EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902573
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.
Solar Systems applied for a TCO in respect of certain photovoltaic receivers assembly lines on 27 January 2009.
Instrument
TCO No 0902573 was made on 24 April 2009. It declares that those certain photovoltaic receivers assembly lines 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. 0902573 is taken to have come into force on 27 January 2009.
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. 0902573 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods, particularly photovoltaic receivers assembly lines, that were not being produced domestically. This instrument, made on 24 April 2009, allows for a lower rate of customs duty on these goods, effectively reducing the duty from the general rate of 5% to free. The Customs Act 1901 provides the framework for the Chief Executive Officer of Customs to make such tariff concession orders when certain criteria are met, including the absence of substitutable goods produced in Australia. The instrument was introduced following an application by Solar Systems on 27 January 2009, and it came into effect on the same day, ensuring no adverse impact on existing rights or liabilities of individuals other than the Commonwealth. The process also included a public consultation period, though no objections were received.
Scope and Application
The Tariff Concession Instrument No. 0902573 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods, in this case photovoltaic receivers assembly lines, by providing a lower rate of customs duty. The application of this instrument is limited to the goods specified in the application and those that meet the criteria outlined in the Act, specifically where no substitutable goods are produced in Australia in the ordinary course of business. The CEO of Customs determines the eligibility of these goods for tariff concessions by assessing whether they meet the core criteria set out in the Act. The geographic and jurisdictional reach of this Act is national, as it pertains to the Customs Act 1901, which applies throughout Australia. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of any person as at the date of registration with respect to actions taken prior to the registration date. The TCO, once registered, provides benefits such as the potential for duty refunds for importers of the specified goods from the date the TCO is taken to have come into force. The Act may extend or restrict its application through subordinate instruments, ensuring compliance with broader legislative objectives.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269F, allow for the application of Tariff Concession Orders (TCOs) to certain goods, which results in a reduced rate of customs duty. Specifically, section 269C outlines the core criteria for a TCO application to be considered valid, primarily requiring that on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the TCO and specifying the applicable tariff item.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess the validity of TCO applications against the core criteria set out in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. Furthermore, under section 269K, the CEO is required to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. The CEO must also ensure that any TCO does not disadvantage non-Commonwealth persons by affecting their rights as at the date of registration or imposing liabilities for actions taken prior to the TCO's registration.
In terms of potential breaches and the consequences thereof, the Customs Act 1901 does not explicitly outline specific offences or penalties for failing to comply with the TCO provisions. However, general provisions within the Act likely apply, which could result in civil or criminal penalties for non-compliance with customs regulations. For example, knowingly making a false statement in a customs document could result in a penalty of up to five times the amount of duty and goods and services tax (GST) that would have been payable on the goods if they were dutiable, or a fine of up to $22,200 if the amount cannot be determined. Additionally, criminal prosecution could lead to fines and imprisonment, depending on the severity and intent of the breach.