EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607542
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.
Energy Conservation Systems applied for a TCO in respect of certain water heaters on 1 May 2006.
Instrument
TCO No 0607542 was made on 21 July 2006. It declares that those certain water heaters 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 0%.
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. 0607542 is taken to have come into force on 1 May 2006.
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 to regulate the importation of goods into Australia, among other purposes. This Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The introduction of this scheme aimed to provide tariff relief on certain goods that meet specific criteria, particularly where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0607542, made on 21 July 2006, exemplifies this scheme by granting a zero percent duty rate on certain water heaters, as per the application by Energy Conservation Systems, which was approved on 1 May 2006. The CEO was satisfied that no substitutable goods were produced in Australia for these water heaters, thus meeting the core criteria for the concession. This instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities, while allowing importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0607542, made under the Customs Act 1901, applies to specific goods that are subject to a Tariff Concession Order (TCO). This Act enables the Chief Executive Officer of Customs to issue TCOs, which provide for a lower rate of customs duty on certain goods, provided the application meets specified core criteria. The process involves an application being lodged by a person, who must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby ensuring that the concession does not undermine domestic production. The instrument applies to any person or entity applying for a TCO and importing the specified goods, subject to the conditions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. This legislation operates nationally across Australia and applies to all imports of the specified goods subject to the TCO. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, including the Commonwealth. The TCO is effective from the date the application was lodged, in this case, 1 May 2006. Any subordinate instruments or regulations that may extend or further specify the application of this TCO are to be determined in accordance with the relevant provisions of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269K, and 269P of the Customs Act 1901, as well as subsection 269S(1) of the same Act. Section 269F allows for the application for a Tariff Concession Order (TCO) to the Chief Executive Officer of Customs (CEO) regarding goods. Section 269C provides the criteria for a TCO application to be considered, particularly focusing on the absence of substitutable goods produced in Australia. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written TCO. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not proceed. Subsection 269S(1) specifies that the TCO comes into force on the day the application is lodged.
The obligations imposed by this legislation on parties include ensuring that applications for TCOs meet the core criteria set out in section 269C. The CEO has a duty to review applications and determine whether they meet these criteria, as outlined in section 269F. The CEO must also publish a notice in the Gazette as soon as practicable after accepting an application as valid, per section 269K. If the CEO decides to issue a TCO, they must do so in writing, as stipulated in section 269P. Additionally, the TCO must be crafted to ensure it does not disadvantage any person or impose liabilities for actions taken before its registration, as per the relevant subsections of the Act.
The legislation does not explicitly detail offences or penalties for breach within the explanatory statement provided. However, general provisions of the Customs Act 1901 and associated regulations would likely apply in cases of non-compliance or improper application of TCOs. These could include administrative penalties, fines, or other enforcement actions under the Customs Act. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in the broader regulatory framework governing customs and tariff concessions.