EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708843
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.
Diamond Australia Pty Ltd applied for a TCO in respect of certain plastic optical fibre connectors on 12 June 2007.
Instrument
TCO No 0708843 was made on 31 August 2007. It declares that those certain plastic optical fibre connectors 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. 0708843 is taken to have come into force on 12 June 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. 0708843, enacted under the Customs Act 1901, addresses the need for tariff concessions on certain goods, allowing for a reduction or elimination of customs duties under specific conditions. The Act enables the Chief Executive Officer of Customs to grant these concessions, which can be applied for by interested parties, subject to certain criteria and conditions outlined in the Act. The primary objective of this legislative instrument is to facilitate the importation of goods by reducing or exempting them from customs duties, provided that no substitutable goods are produced in Australia. This mechanism aims to support the importation of specific goods by businesses such as Diamond Australia Pty Ltd, which applied for concessions on plastic optical fibre connectors, ultimately benefiting importers by reducing their duty liabilities.
The Tariff Concession Instrument No. 0708843 was introduced following an application by Diamond Australia Pty Ltd, and it came into effect on the date of the application, 12 June 2007. The instrument declares that certain plastic optical fibre connectors are subject to a tariff concession, with a free rate of duty instead of the general rate of 5%. This concession was granted as the CEO was satisfied that no substitutable goods were produced in Australia. The instrument ensures that it does not adversely affect any existing rights or impose new liabilities on individuals or entities other than the Commonwealth. Importers stand to benefit from this concession as they can apply for refunds of duty on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This Act applies to individuals and entities seeking to import goods into Australia, with a focus on those applying for tariff concessions. The scope of the Act extends to all industries and transactions involving the importation of goods subject to customs duties, provided these goods do not fall under the categories specified in section 269SJ of the Act which are ineligible for tariff concessions. The Act operates on a Commonwealth level and its provisions are enforced across the entirety of Australia. Importantly, the Act includes a provision for the CEO to consult with the public by publishing notices in the Gazette when a TCO application is accepted, allowing interested parties to submit any objections. The Act also ensures that the introduction of a TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth in relation to actions taken prior to the TCO's effective date. Subordinate instruments, such as regulations, may further extend or specify the application of the Act, but these are not detailed in the provided explanatory statement.
Key Provisions
The Customs Act 1901, as amended, provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO reduces the rate of customs duty for certain goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. In the case of Diamond Australia Pty Ltd’s application for a TCO regarding certain plastic optical fibre connectors, TCO No. 0708843 was issued on 31 August 2007 because the CEO was satisfied that no substitutable goods were produced in Australia (s 269P(3)). The TCO declares that the specified plastic optical fibre connectors are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby setting the duty rate at free (s 269P(3)).
The Act imposes certain obligations on the CEO, including the requirement to publish a notice in the Gazette once a TCO application is accepted as valid. This notice invites any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (s 269K(1)). In this instance, the CEO did not receive any submissions in response to the notice. Additionally, under section 269S(1), a TCO is considered to come into force on the day the application for the TCO was lodged, which in this case was 12 June 2007. The TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a manner that disadvantages that person or imposes liabilities for actions taken before the registration date. Importers of the specified goods will be able to apply for a refund of duty on goods imported since the TCO came into force (Reg 126(1)(r)).
Section 269SJ of the Customs Act 1901 specifies goods that cannot be the subject of a TCO. The Act does not explicitly detail specific offences, penalties, or consequences for non-compliance with the provisions regarding TCOs. However, any failure by the CEO to adhere to the statutory requirements, such as not publishing the required notice or improperly making a TCO, could potentially lead to legal challenges or administrative reviews. The consequences of such non-compliance would depend on the specific circumstances and the legal framework governing administrative actions and judicial review in Australia.