EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708845
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 optical fibre connectors on 12 June 2007.
Instrument
TCO No 0708845 was made on 31 August 2007. It declares that those certain 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. 0708845 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for customs duties and provides for the application of tariff concession orders (TCOs) to reduce duty on certain goods. The Act was introduced to facilitate the import of goods by reducing customs duty where appropriate, thereby supporting trade and economic activities. The Tariff Concession Instrument No. 0708845, issued on 31 August 2007, addresses the specific issue of applying a tariff concession to certain optical fibre connectors, as requested by Diamond Australia Pty Ltd. This concession was made as no substitutable goods were being produced in Australia at the time of the application, thereby meeting the core criteria outlined in the Customs Act. The instrument effectively reduces the general duty rate of 5% to zero for these specific goods, effective from the date of the application, 12 June 2007.
Scope and Application
The Tariff Concession Instrument No. 0708845 under the Customs Act 1901 applies to specific goods, namely certain optical fibre connectors, for which Diamond Australia Pty Ltd applied for tariff concessions on 12 June 2007. The Chief Executive Officer of Customs, upon being satisfied that no substitutable goods were produced in Australia and meeting the core criteria, issued the concession order, making it effective from the date of the application. This Act pertains to the reduction or exemption of customs duty for these particular goods, thereby impacting the rights of importers by potentially allowing them to apply for refunds of duties paid on imports since the effective date of the concession. The geographic reach of this legislation is national, as it is governed under Commonwealth law. The Act does not disadvantage any person by affecting their rights as at the date of registration or impose any new liabilities. Any exclusions or exemptions from the application of the Act are defined under the Customs Act 1901, particularly in sections such as 269SJ, which specifies goods that cannot be subject to a Tariff Concession Order.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0708845 under the Customs Act 1901 (sections 269C, 269P, 269K, and 269S) establish a process for granting tariff concessions on certain goods. Section 269C defines the core criteria that must be met for a Tariff Concession Order (TCO) to be issued, such as ensuring that no substitutable goods are produced in Australia. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to issue a TCO if these criteria are met, effectively lowering the customs duty on the specified goods. Section 269K mandates the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while section 269S details the commencement date of the TCO, which is the same as the date the application was lodged.
The obligations and requirements imposed by the Act on parties and entities it governs include the need for applicants to ensure their goods meet the core criteria outlined in section 269C. The CEO of Customs is obligated to evaluate applications against these criteria and must publish a notice in the Gazette to invite submissions if the application is deemed valid (section 269K). The CEO must also decide whether to issue a TCO within this framework and ensure the order is properly documented and registered (section 269P). Importers benefit from the ability to apply for a refund of duties paid on goods imported after the TCO comes into effect, as stipulated in paragraph 126(1)(r) of the Regulations.
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties for non-compliance with the provisions of a TCO. However, any actions that contravene the Customs Act 1901, such as fraudulent applications or misuse of TCOs, may result in civil or criminal penalties under broader sections of the Act. For example, knowingly making a false statement in an application could lead to fines or imprisonment as per the general provisions of the Act that deal with fraudulent behaviour in customs matters. The specific penalties would depend on the nature and severity of the breach, aligning with the penalties outlined in other relevant sections of the Customs Act 1901.