EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134258
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 conductor assemblies on 11 October 2011.
Instrument
TCO No 1134258 was made on 04 January 2012. It declares that those certain photovoltaic module conductor assemblies 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. 1134258 is taken to have come into force on 11 October 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, facilitates the granting of Tariff Concession Orders (TCOs) through its Part XVA. This legislation was introduced to address the need for tariff concessions on certain goods, thereby reducing customs duty on specific items not produced domestically in the ordinary course of business. The Tariff Concession Instrument No. 1134258, made under this Act, is a practical application of these provisions. This particular instrument, issued in 2012, was in response to an application by Tindo Pty Ltd for a TCO concerning photovoltaic module conductor assemblies, granting them a tariff concession and setting their duty rate at free, as no substitutable goods were produced in Australia. The process for making such concessions involves an assessment by the Chief Executive Officer of Customs, with a requirement to consult the public before any final decision, ensuring transparency and fairness in the application of the tariff concessions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which apply to goods for which a lower rate of customs duty is mandated. The Chief Executive Officer of Customs (CEO) is responsible for making these orders when satisfied with an application under section 269F. The application process involves ensuring that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs, and meet the core criteria outlined in section 269C. This section stipulates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined in sections 269D, 269E, and 269B respectively. If the CEO determines that the application meets these criteria, they must issue a TCO under section 269P(3), as seen in TCO No. 1134258, which pertains to photovoltaic module conductor assemblies, reducing the duty from 5% to free. The CEO is also mandated by section 269K(1) to publish a notice in the Gazette inviting submissions on the proposed TCO, although no submissions were received for this particular case. The TCO, effective from the date of application under section 269S(1), does not retroactively affect the rights of any person, thereby protecting existing rights and imposing no new liabilities.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the process and criteria for making Tariff Concession Orders (TCOs) as detailed in sections 269C, 269F, and 269SJ. The Act allows for the application of a lower rate of customs duty on goods specified in a TCO. A person can apply to the Chief Executive Officer of Customs (CEO) for a TCO under section 269F, provided the goods are not specified in section 269SJ. The CEO must then determine whether the application meets the core criteria, primarily focusing on whether no substitutable goods were produced in Australia on the application day, as per section 269C. If satisfied, the CEO must make a written order under subsection 269P(3) declaring the goods subject to the TCO.
The obligations under this legislation primarily involve the CEO assessing applications for TCOs against the criteria set out in the Act. The CEO must ensure that applications are not for goods specified in section 269SJ, verify the absence of substitutable goods produced in Australia, and make a written order if the core criteria are met. Tindo Pty Ltd's application for photovoltaic module conductor assemblies led to TCO No. 1134258, which came into force on 11 October 2011, as the CEO was satisfied that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in this instance.
The legislation imposes civil consequences for non-compliance, though it does not explicitly outline penalties. However, if the CEO fails to properly assess an application or improperly grants a TCO, this could potentially lead to disputes and legal challenges. The TCO does not affect the rights of any person as at the date of registration and does not impose liabilities on any person, as stipulated under section 269S(1). This ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of duty on goods imported since the TCO came into force under Regulation 126(1)(r).
In terms of offences and penalties, the Act does not specify criminal penalties for breaches of TCO provisions. However, failure to adhere to the outlined processes or incorrect decisions by the CEO could result in civil actions, such as judicial review or compensation claims. The absence of specific penalties in the text implies that the primary recourse in case of non-compliance would be through civil litigation, rather than criminal sanctions.