EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807511
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.
Australian Pharmaceutical Partners applied for a TCO in respect of certain prostaglandin e1 alprostadil on 12 May 2008.
Instrument
TCO No 0807511 was made on 25 July 2008. It declares that those certain prostaglandin e1 alprostadil 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. 0807511 is taken to have come into force on 12 May 2008.
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 Commonwealth Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on goods specified in the order. The Tariff Concession Instrument No. 0807511, issued on 25 July 2008, responds to an application by Australian Pharmaceutical Partners for a concession on certain prostaglandin e1 alprostadil. The Tariff Concession Order was made on the basis that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. As a result, these goods now attract a free rate of duty, down from the general rate of 5%. The instrument's policy objective is to facilitate the importation of goods that are not locally produced, thereby supporting the availability and affordability of such goods within Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This Act applies to any person or entity that wishes to apply for a TCO for goods not listed under section 269SJ of the Act, which includes goods that are either prohibited or cannot be subject to a TCO. The geographic reach of this Act is national, as it applies across Australia under Commonwealth jurisdiction. The Act does not apply to goods specified in section 269SJ, which explicitly prohibits certain goods from receiving tariff concessions. The CEO is mandated to make a TCO if the application meets the core criteria outlined in sections 269C, 269D, and 269E of the Act, and if no substitutable goods are produced in Australia. The TCO does not affect existing rights or impose liabilities on persons other than the Commonwealth, and it is effective from the date the application is lodged, as per subsection 269S(1) of the Act. Subordinate instruments may extend or restrict the application of this Act, but the primary focus remains on facilitating tariff concessions for specified goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0807511 include sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901 (the Act), as well as relevant provisions of the Customs Tariff Act 1995. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they are required to make a written order, as per section 269P, which declares the goods subject to a concessional rate of duty. Section 269SJ specifies goods that cannot be subject to a TCO.
The Act imposes specific obligations on the parties involved. The CEO has the responsibility to decide whether an application for a TCO meets the core criteria. This decision must be made in accordance with the conditions stipulated in sections 269C, 269D, and 269E of the Act. These sections define key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO is satisfied that the application meets these criteria, they must issue a TCO. Furthermore, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any interested parties.
In the case of a breach of the provisions set forth in the Customs Act 1901, there are potential offences, penalties, and consequences. While the explanatory statement does not detail specific penalties for breaches related to TCOs, the Act generally outlines penalties for contraventions of its provisions. These penalties can include fines and imprisonment for criminal offences, and financial penalties for civil contraventions. The maximum penalties would depend on the specific nature of the breach and the relevant provisions of the Act and any subsidiary legislation.
The explanatory statement highlights that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. This ensures that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The instrument’s provisions are designed to avoid any adverse impact on existing rights or liabilities prior to its effective date.