EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603278
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.
Sigma Pharmaceuticals Pty Ltd applied for a TCO in respect of certain filter booths on 1 February 2006.
Instrument
TCO No 0603278 was made on 18 April 2006. It declares that those certain filter booths 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. 0603278 is taken to have come into force on 1 February 2006.
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, provides a framework for the imposition of customs duties on imported goods. Part XVA of the Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that apply a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0603278, made under this Act, addresses the specific issue of granting a tariff concession to Sigma Pharmaceuticals Pty Ltd for certain filter booths. This concession was introduced to ensure that no substitutable goods were produced in Australia, thus meeting the core criteria under section 269C of the Act. The policy objective is to facilitate the importation of these goods without imposing additional customs duties, thereby benefiting importers who can apply for a refund of any duties paid before the TCO came into effect.
Scope and Application
The Customs Act 1901, as modified by the Tariff Concession Instrument No. 0603278, pertains to individuals and entities, including businesses and importers, seeking tariff concessions for specific goods entering Australia. The instrument applies to goods that do not have substitutable alternatives produced in Australia and for which a Tariff Concession Order (TCO) can be granted by the Chief Executive Officer of Customs. This concession results in a reduction or waiver of customs duty on the specified goods, such as the filter booths for Sigma Pharmaceuticals Pty Ltd, which were granted a duty-free status under this instrument. The geographic reach of this Act is national, as it applies across all states and territories of Australia, and it does not specify exclusions other than those mentioned in section 269SJ of the Act, which details goods ineligible for TCOs. The instrument itself extends the application of the Customs Act by specifying particular goods eligible for tariff concessions, thereby potentially affecting import duties and trade practices within Australia.
Key Provisions
The Tariff Concession Instrument No. 0603278 under the Customs Act 1901 establishes a tariff concession order (TCO) for certain filter booths, which were applied for by Sigma Pharmaceuticals Pty Ltd on 1 February 2006. The instrument, issued on 18 April 2006, declares that these filter booths are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%. The instrument specifies that the TCO came into effect on the date of the application, 1 February 2006.
The obligations under this Act for the Chief Executive Officer of Customs (CEO) include assessing whether the application meets the core criteria specified in sections 269C and 269P(3) of the Customs Act 1901. This assessment requires the CEO to determine if no substitutable goods were produced in Australia on the day the application was lodged, with 'substitutable goods' defined in section 269D and 'ordinary course of business' in section 269E. If the CEO is satisfied that these criteria are met, they must issue a written TCO. Additionally, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to lodge submissions regarding the TCO application. In this case, no submissions were received.
Breaching the requirements of the Customs Act 1901 can result in various consequences. For example, section 274 of the Act provides for civil and criminal penalties, including fines and imprisonment, for breaches related to the importation of goods. Specifically, section 274(1) outlines that a person who contravenes a provision of the Act can incur a civil penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious breaches. Additionally, under section 274(2), a person who contravenes a provision of the Act that relates to the importation of goods can incur a fine of up to 5,000 penalty units or imprisonment for up to two years, or both, for less serious breaches. These penalties underscore the importance of adhering to the requirements set forth in the Act.