EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135316
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 system film on 21 October 2011.
Instrument
TCO No 1135316 was made on 16 January 2012. It declares that those certain photovoltaic system film 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. 1135316 is taken to have come into force on 21 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, establishes a framework through which the Chief Executive Officer of Customs may issue Tariff Concession Orders (TCOs), providing reduced rates of customs duty on specified goods. The 2012 Tariff Concession Instrument No. 1135316 was introduced to address the issue of applying lower duty rates to goods for which no substitutable goods were produced in Australia. This instrument, issued in response to an application by Tindo Pty Ltd for certain photovoltaic system film, was made under the authority of the Customs Act 1901, specifically section 269C, which mandates that a TCO application meets core criteria if no substitutable goods are produced in Australia. The policy objective was to facilitate the importation of these specific goods by removing the duty rate, thereby encouraging their use and potentially stimulating related industries. The instrument came into effect on the date the application was lodged, 21 October 2011, without affecting any pre-existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty to specified goods. This legislative framework allows entities or individuals to apply for tariff concessions on goods not produced in Australia and not listed in section 269SJ of the Act, provided the application meets the core criteria outlined in sections 269C and 269D. For example, Tindo Pty Ltd successfully applied for a TCO concerning photovoltaic system film, resulting in the instrument TCO No. 1135316, which sets a zero rate of duty for these goods. This Act operates at the national level and includes a consultation process where interested parties can lodge submissions if they oppose the TCO. The TCO does not retroactively affect the rights of individuals or entities, ensuring that it only benefits those importing the specified goods post-registration.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1135316, made under the Customs Act 1901, provide for a tariff concession order (TCO) to be issued in respect of certain photovoltaic system film (sections 269C, 269P(3), and 269S(1)). This instrument declares that the photovoltaic system film is subject to a TCO, which allows for a reduced rate of customs duty. Section 269C stipulates that a TCO will be issued if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods were produced in Australia on the date the application was lodged, meaning that the CEO must ensure that no equivalent products were being manufactured domestically at the time of the application.
The obligations imposed by the Act on the parties it governs are primarily directed at the CEO of Customs. The CEO must review the TCO application and determine if it meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was made. Additionally, upon accepting the application, the CEO is required to publish a notice in the Gazette inviting any person to lodge submissions opposing the TCO, as per subsection 269K(1). In this instance, the CEO did not receive any submissions against the TCO.
Should there be a breach of the conditions outlined in the Act or in the TCO, there are potential civil and criminal consequences. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 can generally lead to civil penalties, including fines, or criminal penalties, which can include imprisonment, depending on the nature and severity of the breach. The precise penalties would be determined by the court based on the specific circumstances of the case. However, it is clear that any breach of the tariff concession order could have serious repercussions, including the possibility of the concession being revoked or the imposition of retrospective duties.