EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721789
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.
Mayne Pharma International Pty Ltd applied for a TCO in respect of certain water purification plant on 18 December 2007.
Instrument
TCO No 0721789 was made on 07 March 2008. It declares that those certain water purification plants 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. 0721789 is taken to have come into force on 18 December 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 Parliament of Australia, provides a framework for the administration of customs duties, including provisions for Tariff Concession Orders (TCOs) which reduce or eliminate customs duties on certain goods under specific conditions. The problem or gap that the Act was introduced to address is the need to provide tariff relief to importers of goods that are not produced domestically, thereby promoting trade and economic efficiency. Tariff Concession Instrument No. 0721789, issued under the authority of the Customs Act, applies this framework to certain water purification plants, providing a zero rate of customs duty where the Chief Executive Officer of Customs is satisfied that no substitutable goods are produced in Australia. This instrument was introduced to provide tariff relief to Mayne Pharma International Pty Ltd for their importation of specified water purification plants, effective from the date the application was lodged, 18 December 2007.
Scope and Application
The Tariff Concession Instrument No. 0721789, established under the Customs Act 1901, applies to entities and individuals involved in the importation of specific water purification plants, allowing them to benefit from a concessional tariff rate. This concession is granted upon the application and approval by the Chief Executive Officer of Customs, following the criteria outlined in section 269F of the Act. The application process requires that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a Tariff Concession Order (TCO), and must meet the core criteria set out in sections 269C, 269D, 269E, and 269P(3) of the Act. Once approved, the TCO applies retroactively to the date the application was lodged, in this case, 18 December 2007. The geographic reach of this legislation is national, as it applies across Australia and is administered under federal law. Any person or entity importing the specified water purification plants is eligible for the tariff concession, provided they comply with the conditions set out in the TCO. The Act does not impose any liabilities on persons other than the Commonwealth, and any rights of importers will be positively affected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0721789, under the Customs Act 1901 (the Act), establish a framework for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid, the CEO must decide whether it meets the core criteria (section 269C). If satisfied, the CEO must issue a written order, which becomes a TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (section 269P(3)). In this case, the TCO No. 0721789, made on 7 March 2008, declares that certain water purification plants are goods to which item 50 of Schedule 4 to the Tariff applies, thus granting them a duty-free status.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also ensure that the application meets the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If these conditions are met, the CEO must make a TCO. Additionally, the TCO does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or imposed with liabilities for actions taken before the registration date (subsection 269S(1)).
The Act outlines specific offences, penalties, and consequences for breaches. While the explanatory statement does not detail specific penalties, the general implication is that failure to comply with the Act's provisions, including making a TCO under false pretenses or providing misleading information, could result in legal consequences. Such breaches might attract penalties under the broader Customs Act 1901, which could include fines or imprisonment, depending on the severity and intent of the breach. The precise penalties would be determined in accordance with the relevant sections of the Act and any applicable regulations.
In summary, TCO No. 0721789 under the Customs Act 1901 allows for a duty-free status for certain water purification plants by meeting the core criteria. The CEO's role is crucial in assessing applications and ensuring compliance with the Act. There are obligations for the CEO to publish notices and consider submissions, and there are protections in place to ensure that the TCO does not adversely affect the rights of any person. Breaches of the Act's provisions could lead to civil or criminal penalties, although specific penalties are not detailed in this explanatory statement.