EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507510
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.
Mandurah Australia Pty Ltd applied for a TCO in respect of chondroitin sulphate on 17 June 2005.
Instrument
TCO No 0507510 was made on 9 September 2005. It declares that chondroitin sulphate is a product 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. 0507510 is taken to have come into force on 17 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on certain goods. Tariff Concession Instrument No. 0507510, made under the Customs Act, was introduced to address the need for tariff concessions for chondroitin sulphate, a substance used in various medical and nutritional products. The policy objective of the Act, as evidenced by this Instrument, is to facilitate trade by reducing the cost of imported goods where appropriate, ensuring that Australian consumers and businesses are not unfairly burdened by excessive customs duties on goods for which there are no locally produced substitutes. The instrument was made following an application by Mandurah Australia Pty Ltd, and it was effective from the date of application, 17 June 2005, with no submissions opposing the concession being received.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, with a particular focus on the concessions available under Tariff Concession Orders (TCOs). The Act allows the Chief Executive Officer of Customs to issue TCOs that provide a lower rate of customs duty for specified goods, provided the application for such a concession meets the criteria outlined in the Act. Specifically, a TCO can be applied for by any person who meets the conditions stipulated under section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The scope of the Act encompasses all industries and transactions involving the importation of goods that may qualify for a tariff concession. The Act's jurisdiction is Commonwealth-wide, applying across Australia. Certain goods, as specified in section 269SJ, are excluded from the possibility of a TCO, such as those that may affect national security or public health. The Act may be extended or restricted through subordinate instruments, which provide additional details on the application process and eligibility criteria.
Key Provisions
The main operative sections of the Customs Act 1901, specifically part XVA, establish the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO for certain goods, while Section 269SJ excludes certain goods from being subject to a TCO. Section 269C stipulates 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 Section 269B, which clarifies the meanings of 'goods produced in Australia,' 'ordinary course of business,' and 'substitutable goods' in the context of a TCO application. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per Section 269P(3).
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their TCO applications are in line with the criteria set out in Sections 269F and 269C. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties (Section 269K(1)), though the absence of such submissions does not necessarily hinder the process. Furthermore, the CEO must make a decision based on whether the application meets the core criteria and subsequently issue a TCO if the criteria are satisfied. Importers, once a TCO is in effect, have the right to apply for a refund of duty on goods imported since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.
In terms of offences and penalties, the Act does not explicitly state penalties for breaches related to TCOs. However, non-compliance with the terms and conditions of a TCO or failure to adhere to the provisions of the Customs Act 1901 and Customs Tariff Act 1995 may lead to civil or criminal consequences. For instance, providing false information in a TCO application could result in penalties under the relevant sections of the Customs Act, which could include fines or imprisonment. The specific penalties depend on the nature and severity of the breach and would be determined by the court in a criminal case or by the relevant administrative body in a civil case.