EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608189
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.
Multigate Medical Products Pty Ltd applied for a TCO in respect of certain sterile protective sheets on 12 May 2006.
Instrument
TCO No 0608189 was made on 04 August 2006. It declares that those certain sterile protective sheets 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. 0608189 is taken to have come into force on 12 May 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 was enacted by the Parliament of Australia to regulate the import and export of goods and to provide for the collection of customs duties. The Act was designed to address the need for a structured approach to customs regulation, facilitating trade while also protecting domestic industries and ensuring revenue collection for the Commonwealth. The Explanatory Statement outlines Tariff Concession Instrument No. 0608189, which was introduced to provide tariff concessions on certain goods, in this case, sterile protective sheets, under specific conditions. The instrument was enacted to ensure that goods for which no substitutable products are produced domestically can benefit from reduced customs duties, thus supporting the policy objective of encouraging the importation of goods that are not locally manufactured. This approach aims to enhance market access and potentially lower costs for consumers and businesses reliant on these imported goods.
Scope and Application
The Tariff Concession Instrument No. 0608189, made under the Customs Act 1901, applies to individuals or entities that seek tariff concessions on specific goods, in this case, sterile protective sheets, from the Chief Executive Officer of Customs. The Act extends to the whole of Australia, applying both federally and within the jurisdictions of states and territories, as it is a Commonwealth Act. The instrument specifies that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria for tariff concession. This means that the application for a tariff concession order (TCO) is valid for the particular goods specified, which in this instance are certain sterile protective sheets. These goods are now subject to a zero rate of duty instead of the general rate of 5%, effective from the date the application was lodged, 12 May 2006. Importantly, this concession does not impose any new liabilities on individuals or entities and does not disadvantage anyone's existing rights, though it does offer potential benefits to importers who can apply for duty refunds on goods imported since the effective date.
Key Provisions
The Tariff Concession Instrument No. 0608189 pertains to the Customs Act 1901 and involves the implementation of a Tariff Concession Order (TCO) for certain sterile protective sheets. Under section 269F of the Act, an application for a TCO can be made by any person to the Chief Executive Officer of Customs (CEO), provided the goods in question do not fall under the category specified in section 269SJ. If the CEO determines that the application meets the core criteria set out in section 269C, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO.
Entities subject to this legislation, such as Multigate Medical Products Pty Ltd, must ensure their applications are thorough and meet the core criteria specified in section 269C. The CEO's obligations include reviewing the application, verifying that no substitutable goods are produced in Australia, and publishing a notice in the Gazette inviting submissions from any interested parties. If no submissions are received, the CEO can proceed to make the TCO, as was done in this instance with TCO No. 0608189 on 4 August 2006.
The TCO itself imposes specific obligations on the parties it governs. For example, the CEO must ensure that the TCO is published and that any submissions are properly considered. Additionally, the TCO does not retroactively affect any rights of individuals, except to the benefit of importers who can now apply for a refund of duty on goods imported since the effective date of the TCO, which is 12 May 2006. It is crucial that all parties understand their rights and obligations under the TCO to avoid any legal repercussions.
In terms of penalties and consequences for non-compliance, the Act does not specify particular penalties for breach of a TCO. However, general provisions under the Customs Act 1901 could apply, which might include fines and imprisonment for more severe breaches. The specific penalties would depend on the nature and extent of the breach, but the Act ensures that any breaches are treated seriously to maintain the integrity of the tariff concession scheme.