EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612574
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 tablet coater parts on 27 July 2006.
Instrument
TCO No 0612574 was made on 20 October 2006. It declares that those certain tablet coater 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 10%. 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. 0612574 is taken to have come into force on 27 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, establishes a framework for the imposition of customs duties on imported goods. Within this framework, Part XVA introduces a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This scheme aims to provide tariff relief for specific goods under certain conditions, thereby facilitating trade and encouraging the import of goods that are not produced domestically. The Tariff Concession Instrument No. 0612574, made under this Act, addresses the specific need for tariff concessions on certain tablet coater parts by Alphapharm Pty Ltd. The instrument was enacted to ensure that these parts are subject to a zero rate of customs duty, as no substitutable goods are produced in Australia, aligning with the core criteria set out in the Act. The policy objective of this instrument is to support the import of necessary industrial components, thus benefiting importers by potentially reducing their customs duty liabilities.
Scope and Application
The Tariff Concession Instrument No. 0612574, made under section 269C of the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain tablet coater parts. This legislation pertains to entities and individuals involved in the importation of these goods, particularly importers who stand to benefit from the concession. The instrument is part of a broader scheme established by Part XVA of the Customs Act, which allows for the application of lower customs duty rates through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. The application of this particular TCO is contingent on the absence of substitutable goods produced in Australia on the day the application was lodged, as outlined in sections 269C and 269D of the Act. The geographic reach of this legislation is national, as it falls under the Commonwealth’s purview. The TCO does not extend to goods specified in section 269SJ of the Customs Act, which lists those that cannot be subject to a TCO. The commencement of this TCO is deemed to have occurred on 27 July 2006, the date the application was lodged, with no retroactive effect on rights or liabilities prior to this date. The TCO is further clarified and potentially expanded through subordinate instruments and regulations, ensuring its effective administration and application.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the application and consideration of Tariff Concession Orders (TCOs), as outlined in sections 269F to 269SJ. When a person applies for a TCO in respect of certain goods, section 269F mandates that the Chief Executive Officer of Customs (the CEO) must consider whether the application meets the core criteria. These criteria, set out in sections 269B to 269D and 269P(3), involve assessing whether no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations under the Act for the CEO include accepting valid TCO applications and ensuring they meet the core criteria before making a decision. The CEO is also required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as stipulated in subsection 269K(1). In the case of TCO No. 0612574, the CEO did not receive any submissions, indicating that no objections were raised to the application. Furthermore, the TCO must come into effect on the day the application was lodged, as outlined in subsection 269S(1).
In terms of consequences, the Act does not disadvantage any person other than the Commonwealth by affecting their rights as at the date of registration. It also does not impose any liabilities on any person for actions taken before the registration date. The benefits for importers are notable, as they can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
Breach of the conditions set out in the Act may lead to civil or criminal consequences. While specific offences and penalties are not detailed in the text, general provisions under the Customs Act 1901 and associated regulations may apply. These could include fines and imprisonment for serious breaches, with the exact penalties depending on the nature and severity of the offence. The Act ensures that the process for granting TCOs is transparent and fair, with clear obligations and potential consequences for non-compliance.