EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812324
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.
General Merchandise And Apparel applied for a TCO in respect of certain scooters on 12 June 2008.
Instrument
TCO No 0812324 was made on 22 August 2008. It declares that those certain 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 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. 0812324 is taken to have come into force on 12 June 2008.
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. 0812324, made under the Customs Act 1901, was enacted in 2008 to provide tariff concessions for specific goods. The Customs Act 1901 establishes a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs), which apply lower rates of customs duty to certain goods. This legislative instrument responds to the need for streamlined customs processes by facilitating the application of reduced tariff rates to imported goods, provided they meet specified criteria. The policy objective of the Act is to ensure that the application of tariff concessions does not disadvantage any person other than the Commonwealth and does not impose any new liabilities. The instrument was developed following an application by General Merchandise And Apparel for tariff concessions on certain scooters, leading to a concession that effectively set the duty rate for these goods at zero. The process involved publishing a notice in the Gazette to invite submissions, none of which were received, thus proceeding with the concession as requested.
Scope and Application
The Tariff Concession Instrument No. 0812324 under the Customs Act 1901 applies to specific goods, namely certain scooters, as declared by the Chief Executive Officer of Customs (CEO). The Act allows for the CEO to issue Tariff Concession Orders (TCOs) which result in a lower rate of customs duty for goods that meet certain criteria, such as not having substitutable goods produced in Australia in the ordinary course of business. The TCO applies to the scooters for which General Merchandise And Apparel lodged an application on 12 June 2008, and it came into force on the same date. The TCO specifically exempts these scooters from the general rate of duty, applying instead a duty rate of free. The scope of the Act is national, affecting the importation and duty payments of these particular goods across Australia. There are no exclusions or exemptions stated beyond those specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application of the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken prior to its registration.
Key Provisions
The Customs Act 1901, as amended, provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) under section 269F. An application for a TCO can be submitted by any person, and if it is not in respect of goods specified in section 269SJ, the CEO must determine if it meets the core criteria (section 269C). These criteria require that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied, they must make a written TCO (section 269P(3)).
In the case of TCO No. 0812324, the CEO issued a TCO for certain scooters on 22 August 2008, effective from 12 June 2008, the date the application was lodged. The TCO applied item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, instead of the general rate of 5%. This concession does not affect any rights or liabilities of persons other than the Commonwealth as at the date of registration and does not impose any liabilities. Importers can apply for a refund of duty on goods imported since the TCO's effective date.
The CEO is required to publish a notice in the Gazette inviting submissions on a TCO application, as per subsection 269K(1). However, in this case, no submissions were received. The TCO's commencement date is the date the application was lodged, ensuring that it does not disadvantage any person or impose liabilities for actions taken prior to registration.
The Customs Act 1901 imposes certain obligations on parties applying for TCOs. The applicant must ensure the application is not for goods specified in section 269SJ and that the core criteria are met. The CEO is obligated to consider the application, consult with stakeholders by publishing a notice in the Gazette, and decide whether to issue a TCO based on the criteria. Failure to comply with these obligations could result in legal challenges regarding the validity of the TCO. The Act also provides for civil and criminal penalties for breaches, including fines and imprisonment, as outlined in other sections of the Act.