applies to specific goods, in this case certain ophthalmic floor units, for which a Tariff Concession Order (TCO) has been approved by the Chief Executive Officer of Customs. The primary purpose of this legislation is to provide a lower rate of customs duty on these goods, effectively making them duty-free, provided the application for a TCO meets the core criteria stipulated in the Act. The TCO specifically pertains to goods applied for by BOC Ophthalmic Instruments on 23 November 2009, and it came into force on the same date. The application of this legislation is limited to the scope of goods outlined in the TCO and does not affect any existing rights or impose liabilities on persons other than the Commonwealth. Notably, the Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs. Furthermore, the Act extends its reach through subordinate instruments, which may provide additional details or criteria for the application of TCOs.
Key Provisions
The main operative sections of this legislation (sections 269C, 269B, 269D, 269E, 269P(3), and 269K(1)) detail the process and criteria for the creation and implementation of a Tariff Concession Order (TCO). Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined by sections 269B, 269D, and 269E, which explain the meanings of terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order declaring that the goods the subject of the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations imposed by this legislation primarily concern the CEO of Customs, who must ensure that any TCO application meets the core criteria. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission opposing the TCO. If no submissions are received, the CEO must proceed with making the TCO. This process ensures transparency and allows for public input, though in the case of TCO No. 0944416, no submissions were received.
The legislation also sets out the commencement of the TCO. According to subsection 269S(1), a TCO is taken to have come into force on the day the application for the TCO was lodged. This means that the rights of importers are beneficially affected from the date of the application. Importers can apply for a refund of duty on goods imported since the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) as at the date of registration in a way that would disadvantage that person or impose liabilities in respect of anything done or omitted before the date of registration.
Regarding penalties and consequences for breach, the Explanatory Statement does not explicitly detail offences or penalties. However, it is implied that failure to comply with the requirements for a TCO or improper application of the concession could potentially result in legal action or financial repercussions. The specific penalties for such breaches would be determined according to the general provisions of the Customs Act 1901 and related regulations, which could include fines or other sanctions for non-compliance.