EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510612
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.
Galaxy Import & Export Co. Pty Ltd applied for a TCO in respect of certain herbal adhesive plasters on 12 August 2005.
Instrument
TCO No 0510612 was made on 28 October 2005. It declares that those certain herbal adhesive plasters 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. 0510612 is taken to have come into force on 12 August 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. 0510612 was enacted under the Customs Act 1901 to provide relief on customs duty for certain herbal adhesive plasters, responding to an application by Galaxy Import & Export Co. Pty Ltd on 12 August 2005. The instrument was made by the Chief Executive Officer of Customs on 28 October 2005, declaring that these specific herbal adhesive plasters would be subject to a duty-free rate, which contrasts with the general 5% rate. This measure was introduced to ensure that Australian consumers and businesses have access to these goods without the burden of customs duty, provided that no substitutable goods were produced in Australia at the time of the application. The instrument came into effect on the date the application was lodged, ensuring that importers of the affected goods can seek refunds for duties paid before the instrument's effective date.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0510612, pertains to the application and administration of Tariff Concession Orders (TCOs) for specified goods, in this instance, certain herbal adhesive plasters. The Act applies to any person or entity that seeks a TCO for goods, provided those goods are not explicitly excluded under section 269SJ of the Act, which prohibits TCOs for certain goods such as those that are harmful or otherwise restricted. The Act’s jurisdictional reach is national, as it is an instrument under the Commonwealth of Australia, and its application extends to all states and territories within the country. The Act allows for the reduction of customs duty on goods specified in a TCO, provided the Chief Executive Officer of Customs is satisfied that the application meets the core criteria outlined in section 269C of the Act. This involves confirming that no substitutable goods are produced in Australia at the time of the application. The CEO’s decision to grant a TCO is subject to consultation, which includes a public notice in the Gazette inviting submissions from any interested parties, although no submissions were received for TCO No. 0510612. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth and provides beneficial rights to importers, such as the ability to apply for a refund of duty under the Regulations.
Key Provisions
The main operative sections of this legislation concern the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). When an application for a TCO is made, the Chief Executive Officer (CEO) of Customs must assess if it meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the application is deemed valid, the CEO must issue a written order (section 269P(3)). In this instance, TCO No. 0510612 was issued for certain herbal adhesive plasters, which are now subject to a zero rate of customs duty instead of the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Act on parties include the requirement for applicants to ensure their applications are valid and meet the core criteria (section 269C). The CEO is obligated to assess the applications and make a decision based on the criteria set out in the Act. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, allowing the TCO to proceed. The Act also requires that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities (subsection 269S(2)).
Under the Customs Act 1901, breaches of the conditions or requirements set out in a TCO can lead to various consequences. While the explanatory statement does not specify particular offences or penalties for breaching a TCO, it is reasonable to infer that penalties would align with those stipulated elsewhere in the Customs Act 1901 for non-compliance with customs regulations. Typically, penalties for breaching customs laws can include fines and imprisonment, with the severity depending on the nature and extent of the breach. Importers and other affected parties should be aware of these potential penalties to ensure compliance with the terms of any TCO.