EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513656
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.
Sports Nutz Pty Ltd applied for a TCO in respect of certain Non Motorised Scooters on 10 October 2005.
Instrument
TCO No 0513656 was made on 20 February 2006. It declares that those certain Non Motorised Scooters 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. 0513656 is taken to have come into force on 10 October 2005.
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. 0513656, enacted in 2006, amends the Customs Act 1901 to address the issue of providing tariff concessions for certain goods that are not produced in Australia and for which no substitutable goods are available domestically. This instrument was developed under the authority of the Chief Executive Officer of Customs, who is empowered by section 269F of the Act to make Tariff Concession Orders (TCOs) if certain criteria are met. The policy objective of this instrument is to provide relief in the form of lower customs duties for importers of specific goods, in this case, Non Motorised Scooters, by applying a zero percent duty rate instead of the general rate of five percent. This change aims to benefit importers by potentially reducing their costs and increasing the affordability of these goods within the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0513656, pursuant to the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods, particularly in this case, Non Motorised Scooters. The instrument authorises the Chief Executive Officer of Customs to grant tariff concessions when the application meets the core criteria stipulated in the Act, such as the absence of substitutable goods produced in Australia. The concession reduces the duty on these scooters from a general rate of 5% to 0%, effective from the date the application was lodged. This concession applies across the Commonwealth of Australia, extending its reach to all importers and entities involved in the importation of the specified goods. The Act does not apply to goods listed in section 269SJ, which cannot be subject to tariff concessions. Furthermore, the instrument's application is not retroactive, meaning it does not affect the rights of any person in relation to actions taken before the instrument's effective date, thus protecting importers from any disadvantage or liabilities incurred prior to the concession.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) by interested parties, which can lead to a reduced rate of customs duty on certain goods. If a TCO application is submitted and meets the criteria outlined in sections 269C, 269B, and 269D, the Chief Executive Officer of Customs (CEO) is required to make a written order (section 269P(3)). In this case, TCO No. 0513656 was issued for certain Non Motorised Scooters, declaring that these goods are subject to a 0% duty rate instead of the general 5% rate.
The obligations imposed on parties by the Customs Act 1901 include the requirement for the CEO to evaluate TCO applications based on specific criteria and to publish notices in the Gazette inviting submissions from interested parties. Section 269K(1) mandates that such notices must be published as soon as practicable after an application is deemed valid. In this instance, no submissions were received in response to the published notice for TCO No. 0513656.
The Act also specifies that a TCO is effective from the date the application is lodged, as per subsection 269S(1). Therefore, TCO No. 0513656 is effective from 10 October 2005, the date the application was submitted. It is important to note that this legislation does not retroactively affect the rights of any person, except the Commonwealth, nor does it impose any liabilities on individuals or entities in relation to actions taken prior to the registration date of the TCO.
Under the Customs Act 1901, any breach of the provisions related to TCOs could lead to civil or criminal penalties. The Act does not specify particular offences or penalties for the misuse or incorrect application of a TCO; however, general provisions of the Customs Act 1901 and related legislation could apply. For instance, knowingly providing false information in a TCO application could result in penalties as stipulated under the general customs laws, which may include fines or imprisonment depending on the severity of the offence.