EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131510
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.
Tindo Pty Ltd applied for a TCO in respect of certain photovoltaic module production line on 14 September 2011.
Instrument
TCO No 1131510 was made on 12 December 2011. It declares that those certain photovoltaic modular production 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. 1131510 is taken to have come into force on 14 September 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, enacted by the Parliament of Australia, provides the legislative framework for the administration of customs and excise in Australia. Specifically, Part XVA of the Act outlines the procedure for making Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. The 2012 Tariff Concession Instrument No. 1131510 was introduced to address a specific application by Tindo Pty Ltd for a concession on certain photovoltaic module production lines. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria set out in the Act. Consequently, the TCO was made to provide a zero percent duty rate on these photovoltaic module production lines, effective from the date of the application, 14 September 2011. The policy objective of this measure is to encourage the production of renewable energy technology within Australia, thus supporting the growth of the domestic industry and contributing to the nation's energy sustainability goals.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. This Act applies to individuals or entities that seek to import goods eligible for tariff concessions, provided these goods are not listed in section 269SJ, which excludes certain goods from TCO eligibility. The application process requires that, on the date of the application, no substitutable goods are produced in Australia in the ordinary course of business. If the CEO determines that the application meets the core criteria, a TCO is issued, as was the case with Tindo Pty Ltd for their photovoltaic module production line. The instrument, TCO No. 1131510, was made on 12 December 2011, and it came into effect on the date of the application, 14 September 2011. The TCO impacts the importation of specified photovoltaic modules, granting them a free rate of duty instead of the general rate of 5%. The TCO does not retroactively disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the registration date.
Key Provisions
The Customs Act 1901, under section 269F, allows for the application of Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. The main operative sections, such as section 269C, require that a TCO application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further clarifies terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a written order under section 269P(3), declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. For instance, TCO No. 1131510, made on 12 December 2011, declared that certain photovoltaic modular production lines are subject to a duty rate of free, down from the general rate of 5%.
The Act imposes specific obligations on both applicants and the CEO. Applicants, such as Tindo Pty Ltd, must ensure their applications are valid and meet the core criteria outlined in the Act. The CEO is obligated to review the application, determine if it meets the criteria, and make a written order if satisfied. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 1131510, no submissions were received. This process ensures transparency and allows for public input before a TCO is issued.
Section 269S(1) of the Act specifies that a TCO comes into force on the day the application is lodged. This means that TCO No. 1131510 was effective from 14 September 2011. Importantly, the Act protects the rights of persons, excluding the Commonwealth, from any disadvantage or new liabilities imposed by the TCO in relation to actions taken before its registration. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in civil or criminal consequences. While the explanatory statement does not detail specific penalties, breaches of the Act could generally lead to fines, imprisonment, or both, depending on the severity of the breach. The exact penalties would be determined in the context of the specific breach and under relevant legislation.