EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001553
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.
Rinnai Australia applied for a TCO in respect of certain gas fired solar water heater boosters on 08 January 2010.
Instrument
TCO No 1001553 was made on 08 April 2010. It declares that those certain gas fired solar water heater boosters 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. 1001553 is taken to have come into force on 08 January 2010.
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 Tariff Concession Instrument No. 1001553, enacted in 2010, is an instrument under the Customs Act 1901 designed to address the need for tariff concessions for certain goods. This instrument was introduced to provide relief on customs duties for specific products not produced domestically, thereby encouraging their importation and use. The instrument was formulated to meet the core criteria stipulated in section 269C of the Act, ensuring that no substitutable goods were produced in Australia at the time of the application. The instrument was enacted by the Chief Executive Officer of Customs following an application by Rinnai Australia for a tariff concession on certain gas-fired solar water heater boosters. The application was successful as it was determined that no substitutable goods were produced in Australia, aligning with the objectives of the Customs Act to facilitate trade and economic efficiency. The instrument, which took effect on the date the application was lodged, provides a zero-rate duty for these specified goods, differing from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 1001553, under the Customs Act 1901, applies to specific gas fired solar water heater boosters, as determined by the Chief Executive Officer of Customs (CEO) following an application by Rinnai Australia. The instrument was enacted to provide a tariff concession, reducing the duty on these goods from 5% to free, effective from the date of the application, 8 January 2010. The application process involved a determination that no substitutable goods were produced in Australia, fulfilling the core criteria set out in section 269C of the Act. The instrument’s geographic and jurisdictional reach is within the Commonwealth, specifically governed by federal customs laws. There are no exclusions, exemptions, or thresholds specified within the primary text of this particular instrument, although the general framework of the Customs Act 1901 may encompass various conditions and exceptions. The instrument does not disadvantage any person or impose liabilities on anyone for actions taken before its registration date.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) include sections 269F, 269C, 269B, and 269P. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Finally, subsection 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written order (TCO) must be made, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
Under the Act, entities or individuals applying for a TCO must ensure that their application meets the core criteria. Specifically, they must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO has an obligation to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. This process ensures transparency and allows for potential objections to be considered before the TCO is issued.
Failure to comply with the provisions of the Customs Act 1901, including improper applications for TCOs or non-compliance with the notification requirements, could result in legal consequences. Although the explanatory statement does not detail specific penalties, breaches of customs laws generally can result in significant fines and other penalties. The exact penalties would depend on the severity of the breach and could include both civil and criminal sanctions, with the potential for imprisonment and substantial financial penalties.
In summary, the key provisions of the Customs Act 1901 and the accompanying Explanatory Statement outline the process for applying for and issuing a Tariff Concession Order. They mandate specific criteria for applications, require the CEO to publish notices inviting objections, and ensure that the rights of importers are protected. Failure to comply with these provisions could lead to legal consequences, although specific penalties are not detailed in the explanatory statement.