EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715789
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.
Remote Area Power Systems Pty Ltd applied for a TCO in respect of certain solar movers on 20 September 2007.
Instrument
TCO No 0715789 was made on 07 December 2007. It declares that those certain solar movers 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. 0715789 is taken to have come into force on 20 September 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 Australian Parliament, establishes a framework for the administration of customs duties and the regulation of imports and exports. The Act was introduced to address the need for a systematic approach to managing customs duties and ensuring the smooth flow of trade while protecting domestic industries. Under Part XVA of the Customs Act, Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, which provide for a lower rate of customs duty on specified goods. This legislative instrument, F2007L04835, pertains to TCO No. 0715789, which was made on 7 December 2007 for certain solar movers, reducing their duty rate to free from the general rate of 5%. The policy objective of this TCO, as outlined in the Act, is to ensure that the goods subject to the concession are not substitutable by products manufactured within Australia, thereby promoting the use of Australian-made alternatives where feasible.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concession orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on specified goods. This legislative provision applies to any person or entity that can demonstrate that the goods for which a TCO is sought are not substitutable by goods produced in Australia in the ordinary course of business. The application of this Act is national in scope, as it pertains to the Commonwealth of Australia. Notably, the Act excludes certain goods from being subject to a TCO as per section 269SJ. The application process involves an assessment by the CEO to ensure that the core criteria are met, and if satisfied, a TCO is issued. For example, TCO No. 0715789 was issued for certain solar movers on 20 September 2007, reducing their duty rate to free from the general rate of 5%. This concession is effective from the date of the application, 20 September 2007, and benefits importers by allowing them to apply for duty refunds on goods imported since this date. The legislation ensures that no existing rights or liabilities are adversely affected by the issuance of a TCO.
Key Provisions
The Tariff Concession Instrument No. 0715789, under the Customs Act 1901, provides specific concessions on customs duty for certain solar movers. Pursuant to section 269F, an application for a Tariff Concession Order (TCO) was made by Remote Area Power Systems Pty Ltd on 20 September 2007. The CEO of Customs assessed the application and determined that no substitutable goods were being produced in Australia at the time, satisfying the core criteria as outlined in section 269C. Consequently, a TCO was issued on 7 December 2007, reducing the customs duty for these solar movers from the general rate of 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO came into effect on the date of the application, 20 September 2007, as stipulated in subsection 269S(1).
The obligations imposed by this legislation primarily involve the CEO of Customs ensuring that the application for a TCO meets the core criteria and that no substitutable goods are being produced in Australia. Under subsection 269K(1), the CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO. In this case, no submissions were received. The CEO’s role includes verifying the eligibility of the goods for the concession and making a written order if the criteria are met. Furthermore, the CEO must ensure that the TCO does not disadvantage any person, other than the Commonwealth, as stated under section 269P(3).
Failure to comply with the requirements set out in the Customs Act 1901 may lead to civil or criminal consequences. While the specific penalties for breach are not detailed in the Explanatory Statement, it is important to note that breaches of customs regulations can result in substantial fines and potential imprisonment. For instance, under section 269C, any misrepresentation or failure to meet the core criteria may attract penalties under the relevant sections of the Customs Act or other applicable laws. Importers are, however, provided a pathway to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.