EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608284
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.
Pharmapac Pty Ltd applied for a TCO in respect of certain plastic tubes on 12 May 2006.
Instrument
TCO No 0608284 was made on 28 July 2006. It declares that those certain plastic tubes 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 0%.
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. 0608284 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 Tariff Concession Instrument No. 0608284 was enacted under the Customs Act 1901 to provide a mechanism for tariff concessions on certain goods, aiming to facilitate trade by reducing customs duty rates on specific items. This instrument was introduced to address the gap in tariff regulation by allowing the Chief Executive Officer of Customs to grant tariff concessions where no substitutable goods are produced in Australia. The Parliament established this framework to encourage economic activity by making imported goods more competitively priced. The policy objective is to provide relief from customs duties on certain goods, thus promoting trade efficiency and benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 0608284 under the Customs Act 1901 applies specifically to the concession of customs duty for certain plastic tubes, as applied for by Pharmapac Pty Ltd. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The TCO applies to the goods specified in the instrument and reduces the customs duty rate from the general rate of 5% to 0%. The application of this instrument is governed by the provisions in Part XVA of the Customs Act 1901, with the CEO required to consider the application against the core criteria outlined in sections 269C, 269D, and 269E of the Act. Notably, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The instrument came into effect on the date the application was lodged, 12 May 2006, and provides for potential duty refunds for importers of the specified goods since that date under the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Instrument No. 0608284, include sections 269C, 269B, 269D, 269E, and 269P(3) (subsection 269K(1) is also relevant). These sections establish the framework for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on specified goods. Specifically, section 269C requires the Chief Executive Officer of Customs (CEO) to consider whether an application for a TCO meets the core criteria, which includes the absence of substitutable goods produced in Australia, as defined by sections 269B and 269D. If the application is deemed to meet these criteria, the CEO must issue a written TCO, as outlined in section 269P(3), which specifies the reduced duty rate for the goods in question. Subsection 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application.
The Act imposes several obligations on the parties involved. Firstly, the applicant, such as Pharmapac Pty Ltd, must submit an application to the CEO detailing the goods for which a tariff concession is sought. The CEO, upon receiving the application, is required to assess whether the goods meet the core criteria, including verifying the absence of substitutable goods produced in Australia. Additionally, the CEO must publish a notice in the Gazette to invite any submissions from interested parties, as mandated by subsection 269K(1). Should no objections be received, the CEO must proceed to make the TCO.
In the event of a breach of the provisions outlined in the Customs Act 1901 or the Tariff Concession Instrument No. 0608284, there are specified penalties and consequences. While the Explanatory Statement does not detail specific penalties for breaches of TCOs, breaches of the broader Customs Act 1901 can result in significant penalties. For instance, under section 246 of the Act, the maximum penalty for knowingly importing goods in contravention of the Act can be up to 10,000 penalty units or imprisonment for five years, or both, for individuals. For corporations, the maximum penalty can be up to 50,000 penalty units. These penalties underscore the importance of compliance with the Act's provisions and the potential serious repercussions for non-compliance.