EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932867
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.
Michael J Bowen And Associates applied for a TCO in respect of certain unicycles on 04 September 2009.
Instrument
TCO No 0932867 was made on 20 November 2009. It declares that those certain unicycles 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. 0932867 is taken to have come into force on 04 September 2009.
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. 0932867, enacted in 2009, is a legislative measure designed to address the issue of providing tariff concessions for specific goods not produced domestically, thereby promoting fair trade and reducing the cost burden on importers. This instrument operates under the framework established by Part XVA of the Customs Act 1901, which empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the customs duty on certain imported goods. The Act was introduced to ensure that goods that are not produced in Australia, and for which no suitable substitutes are manufactured locally, are subject to lower customs duty rates, thus aligning with the policy objective of facilitating trade and supporting importers.
The Australian Parliament enacted this legislation to fill a gap in the existing customs tariff framework, ensuring that businesses importing non-substitutable goods from overseas are not unfairly disadvantaged by high customs duties. By applying a concessional rate of customs duty on such goods, the legislation aims to enhance the competitiveness of Australian businesses and consumers by providing access to a wider range of affordable imported products. This approach is consistent with the overarching policy objective of promoting efficient and fair trade practices.
Scope and Application
The Tariff Concession Instrument No. 0932867 under the Customs Act 1901 applies to specific goods identified in the application made by Michael J Bowen And Associates for a Tariff Concession Order (TCO). This Act allows the Chief Executive Officer of Customs (CEO) to establish a lower rate of customs duty for goods that meet certain criteria, as long as they are not specified in section 269SJ of the Act, which details goods ineligible for TCOs. The application process involves determining whether no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E of the Act. Upon meeting these criteria, the CEO issues a written order, a TCO, declaring that the specified goods are subject to a lower duty rate, as set out in Schedule 4 to the Customs Tariff Act 1995. This particular TCO applies to certain unicycles, which are now subject to a free duty rate instead of the general 5% rate. The geographic reach of this Act is national, applying across all states and territories of Australia. The Act does not disadvantage any person, including importers, who can benefit from refunds on duties paid on goods imported since the TCO came into force on 04 September 2009. The CEO is required to consult by publishing a notice in the Gazette, inviting submissions from any interested parties; however, in this case, no submissions were received.
Key Provisions
The Tariff Concession Instrument No. 0932867 made under the Customs Act 1901 provides a reduced rate of customs duty for certain unicycles. Specifically, Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a Tariff Concession Order (TCO) if the application for the concession meets the core criteria, which include the absence of substitutable goods produced in Australia (Section 269C). This means that if no similar goods are being produced domestically, the CEO must issue a TCO, making the customs duty for the specified unicycles free instead of the usual 5% (Section 269P(3)).
Entities or individuals applying for a TCO must ensure their application satisfies the criteria outlined in the Act. Under Section 269F, an application for a TCO can only be made in respect of goods not specified in Section 269SJ, which lists goods that cannot be subject to a TCO. The applicant must also provide evidence that no substitutable goods are produced in Australia on the day the application is lodged (Section 269C). Once the CEO is satisfied with the application, they must issue a written TCO (Section 269P(3)).
Failing to comply with the requirements of the Customs Act 1901, including submitting false information in a TCO application, may result in legal consequences. Although the specific penalties for non-compliance are not detailed in the explanatory statement, it is known that breaches of the Customs Act can lead to both civil and criminal penalties. Civil penalties might include fines and the recovery of any financial benefits gained from the breach, while criminal penalties could involve imprisonment, depending on the severity and intent of the breach. The maximum penalties for such offences are not specified in this explanatory statement but can be found in the relevant sections of the Customs Act 1901.