EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814154
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 case on 23 June 2008.
Instrument
TCO No 0814154 was made on 08 September 2008. It declares that those certain bicycle case 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. 0814154 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 Tariff Concession Instrument No. 0814154 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, certain bicycle cases, by the Chief Executive Officer of Customs. The instrument was introduced to allow for a lower rate of customs duty on these goods, as stipulated under Part XVA of the Act, and to streamline the application process for tariff concessions. The policy objective, as outlined in the Act, is to provide relief to importers by reducing the customs duty on specified goods, thereby making them more competitive and accessible in the Australian market. The Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework for customs duties and the mechanism through which tariff concessions can be granted. This particular instrument was made on 8 September 2008, following an application by Bikesportz Import Pty Ltd on 23 June 2008, and came into effect on the date of the application, ensuring that importers could benefit from the reduced duty rate retroactively.
Scope and Application
The Tariff Concession Instrument No. 0814154 under the Customs Act 1901 applies to goods specified in the instrument, specifically certain bicycle cases, for which Bikesportz Import Pty Ltd applied. The instrument was made by the Chief Executive Officer of Customs and it exempts these goods from the general rate of customs duty, which is 5%, by applying a rate of duty that is free. This Act applies to entities and individuals involved in the importation of these specific goods, particularly those importing bicycle cases, within the Commonwealth of Australia. The instrument is effective from the date the application was lodged, which is 23 June 2008, and does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken prior to the registration of the concession. Additionally, the instrument does not alter any pre-existing rights of importers, who may benefit from applying for a refund of duties paid on goods imported since the effective date of the concession. The scope of the Act is further extended through subordinate instruments, which may provide additional criteria and procedures for the application and enforcement of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0814154 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria (section 269C), they must issue a written order that specifies the goods to which the concession applies. For the specific case of the bicycle cases, section 269P(3) of the Act was satisfied, leading to the issuance of TCO No. 0814154 on 08 September 2008, declaring that certain bicycle cases are subject to a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must consider whether an application for a TCO meets the core criteria and, if so, issue a written order. This process includes ensuring that the application is not in respect of goods specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. Additionally, as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received in response to the published notice.
The Customs Act 1901 imposes civil and criminal consequences for breaches of the Act. While the Explanatory Statement does not detail specific penalties for breaches related to the issuance of a TCO, it is understood that breaches of the Customs Act generally can result in both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment, reflecting the seriousness with which the Australian Government treats breaches of customs legislation. The maximum penalties would depend on the specific nature and severity of the breach.
The TCO No. 0814154 does not affect the rights of any person other than the Commonwealth as at the date of registration in a manner that would disadvantage that person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration. Instead, it beneficially affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. Importantly, this TCO does not impose any liabilities on any person.