EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814152
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.
Bikesportz Import Pty Ltd applied for a TCO in respect of certain bicycle bags on 23 June 2008.
Instrument
TCO No 0814152 was made on 08 September 2008. It declares that those certain bicycle bags 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. 0814152 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Australian Parliament, facilitates the application of reduced customs duties on specific goods through Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, apply to goods for which no substitutable goods are produced in Australia, as outlined in section 269C of the Act. The introduction of the Customs Act 1901 and its subsequent amendments, including the scheme for TCOs, addresses the need to provide competitive advantages to Australian importers by reducing the cost of imported goods, thereby encouraging trade and economic growth. The policy objective is to enhance the efficiency and competitiveness of Australian industries by providing tariff relief where appropriate, ensuring that the importation of certain goods does not incur prohibitive duties.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concessions on certain goods via Tariff Concession Orders (TCOs) issued by the Chief Executive Officer of Customs. This mechanism applies to individuals or entities seeking a lower rate of customs duty on goods that meet specific criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The application process necessitates satisfying the core criteria set out in section 269C of the Act, and any goods subject to a TCO are detailed in Schedule 4 to the Customs Tariff Act 1995. The legislation is of Commonwealth jurisdiction and applies nationally. Notably, certain goods specified in section 269SJ of the Customs Act 1901 are ineligible for tariff concessions. The scope of the Act is further extended or restricted through subordinate instruments, such as the Customs (Tariff Concessions) Regulations 2012, which provide detailed procedural and operational guidelines for the application and administration of TCOs.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269S. Section 269C (1) of the Customs Act 1901 outlines the criteria that must be met for an application for a Tariff Concession Order (TCO) to be successful. Specifically, the application must meet the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P (3) states that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This written order is the TCO. Section 269S (1) indicates that a TCO is taken to have come into force on the day the application for the TCO was lodged, meaning that the concessional tariff rates apply retroactively from the date of application.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure that their applications meet the core criteria as defined by section 269C. This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business. The CEO of Customs has the obligation to review applications and make a determination based on these criteria. Furthermore, under section 269K (1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. In this case, the CEO did not receive any submissions, which may indicate a consensus or lack of opposition to the proposed concession.
Any breaches of the conditions set by the TCO or failure to comply with the obligations outlined in the Customs Act 1901 may lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs laws generally can result in fines and, in severe cases, imprisonment. The maximum penalties for customs-related offences can vary significantly depending on the nature and severity of the breach, but they may include substantial fines and/or imprisonment terms as stipulated by the relevant sections of the Customs Act and other applicable legislation. It is also worth noting that the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities on individuals or entities, ensuring that no one is disadvantaged by the retroactive application of the concession.