EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506866
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.
Australian Pharma Containers Pty Ltd applied for a TCO in respect of certain Glass Phials (Vials) on 6 June 2005.
Instrument
TCO No 0506866 was made on 21 October 2005. It declares that those certain Glass Phials (Vials) 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. 0506866 is taken to have come into force on 6 June 2005.
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. 0506866, made under the Customs Act 1901, was introduced to provide tariff concessions on certain Glass Phials (Vials) for Australian Pharma Containers Pty Ltd. Enacted in 2005, the Instrument was developed in response to the need to encourage the import of specific goods by reducing or eliminating customs duty where no Australian-produced substitutes exist. This legislative measure is administered by the Chief Executive Officer of Customs, who assesses applications against the core criteria specified in section 269C of the Act. The policy objective of this instrument is to foster economic efficiency by facilitating the importation of goods that cannot be produced domestically, thus benefiting importers who can now apply for refunds of duty paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to the regulation of imports and exports in Australia and provides for the creation of Tariff Concession Orders (TCOs) that can lower the duty payable on certain goods. Specifically, under Part XVA of the Act, the Chief Executive Officer of Customs (CEO) is empowered to make TCOs which apply a reduced rate of customs duty to goods specified in the order. An application for a TCO can be made by any person, provided that the goods in question are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The CEO must decide whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The TCO scheme is a Commonwealth matter, with its application extending across all states and territories in Australia. The TCO may be subject to further regulation or clarification through subordinate instruments, but the primary terms are set out in the Act itself. There are no stated exclusions or exemptions within the primary Act regarding who or what the TCO applies to, although certain goods are precluded from being the subject of a TCO under section 269SJ.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, provide the framework for the creation of Tariff Concession Orders (TCOs) as detailed in Section 269F. When an individual or entity applies for a TCO (Section 269F), the Chief Executive Officer of Customs (CEO) must assess whether the application is valid and if the goods in question are not those listed in Section 269SJ, which are ineligible for TCOs. If the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business (Section 269C), they must proceed to make the TCO. The specifics of what constitutes 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are defined in Sections 269D, 269E, and 269B respectively. Once the CEO determines that the application meets the core criteria, a written TCO is issued, as per Section 269P(3), declaring the goods eligible for a reduced customs duty rate.
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for applicants to ensure their goods meet the eligibility criteria for a TCO. The CEO has the obligation to assess each application thoroughly, considering whether substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette (Section 269K(1)) inviting any interested parties to submit objections to the proposed TCO. This notice serves to ensure transparency and allows for public scrutiny before the TCO is issued. Importers, upon the TCO's issuance, have the obligation to apply for duty refunds for goods imported since the TCO's effective date, as stipulated in paragraph 126(1)(r) of the Regulations.
Under the Customs Act 1901, breaches of the conditions set forth for TCOs could result in civil or criminal consequences. For instance, if an entity falsely claims that no substitutable goods are produced in Australia to secure a TCO, they could be subject to penalties for misleading or deceptive conduct. While the Act does not explicitly state maximum penalties for breaches, general provisions in other sections of the Act could apply, potentially leading to fines or imprisonment. Civil penalties may also include financial penalties or compensation for any losses incurred due to the breach. The consequences for non-compliance are significant, emphasising the importance of adherence to the statutory requirements.