EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509752
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.
Lipa Pharmaceuticals Ltd applied for a TCO in respect of certain pharmaceutical gelatin capsule base melters on 22 July 2005.
Instrument
TCO No 0509752 was made on 07 October 2005. It declares that those certain pharmaceutical gelatin capsule base melters 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. 0509752 is taken to have come into force on 22 July 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. 0509752, enacted in 2005, is a regulation under the Customs Act 1901, designed to address the issue of tariff concessions for specific imported goods. This regulation was introduced to provide a mechanism for granting tariff concessions where certain goods are imported and no equivalent goods are produced in Australia. The enacting body is the Chief Executive Officer of Customs, who must decide whether an application for a Tariff Concession Order (TCO) meets the core criteria, such as the absence of substitutable goods produced in Australia. The policy objective is to facilitate the import of goods at reduced or free customs duty rates, thereby benefiting importers by potentially lowering their costs and encouraging trade.
In this particular instance, Lipa Pharmaceuticals Ltd applied for a TCO concerning certain pharmaceutical gelatin capsule base melters, and the CEO granted the concession on 7 October 2005, determining that no substitutable goods were produced in Australia. As a result, the duty on these specific goods is reduced from the general rate of 5% to free, effective from the date the application was lodged, 22 July 2005. The regulation ensures that the rights of importers are beneficially affected, allowing them to apply for refunds on duties paid on imports of these goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0509752 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain pharmaceutical gelatin capsule base melters, which are granted a concession on the rate of customs duty from the general rate of 5% to free. This instrument is applicable to any person or entity importing these specific goods into Australia, thereby potentially reducing the financial burden on importers and facilitating easier access to these pharmaceutical inputs. The scope of the Act extends to the Commonwealth, and its application is limited to the goods outlined in the instrument, with no substitutable goods produced in Australia at the time of application. The Act does not affect any rights or liabilities of individuals or entities other than the Commonwealth, ensuring that no pre-existing rights or obligations are adversely impacted by the concession. Any exclusions or exemptions are strictly based on the criteria set forth in the Act, particularly those outlined in section 269SJ, which specifies goods that cannot be subject to a Tariff Concession Order. The instrument does not extend or restrict its application through subordinate instruments but is confined to the specific goods and the circumstances as defined by the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0509752, under the Customs Act 1901, establishes specific provisions for the concession of customs duty on certain goods. According to section 269F of the Act, any person may apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for goods. If the application is deemed valid, the CEO must decide whether it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the criteria are satisfied, the CEO must issue a TCO, as mandated by section 269P(3), specifying that the goods in question are subject to a reduced or free duty as per the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must review the application and ensure that it complies with the core criteria before making a decision. Moreover, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. The CEO must also ensure that the rights of any person are not adversely affected by the TCO, as outlined in section 269S(1). In this case, the CEO did not receive any submissions opposing the TCO, which facilitated its approval.
The Act outlines specific consequences for non-compliance with its provisions. While the explanatory statement does not detail specific offences or penalties under the Customs Act 1901, it is implied that failure to adhere to the conditions set forth for TCO applications could result in legal repercussions. The precise nature of these penalties would be governed by other sections of the Act or related legislation. However, the primary focus of the TCO process is to facilitate duty concessions where appropriate, ensuring that the application process and decision-making criteria are transparent and fair.