EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812833
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.
Molex Premise Networks applied for a TCO in respect of certain modular jacks on 16 June 2008.
Instrument
TCO No 0812833 was made on 01 September 2008. It declares that those certain modular jacks 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. 0812833 is taken to have come into force on 16 June 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 Tariff Concession Instrument No. 0812833 was enacted in 2008 under the Customs Act 1901, aiming to address the issue of providing tariff concessions for specific goods where no substitutable goods are produced domestically. This legislation allows the Chief Executive Officer of Customs to reduce customs duty rates for certain imported goods if it is established that these goods are not produced in Australia and no comparable goods are manufactured locally. The Tariff Concession Order (TCO) No. 0812833, applied for by Molex Premise Networks for certain modular jacks, was made on 1 September 2008, following a review by the CEO and the absence of any objections from interested parties. The policy objective behind this measure is to facilitate the import of goods that are not domestically produced, thereby supporting market access and potentially lowering costs for businesses that rely on importing these specific goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the application of tariff concession orders (TCOs) that can lead to reduced customs duty rates on certain goods. This legislation applies to any individual or entity that applies for a TCO in relation to goods, provided that such goods are not explicitly excluded under section 269SJ of the Act. The scope of the Act extends to the entire Commonwealth of Australia, with its provisions being applicable across all states and territories. The Act stipulates that a TCO can be granted if the Chief Executive Officer of Customs determines that the goods in question do not have substitutable Australian-produced alternatives, thereby meeting the core criteria outlined in section 269C. In the case of TCO No. 0812833, certain modular jacks were subject to this concession, resulting in a duty rate of free as opposed to the general rate of 5%. The Act also ensures that the introduction of a TCO does not retroactively disadvantage any person or impose new liabilities on them for actions taken prior to the TCO's effective date. The rights of importers are positively affected, allowing them to apply for duty refunds on imports made since the TCO's commencement date, which aligns with the date the application was lodged.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269C, 269F, and 269P) and the Customs Tariff Act 1995 (Schedule 4, item 50) establish the framework for Tariff Concession Orders (TCO). Under section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria (section 269C), which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order declaring the goods subject to the TCO. This order specifies that the goods are subject to a prescribed item of Schedule 4 to the Tariff, which determines the rate of duty. In this case, the TCO declares that certain modular jacks are subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Customs Act 1901 imposes specific obligations on the CEO when processing a TCO application. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. Additionally, the CEO must satisfy themselves that the application meets the core criteria as stipulated in section 269C. If the CEO is satisfied, they must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration to their disadvantage or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Breaching the provisions of the Customs Act 1901 or the Customs Tariff Act 1995, including failing to comply with the requirements for making a TCO, may result in both civil and criminal consequences. Civil penalties can include fines, with the exact amount determined by the courts based on the severity of the breach. Criminal penalties can include imprisonment, particularly if the breach involves fraudulent activities or significant financial implications. The specific maximum penalties are not detailed in the explanatory statement, but they are outlined in the respective acts and would be applied according to the nature and extent of the breach.