EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704078
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.
Hills Industries Limited applied for a TCO in respect of certain solar heat collector kits on 16 March 2007.
Instrument
TCO No 0704078 was made on 08 June 2007. It declares that those certain solar heat collector kits 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. 0704078 is taken to have come into force on 16 March 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. 0704078, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods. The Act allows for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce the customs duty on goods, provided certain criteria are met. The explanatory statement clarifies that the instrument was enacted to facilitate tariff concessions for certain solar heat collector kits, as applied for by Hills Industries Limited on 16 March 2007. The primary policy objective was to ensure that these goods, which had no substitutable Australian-produced alternatives, would benefit from reduced customs duty, thereby supporting their market entry and potentially encouraging their use. The instrument became effective on the date of the application, 16 March 2007, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0704078, made under the Customs Act 1901, applies to certain solar heat collector kits, granting them tariff concessions to stimulate trade and investment. The Act applies to any individual or entity seeking tariff concessions for specified goods, provided the goods are not listed in section 269SJ of the Act, which includes certain strategic goods that are ineligible for such concessions. The scope of the Act extends nationally, as it is a Commonwealth Act, thereby affecting all entities and individuals involved in the importation of the specified goods across Australia. The instrument was made in response to an application by Hills Industries Limited, and it became effective on the date the application was lodged, 16 March 2007. There were no submissions opposing the tariff concession, and the instrument does not disadvantage any person or impose liabilities for actions taken before its registration. The Act may be further extended or detailed through subordinate instruments, such as regulations or orders, which can provide additional specifications and operational guidelines.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must make a written order (section 269P(3)). This order declares that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This particular TCO, No. 0704078, applies to certain solar heat collector kits, granting them a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations and requirements on parties or entities it governs. Firstly, the CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which are those goods that cannot be subject to a TCO. Secondly, the CEO must be satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). A TCO is deemed to have come into force on the day on which the application for the TCO was lodged (subsection 269S(1)).
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly state any criminal offences or penalties for failing to comply with the provisions related to TCOs. However, the Act does outline civil consequences for non-compliance with other related provisions. For instance, under section 235, a person who contravenes a provision of the Act or the regulations is liable to a penalty not exceeding the greater of 10,000 penalty units or three times the value of the goods involved in the contravention. Additionally, under section 236, an offence under the Act may be prosecuted either summarily or on indictment, with the maximum penalties varying depending on the nature of the offence and the circumstances surrounding it.