EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702676
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.
Glaxosmithkline Australia Pty Ltd applied for a TCO in respect of certain oral medication dispensers on 21 February 2007.
Instrument
TCO No 0702676 was made on 18 May 2007. It declares that those certain oral medication dispensers 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. 0702676 is taken to have come into force on 21 February 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 Customs Act 1901, enacted by the Australian Parliament, facilitates the application of reduced customs duties on certain goods through Tariff Concession Orders (TCOs). This legislative framework aims to address the gap in providing economic benefits to importers by enabling the Chief Executive Officer of Customs (CEO) to reduce the duty rate for specific goods, provided no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0702676, made on 18 May 2007, is an example of this mechanism in action, where certain oral medication dispensers were granted a tariff concession following an application by GlaxoSmithKline Australia Pty Ltd. The policy objective is to ensure that importers can benefit from reduced duty rates, thereby potentially lowering the cost of imported goods and making them more affordable for consumers. This approach aligns with the broader aim of the Customs Act to manage customs duties efficiently while supporting economic activity.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who may apply for a TCO for goods, provided those goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The scope of the Act extends to ensuring that the application meets the core criteria, specifically that no substitutable goods are produced in Australia at the time of application. The geographic reach of the Act is national, as it applies to goods entering Australia. The Act allows for the exclusion of certain goods from tariff concessions, such as those listed in section 269SJ. The application of the Act may also be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which details the specific rates of duty applicable to goods. The explanatory statement for Tariff Concession Instrument No. 0702676 illustrates the process by which the CEO evaluates an application and the conditions under which a TCO is granted, such as in the case of GlaxoSmithKline Australia Pty Ltd's application for certain oral medication dispensers.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0702676 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) that grants a lower rate of customs duty on specified goods. The CEO must ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269C and 269P(3)), the CEO must make a written TCO. For the purpose of the TCO No. 0702676, certain oral medication dispensers are subject to a duty rate of free, down from the general rate of 5%.
The obligations imposed by the Act on the parties it governs include ensuring that the goods in question are not specified in section 269SJ, which excludes certain goods from TCOs. The CEO must also ensure that no substitutable goods were produced in Australia on the day the TCO application was lodged. Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 0702676, no submissions were received in response to this invitation.
In terms of penalties and consequences, the Act does not specify any criminal or civil penalties for breaches of its provisions regarding TCOs. However, it is important to note that the rights of a person (other than the Commonwealth) as at the date of registration will not be disadvantaged, nor will any liabilities be imposed on a person in respect of anything done or omitted to be done before the date of registration. Importers of the goods subject to the TCO will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person.