EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1018398
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.
Australian Solar Manufacturing Pty Ltd applied for a TCO in respect of certain photovoltaic solar modules frames on 22 April 2010.
Instrument
TCO No 1018398 was made on 19 July 2010. It declares that those certain photovoltaic solar modules frames 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. 1018398 is taken to have come into force on 22 April 2010.
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 Parliament of Australia, provides for the administration of customs and excise duties, including the establishment of a scheme for Tariff Concession Orders (TCOs). The Act was introduced to address the need for a mechanism that could allow for the reduction or exemption of customs duties on certain goods under specific conditions, thus fostering trade and economic development. This particular piece of legislation, F2010L02672, relates to Tariff Concession Instrument No. 1018398, which was introduced to grant tariff concessions on photovoltaic solar module frames, ensuring they are imported at a reduced or no duty rate, thus supporting the Australian solar manufacturing sector. The explanatory statement details the process and decision-making criteria for the Chief Executive Officer of Customs, ensuring transparency and compliance with the legislative intent of fostering economic activities while maintaining a fair trade environment.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty on specific goods. This mechanism is accessible to any person who can demonstrate that the goods in question are not produced domestically in the ordinary course of business and do not have substitutable alternatives available in Australia. Such applications must meet the core criteria set out in the Act, including the absence of domestic production of substitutable goods. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, specifying the goods and the reduced duty rate applicable to them. In the case of Tariff Concession Instrument No. 1018398, photovoltaic solar module frames were granted a concession, resulting in a zero duty rate, which contrasts with the general 5% rate. The instrument's commencement date is the date of application, 22 April 2010, and it does not retroactively disadvantage or impose new liabilities on any party other than the Commonwealth, while potentially benefiting importers through duty refunds.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269F, 269B, 269D, 269E, 269P(3) and 269K(1) of the Customs Act 1901, establish a framework for the application and issuance of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as specified in the TCO (section 269P(3)). This legislative framework also mandates the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be made (section 269K(1)). The TCOs are effective from the date the application is lodged (subsection 269S(1)).
The obligations and requirements imposed by this Act on the parties it governs are primarily procedural. The CEO of Customs must assess each application to ensure it meets the core criteria, specifically that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). Once the CEO is satisfied that the application meets these criteria, they must issue a TCO and publish a notice in the Gazette to allow for any objections (sections 269K(1) and 269P(3)). The CEO must also ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the issuance of the TCO (subsection 269S(2)).
In terms of penalties and consequences for breach, the Customs Act 1901 does not specify penalties for failing to comply with the obligations set out in the Act. However, any breaches of the Act or associated regulations could potentially lead to legal action or administrative penalties as provided under other sections of the Customs Act 1901. The specifics of such penalties would depend on the nature and severity of the breach.
It is important to note that the Tariff Concession Orders themselves do not impose any liabilities on any person. The rights of importers are beneficially affected, and they may apply for a refund of duty on goods imported since the day the TCO came into force (paragraph 126(1)(r) of the Regulations). The Act ensures that the TCOs do not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO.