EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116117
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.
Novatec Solar Liddell Pty Ltd applied for a TCO in respect of certain solar reflector assembly line on 23 May 2011.
Instrument
TCO No 1116117 was made on 22 August 2011. It declares that those certain solar reflector assembly line 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. 1116117 is taken to have come into force on 23 May 2011.
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 was enacted by the Australian Parliament and provides a framework for the regulation of customs and excise duties in Australia. One of the mechanisms introduced by this Act is the Tariff Concession Order (TCO), which allows for the reduction or elimination of customs duties on certain goods under specific circumstances. The Tariff Concession Instrument No. 1116117, made under the authority of the Customs Act, addresses the issue of providing tariff concessions for goods that are not produced domestically and for which there are no substitutable goods available in Australia. This instrument was designed to encourage the import and use of certain goods, such as the solar reflector assembly line applied for by Novatec Solar Liddell Pty Ltd, by reducing the customs duty rate from the general rate to free, thereby facilitating their entry into the Australian market and promoting economic benefits.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 1116117, applies to the application for tariff concessions on goods through the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders pertain specifically to goods that are not produced in Australia and do not correspond to any goods listed in section 269SJ of the Act, which excludes certain types of goods from the scope of the concession. The application process involves determining whether no substitutable goods are produced in Australia and whether the goods in question meet the core criteria specified in the Act. Once a TCO is granted, the goods subject to the order benefit from a reduced or free rate of customs duty, as opposed to the general duty rate applicable to similar goods. The instrument extends to the entire Commonwealth, with no specific geographic limitations beyond the scope of the Customs Act itself. The instrument does not disadvantage any existing rights of parties other than the Commonwealth and does not impose any new liabilities on individuals or entities. Additionally, the Act may be further extended or restricted through subordinate instruments, such as regulations, which can provide more detailed operational guidelines or additional criteria for the application of TCOs.
Key Provisions
The Tariff Concession Instrument No. 1116117, issued under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain solar reflector assembly lines. Section 269F of the Act enables an application for a TCO by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The CEO of Customs must assess whether the application meets the core criteria outlined in section 269C. This involves determining if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO, as per section 269P(3), specifying the applicable item in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. They must accept a valid TCO application, assess whether it meets the core criteria, and publish a notice in the Gazette inviting submissions from interested parties. The CEO must also consider any submissions received and decide whether to proceed with the TCO. In this instance, the CEO did not receive any submissions opposing the TCO. The Act ensures that the TCO does not affect the rights of any person adversely, as stated in section 269S(1), and that it does not impose any liabilities on individuals or entities other than the Commonwealth.
Breaches of the requirements set out in the Customs Act 1901 can lead to civil or criminal penalties. Although specific penalties for non-compliance with TCO provisions are not detailed in the explanatory statement, the general legal framework for Customs Act violations includes fines and imprisonment. For instance, misleading or false statements made in an application could lead to fines of up to $22,000 for individuals and $110,000 for corporations, along with potential imprisonment. The severity of penalties may vary depending on the nature and extent of the breach.