EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042638
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.
Panasonic Australia applied for a TCO in respect of certain led panels on 16 September 2010.
Instrument
TCO No 1042638 was made on 06 December 2010. It declares that those certain certain led panels 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. 1042638 is taken to have come into force on 16 September 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 Australian Parliament, provides the legal framework for the administration of customs and excise duties in Australia. One particular aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which allows for reduced customs duty rates on certain goods. This mechanism was introduced to address the issue of ensuring that Australian industries are not unduly burdened by customs duties on goods that can be produced domestically or are readily available in the domestic market. The Tariff Concession Instrument No. 1042638, made on 6 December 2010, exemplifies this process, whereby Panasonic Australia successfully applied for a TCO for certain LED panels, resulting in a concession from the general duty rate of 5% to free duty. The policy objective is to foster fair competition and support Australian manufacturing by reducing the duty on imported goods where suitable domestic alternatives are not produced.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to goods that benefit from a lower rate of customs duty. An application for a TCO can be made by any person, provided the goods in question do not fall under the list specified in section 269SJ of the Act, which identifies goods ineligible for tariff concessions. The CEO must determine if the application meets the core criteria outlined in section 269C, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the core criteria are met, the CEO is mandated to issue a written order specifying the application of a prescribed tariff item to the goods. This legislative instrument applies across the Commonwealth of Australia, impacting all entities involved in the importation of the specified goods, thereby offering them a tariff concession. Any rights of the Commonwealth or third parties are protected under the Act to ensure that the concession does not disadvantage or impose liabilities for actions prior to the concession order.
Key Provisions
The main operative sections of Tariff Concession Order No. 1042638, as established under the Customs Act 1901 (section 269F), allow for the application for tariff concessions on specific goods. When an application is submitted and deemed valid by the Chief Executive Officer of Customs (CEO) (section 269C), a Tariff Concession Order (TCO) can be made if no substitutable goods are produced in Australia (section 269P(3)). This TCO reduces the customs duty on the specified goods, in this case, certain LED panels, from the general rate of 5% to free (section 50 of Schedule 4 to the Customs Tariff Act 1995).
The Act imposes several obligations on the parties involved. For instance, the CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Tariff applies (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCO (subsection 269K(1)). In this case, no objections were received.
Any breach of the obligations set out in the Customs Act 1901 may result in civil or criminal penalties. While the explanatory statement does not specify penalties, the Act generally provides for fines and imprisonment for serious breaches. The specific penalties would depend on the nature and severity of the breach. The Tariff Concession Order itself does not impose any liabilities on any person, ensuring that the rights of importers will be beneficially affected, particularly with regard to refunds of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).