EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0832746
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.
Adc Communications (Australia) Pty Limited applied for a TCO in respect of certain connection and contact element modules on 25 September 2008.
Instrument
TCO No 0832746 was made on 12 December 2008. It declares that those certain connection and contact element modules 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. 0832746 is taken to have come into force on 25 September 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. 0832746 was introduced in 2008 under the Customs Act 1901, addressing the need to provide tariff concessions on specific goods that are not produced in Australia and for which there are no substitutable domestic products. This instrument was enacted by the Australian Government to facilitate the importation of certain connection and contact element modules, for which Adc Communications (Australia) Pty Limited had applied. The primary policy objective behind this legislation is to support Australian businesses by allowing them to import goods at a lower rate of customs duty if those goods are not produced domestically and if there are no suitable alternatives available in the Australian market. The instrument was developed following a process of public consultation as stipulated by the Act, although no objections were received in response to the published notice inviting submissions.
The Tariff Concession Instrument No. 0832746, which came into effect on 25 September 2008, was designed to benefit importers by reducing the duty on specified goods from the general rate of 5% to free. This change was intended to have a positive impact on the rights of importers, who can now apply for a refund of duty on the imported goods since the date the TCO was taken to have come into force. Importantly, the legislation does not disadvantage any person or impose new liabilities on any party in respect of actions taken before the registration of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0832746, made under the Customs Act 1901, applies to the specific goods identified in the application by Adc Communications (Australia) Pty Limited, namely certain connection and contact element modules. This instrument was created to address the application by the company for a Tariff Concession Order (TCO) that would reduce the customs duty on these specified goods. The Act allows the Chief Executive Officer of Customs to grant such orders provided the application meets certain core criteria, specifically that no substitutable goods are produced in Australia. The TCO, which came into effect on 25 September 2008, sets the duty rate for these modules at free, down from the general rate of 5%. This legislation is applicable nationally within Australia, extending its reach across all jurisdictions. The scope of the TCO is limited to the goods defined in the application and does not affect any existing rights or liabilities incurred prior to its registration. Furthermore, the Act does not impose any new liabilities on any person, including importers who may benefit from this concession.
Key Provisions
The main operative sections of the Customs Act 1901 as applied in Tariff Concession Instrument No. 0832746 (Sections 269F, 269C, 269B, and 269P(3)) set out the procedures for the application and granting of Tariff Concession Orders (TCO). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question are not specified in section 269SJ. Section 269C requires that the CEO determines if the application meets core criteria, which includes the absence of substitutable goods produced in Australia as defined in section 269D and 269E. If the core criteria are met, Section 269P(3) mandates that the CEO issues a written TCO, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The applicant must ensure that the goods for which the TCO is sought are not specified in section 269SJ and that no substitutable goods are being produced in Australia at the time of the application. The CEO is required to publish a notice in the Gazette inviting submissions against the TCO application, as stipulated in section 269K(1). The CEO must also review the application to confirm that it meets the core criteria outlined in section 269C before issuing a TCO as per section 269P(3). Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration, thus protecting existing rights and liabilities, as mentioned in subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 can lead to several consequences. While the explanatory statement does not specify particular offences, it is implicit that non-compliance with the application criteria or the misrepresentation of facts in the application could result in legal repercussions. The penalties for such breaches are not explicitly stated in the explanatory statement, but generally, breaches of customs legislation can result in significant fines and potential criminal charges under the relevant sections of the Customs Act 1901. Furthermore, any misuse of a TCO could lead to penalties, including the repayment of any benefits gained from the concession.
In the specific case of Adc Communications (Australia) Pty Limited, the TCO granted in Instrument No. 0832746 allows for the importation of certain connection and contact element modules duty-free, provided they meet the criteria specified in the Act. The instrument came into effect on the date of the application, 25 September 2008. The TCO does not impose any liabilities on any person and provides for potential duty refunds for importers of these goods since the effective date. The explanatory statement confirms that the rights of importers will be positively impacted by this concession.