EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702034
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.
Cardinal Health Australia Pty Ltd applied for a TCO in respect of certain medical gloves on 4 May 2007.
Instrument
TCO No 0702034 was made on 13 July 2007. It declares that those certain medical gloves 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 7.5%. 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. 0702034 is taken to have come into force on 4 May 2007.
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. 0702034, made under the Customs Act 1901, was enacted to address the need for tariff concessions on specific imported goods, thereby reducing the duty on these items to encourage their importation and use in Australia. This instrument was introduced to provide a streamlined process for the Chief Executive Officer of Customs to grant tariff concessions on goods, provided they meet the core criteria set out in the Act. The Customs Act 1901, administered by the Australian Parliament, allows for the application of lower customs duty rates on goods specified in a Tariff Concession Order (TCO). This particular instrument was made in response to an application by Cardinal Health Australia Pty Ltd for tariff concessions on certain medical gloves, with the objective of facilitating access to these essential medical supplies at a reduced cost.
Scope and Application
The Tariff Concession Instrument No. 0702034 under the Customs Act 1901 provides a concessional rate of customs duty for certain medical gloves, applicable to goods specified in the instrument. This Act applies to any person or entity seeking a tariff concession order (TCO) for goods that are not produced in Australia and for which no substitutable goods are produced domestically. The instrument was made on 13 July 2007, following an application by Cardinal Health Australia Pty Ltd for a TCO concerning specific medical gloves, and it came into effect on the date the application was lodged, 4 May 2007. The Act’s application extends nationally, as it is part of the Commonwealth’s customs legislation. Notably, the instrument does not disadvantage any person other than the Commonwealth and imposes no liabilities on persons other than the Commonwealth in respect of actions taken before the TCO’s registration. The general rate of duty on these gloves is 7.5%, but under this TCO, the rate is reduced to 0%. The scope of the Act may be further extended or specified through subordinate instruments, though this particular TCO is standalone in its application and effect.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0702034, under the Customs Act 1901, primarily involve the creation and application of Tariff Concession Orders (TCOs) for specific goods (sections 269F, 269C, and 269P). Section 269F allows for the application to the Chief Executive Officer (CEO) of Customs for a TCO, while section 269C outlines the core criteria that must be satisfied for such an order to be made. If the CEO determines that the application meets these criteria, they must issue a written TCO (section 269P(3)). In this particular instance, the TCO No. 0702034 pertains to certain medical gloves, reducing their customs duty from 7.5% to 0% (section 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Act on the parties involved include ensuring that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business (section 269C). The CEO is mandated to make a decision on the TCO application based on these criteria and to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO. Additionally, section 269S(1) stipulates that a TCO comes into force on the date the application is lodged, meaning that TCO No. 0702034 is effective from 4 May 2007.
Any breaches or non-compliance with the provisions of the Customs Act 1901 concerning TCOs can lead to various consequences. Although the explanatory statement does not specify detailed penalties, breaches of customs regulations generally can result in both civil and criminal penalties, including fines and imprisonment, depending on the severity of the breach. For instance, under the Customs Act, individuals or entities found to be misusing TCOs or providing false information in their applications could face substantial fines or even imprisonment. However, the specific penalties are not detailed in the explanatory statement but would typically be found in the relevant sections of the Customs Act and associated regulations.
The explanatory statement highlights that the TCO does not affect the rights of any person, other than the Commonwealth, as they stood on the date of registration (subsection 269S(2)). It further clarifies that the TCO does not impose any liabilities on any person for actions taken before the registration date. Instead, it provides potential benefits to importers, such as the ability to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). This ensures that the implementation of the TCO is fair and does not retroactively disadvantage any party.