EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516516
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.
Gemini Bicycle Centres Pty Ltd applied for a TCO in respect of certain pedal driven cycles on 21 November 2005.
Instrument
TCO No 0516516 was made on 13 February 2006. It declares that those certain pedal driven cycles 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. 0516516 is taken to have come into force on 21 November 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) to reduce or eliminate customs duty on certain imported goods. The problem this legislation addresses is the potential disadvantage faced by Australian businesses that cannot produce certain goods domestically, particularly when these goods can be sourced more cheaply overseas. By introducing TCOs, the Act aims to level the playing field for these businesses, allowing them to compete more effectively in the domestic market. TCO No. 0516516, made under this scheme on 13 February 2006, grants tariff concessions for certain pedal-driven cycles, setting their customs duty rate to free, subject to specific conditions being met. This measure was introduced to support the local market by facilitating the importation of these goods without the burden of customs duty, thereby promoting economic efficiency and consumer choice.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0516516, applies to any individual or entity seeking to import pedal driven cycles into Australia. This instrument pertains to those specific goods that are subject to the application of Tariff Concession Orders (TCOs) as per the Act. The application of this instrument is limited to the goods specified in the TCO, and it does not extend to any other goods not listed. The geographical scope of the Act is national, applying across Australia as a Commonwealth Act. The Act does not explicitly state any exclusions, but it implicitly excludes goods that are produced in Australia and can be considered substitutable as per the definitions provided in the Act. The Act may be further refined or extended through subordinate instruments, although no such instruments are mentioned in the explanatory statement.
The Tariff Concession Instrument No. 0516516 was made on 13 February 2006 and is effective from 21 November 2005, the date on which the application was lodged. The instrument declares that certain pedal driven cycles are subject to a lower rate of customs duty, specifically zero percent, as no substitutable goods were produced in Australia on the day of the application. The instrument ensures that the rights of the person who applied for the concession are not adversely affected and does not impose any liabilities on any person, including the applicant. The rights of importers of these goods will be positively affected as they may apply for a refund of duty on imports made since the effective date of the TCO.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which are orders that can lower the customs duty on certain goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to goods. If the CEO is satisfied that the application is not for goods that are prohibited from such concessions under section 269SJ, the CEO must then determine whether the application meets the core criteria outlined in section 269C. According to this section, the application will meet the core criteria if, on the day it was lodged, no goods that could substitute the ones in question were being produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
The obligations imposed by the Customs Act on the CEO, as per section 269P(3), require them to issue a written order if they are satisfied that the application meets the core criteria. This order, a TCO, will declare the goods subject to the application as being subject to a specified item in Schedule 4 to the Customs Tariff Act 1995. Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. However, in the case of TCO No. 0516516, no such submissions were received.
The consequences for breach or non-compliance with the requirements of the Customs Act are outlined in various sections. For example, failure to comply with the Act’s provisions may result in legal actions being taken against the non-compliant party, with potential penalties including fines or imprisonment depending on the severity and nature of the breach. The specific penalties are determined by the relevant sections of the Act and any applicable regulations. In the context of TCOs, while the Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession, it also provides mechanisms for importers to apply for duty refunds on goods imported since the TCO was taken to have come into force, as stipulated under paragraph 126(1)(r) of the Regulations.