EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051419
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.
Silex Solar Pty Ltd applied for a TCO in respect of certain solar panel laminating machines on 22 November 2010.
Instrument
TCO No 1051419 was made on 28 February 2011. It declares that those certain solar panel laminating machines 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. 1051419 is taken to have come into force on 22 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 Tariff Concession Instrument No. 1051419 was enacted in 2011 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically. This instrument was introduced to facilitate the importation of goods that are essential for industries that are in their infancy or have unique needs within Australia. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce or eliminate customs duties on specified goods, provided they are not replaceable by domestically produced alternatives. This initiative aims to foster growth in new industries by making imported goods more competitively priced, without imposing any liabilities on individuals or entities other than the Commonwealth. The instrument was effective from the date the application was lodged, 22 November 2010, and importers of the affected goods can apply for a refund of duty paid since this date.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1051419, facilitates the application of a reduced rate of customs duty on certain specified goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking a tariff concession for goods not produced in Australia in the ordinary course of business, and specifically those that do not fall within the exclusions outlined in section 269SJ of the Act. The geographic reach of this legislation is national, applying throughout the Commonwealth of Australia. The CEO is mandated to assess applications against the criteria set out in sections 269C, 269B, and 269D of the Act, determining whether a TCO should be granted based on the absence of substitutable goods produced domestically. The instrument in question, TCO No. 1051419, pertains to solar panel laminating machines, granting a zero duty rate on these items. The Act extends its application through subordinate instruments, allowing for further refinement and implementation of the tariff concession scheme.
Key Provisions
The Customs Act 1901 (the Act) outlines a scheme through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) under section 269F (1). These TCOs apply lower rates of customs duty to specified goods. For instance, Silex Solar Pty Ltd successfully applied for a TCO concerning certain solar panel laminating machines, which were declared to be subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (section 269P(3)).
Part XVA of the Act imposes several obligations and requirements on the parties involved. Firstly, applicants must ensure that their application is not for goods specified in section 269SJ of the Act, which are ineligible for TCOs. The CEO is required to assess whether the application meets the core criteria, particularly if no substitutable goods are produced in Australia as per section 269C. Definitions of terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Furthermore, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties once an application is deemed valid under subsection 269K(1).
In terms of compliance, the CEO must make a written order if the application meets the core criteria, as outlined in section 269P(3). The TCO is deemed to come into effect on the date the application was lodged (subsection 269S(1)). Notably, the TCO does not affect existing rights or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's effective date (section 269S(1)).
There are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the TCO provisions within this explanatory statement. However, any non-compliance with the terms of the TCO or the Act generally could potentially lead to legal actions under the relevant sections of the Customs Act 1901. The implications of such actions would depend on the specifics of the breach and the applicable laws at the time.