EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1050462
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.
Mitsubishi Australia Ltd applied for a TCO in respect of certain solar powered hot air receivers on 15 November 2010.
Instrument
TCO No 1050462 was made on 07 February 2011. It declares that those certain solar powered hot air receivers 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. 1050462 is taken to have come into force on 15 November 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 for the imposition of customs duty on imported goods. Within this framework, the Customs Act 1901 facilitates the application of tariff concessions through Tariff Concession Orders (TCOs), which can reduce or eliminate duty on specified goods under certain conditions. The Act was amended to introduce this scheme to support domestic industries by allowing for tariff concessions where substitutable goods are not produced domestically. Tariff Concession Instrument No. 1050462 was introduced to provide tariff concessions for certain solar powered hot air receivers, recognising that no substitutable goods were being produced in Australia at the time of application. The policy objective here is to encourage the importation of specific goods that are not domestically produced, thereby supporting industry development and consumer access to these products.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia. It is a Commonwealth Act, thus it has a national reach across all states and territories of Australia. Specifically, Tariff Concession Orders (TCOs) under Part XVA of the Act apply to applications made to the Chief Executive Officer of Customs for a reduction in customs duty on certain goods. The Act allows for the application of a lower rate of duty if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The Act does not apply to goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The scope of the Act can be extended or restricted through subordinate instruments, which may provide further definitions and criteria for the application and implementation of TCOs.
Key Provisions
The Tariff Concession Instrument No. 1050462, made under the Customs Act 1901, outlines the process and criteria for granting tariff concessions on certain solar powered hot air receivers. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The CEO must consider whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. If the criteria are met, the CEO must issue a written TCO, as stipulated in section 269P(3). The instrument declares that the specified solar powered hot air receivers are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, granting them a duty-free rate.
The Act imposes specific obligations on applicants and the CEO. Applicants must ensure their goods meet the criteria for a TCO, particularly the absence of substitutable goods produced in Australia. The CEO is mandated to review applications thoroughly, consult with relevant parties, and publish notices inviting submissions from any interested parties, as required by section 269K(1). The CEO must also decide on the application based on the evidence and criteria provided under section 269C and 269P(3).
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may lead to various consequences. Although specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally may result in fines or other penalties as outlined in the Act. The severity of the penalty would depend on the nature and extent of the breach. Additionally, incorrect or misleading information provided in an application may be considered an offence under the Act, potentially leading to legal action.
Under section 269S(1), the TCO is deemed to have come into force on the date the application was lodged, which in this case is 15 November 2010. The rights of importers are positively affected, as they may apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth and does not disadvantage any person's rights as at the date of registration.