EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612479
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.
Alphapharm Pty Ltd applied for a TCO in respect of certain pharmaceutical tablet press parts on 26 July 2006.
Instrument
TCO No 0612479 was made on 13 October 2006. It declares that those certain pharmaceutical tablet press parts 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. 0612479 is taken to have come into force on 26 July 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 for the regulation of customs and excise duties and includes provisions for Tariff Concession Orders (TCOs). These concessions are designed to lower the rate of customs duty for specific goods, provided they meet certain criteria. Specifically, a TCO can be applied for under section 269F of the Act, and if granted, the duty rate for the specified goods is reduced. The Tariff Concession Instrument No. 0612479, made on 13 October 2006, exemplifies this process. Alphapharm Pty Ltd applied for and was granted a TCO for certain pharmaceutical tablet press parts, resulting in a reduction of duty from 5% to 0%. This was achieved as the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time of the application, fulfilling the core criteria set out in section 269C of the Act. The policy objective of this legislation is to facilitate the import of goods that are not locally produced, thereby encouraging trade and potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions on certain goods. The Act facilitates the application process for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs to lower the rate of customs duty on specified goods. The legislation allows for a TCO to be granted if no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D. This Act applies nationally across Australia, as it is a Commonwealth Act, and extends to all importers and goods subject to the Customs Act. There are specific exclusions, such as those goods listed in section 269SJ that cannot be subject to a TCO. The Act also provides mechanisms for subordinate instruments to further define and extend its application.
Key Provisions
The Tariff Concession Order (TCO) No. 0612479, established under section 269F of the Customs Act 1901, pertains to the application by Alphapharm Pty Ltd for a tariff concession concerning specific pharmaceutical tablet press parts. The primary operative sections relevant to this TCO are sections 269C, 269D, 269E, and 269P. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, section 269P(3) requires the CEO to issue a written order that specifies the goods to which the concession applies.
The obligations imposed by this TCO on the relevant parties include the requirement for Alphapharm Pty Ltd to ensure that their application for a tariff concession is valid and meets the criteria set out in the Customs Act. The CEO, on receiving a valid application, must determine whether the application meets the core criteria and, if satisfied, issue a TCO. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO is also required to consider any submissions received and make a decision based on the evidence presented. In this instance, no submissions were received, which facilitated the issuance of the TCO.
Failure to comply with the provisions of the Customs Act and the TCO can lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or criminal/civil consequences, it is reasonable to infer that non-compliance could lead to legal actions under the Customs Act. The Act generally provides for penalties for offences such as making false statements, evading duty, or contravening an order. The maximum penalties can include substantial fines and imprisonment, depending on the severity of the offence. Furthermore, the TCO itself, by granting a concession, might be subject to review or revocation if it is found that the conditions for the concession were not met or were subsequently breached.
In conclusion, TCO No. 0612479 provides a tariff concession for certain pharmaceutical tablet press parts, applying a zero percent duty rate instead of the general 5 percent. The key sections involved in this process ensure that the application meets specific criteria, and the CEO's obligations include evaluating the application and publishing a notice for submissions. Non-compliance with the provisions of the Customs Act could lead to various penalties and consequences, although the specific details are not fully outlined in the explanatory statement.