EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618957
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.
Lipa Pharmaceuticals Ltd applied for a TCO in respect of certain heating tanks on 24 November 2006.
Instrument
TCO No 0618957 was made on 02 March 2007. It declares that those certain heating tanks 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. 0618957 is taken to have come into force on 24 November 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, as amended, introduced the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation aims to facilitate tariff concessions for goods not produced in Australia in the ordinary course of business, thereby reducing customs duties and providing economic benefits to importers. Enacted by the Parliament of Australia, the Act seeks to streamline the application process for tariff concessions, ensuring that businesses can efficiently apply for and receive reduced duty rates on eligible imported goods. This instrument was designed to address the gap in the customs tariff system by allowing for targeted reductions in customs duties for specific goods, thereby promoting trade and economic efficiency.
The explanatory statement for Tariff Concession Instrument No. 0618957 details that the instrument was made on 2 March 2007, in response to an application by Lipa Pharmaceuticals Ltd for certain heating tanks. The CEO of Customs determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a tariff concession. This resulted in a concession reducing the duty on these heating tanks from the general rate of 5% to free. The instrument took effect on 24 November 2006, the date the application was lodged, and no submissions were received in opposition to the concession. This instrument ensures that importers can benefit from the tariff concession without any retroactive liabilities, aligning with the policy objective of facilitating fair and efficient trade practices.
Scope and Application
The Customs Act 1901 applies to a broad range of entities, including individuals, businesses, and importers, within Australia. Specifically, it governs the application and administration of Tariff Concession Orders (TCOs), which are critical for reducing customs duty on certain goods. The Act applies to any person who applies for a TCO in respect of goods, provided the goods do not fall under the exclusions specified in section 269SJ. The scope of the Act extends to the Chief Executive Officer of Customs, who is responsible for deciding whether an application meets the core criteria set out in sections 269C and 269F of the Act. Geographically, the Act applies across Australia and is enforced by the Commonwealth, ensuring a unified approach to customs duty and tariff concessions. The Act also includes provisions for subordinate instruments that may further define the scope and application of TCOs, allowing for detailed regulations and specific conditions under which tariff concessions can be granted.
Key Provisions
The Tariff Concession Instrument No. 0618957, pursuant to section 269F (1) of the Customs Act 1901, allows the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for certain heating tanks, following a valid application by Lipa Pharmaceuticals Ltd on 24 November 2006. This TCO declares that these heating tanks are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%. This concession is effective from the date the application was lodged, in accordance with subsection 269S(1) of the Customs Act 1901.
The Act imposes several obligations on both the applicant and the CEO. For the applicant, the obligation is to ensure that the application for a TCO is made in accordance with section 269F of the Act, and that it does not pertain to goods specified in section 269SJ, which are ineligible for tariff concessions. For the CEO, the obligations include verifying that the application meets the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order as per section 269P(3) of the Act, declaring the goods eligible for the tariff concession. Additionally, the CEO must publish a notice in the Gazette as per subsection 269K(1) of the Act, inviting any interested parties to submit reasons why the TCO should not be made.
Failure to comply with the requirements of the Customs Act 1901 can result in various legal consequences. While the specific offences, penalties, or civil/criminal consequences for breaches are not detailed in the explanatory statement, it is noted that the TCO does not affect the rights of any 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 Act and associated regulations provide for potential penalties for non-compliance with customs duties and other related obligations, but these specifics are not outlined in the explanatory statement. Importers, however, may apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.