EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933578
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.
Select Scootas applied for a TCO in respect of certain electric bicycles on 09 September 2009.
Instrument
TCO No 0933578 was made on 27 November 2009. It declares that those certain electric bicycles 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. 0933578 is taken to have come into force on 09 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the imposition of customs duties and the regulation of imports and exports. One of the key mechanisms under this Act is the Tariff Concession Order (TCO) system, which allows for the application of lower customs duty rates on certain goods under specific conditions. This system was introduced to address the need for flexibility in trade policies, enabling the government to provide tariff relief in cases where it is deemed beneficial for economic or strategic reasons. The instrument F2010L00913, specifically TCO No. 0933578, was created to provide a zero percent duty rate on certain electric bicycles, effective from the date of the application, 09 September 2009. This decision followed a determination by the Chief Executive Officer of Customs that no substitutable goods were being produced in Australia, satisfying the core criteria outlined in the Customs Act. The objective of this tariff concession is to support the importation of these goods, potentially stimulating market growth and providing consumers with more affordable options.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process of Tariff Concession Orders (TCOs) which the Chief Executive Officer of Customs (CEO) may implement to lower the rate of customs duty on certain goods. This legislation applies to individuals and entities seeking to import goods into Australia, provided these goods are not explicitly excluded by section 269SJ of the Act. A TCO can be applied for by any person in relation to goods that are not substitutable by Australian-produced goods and are not in the ordinary course of business production in Australia as defined by sections 269D and 269E of the Act. This concession is available nationally, impacting all states and territories within the Commonwealth of Australia. The Act does not specify exclusions or exemptions beyond those mentioned, and its application can be extended or restricted through subordinate instruments. For instance, the CEO may make orders to implement TCOs, which are subject to publication and consultation as required by section 269K of the Act.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0933578, under the Customs Act 1901, involve the creation of a Tariff Concession Order (TCO) for certain electric bicycles. Specifically, section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. Once the CEO is satisfied that the application meets the core criteria outlined in section 269C, a written TCO is issued. In this instance, TCO No. 0933578 was made on 27 November 2009, declaring that the specified electric bicycles are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a free rate of duty.
The obligations imposed by this legislation on the parties involved primarily revolve around the application and approval process for a TCO. The applicant must ensure that their application is valid and meets the core criteria set out in the Act, such as demonstrating that no substitutable goods are produced in Australia. The CEO, on the other hand, must assess the application and decide whether to issue a TCO. Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received.
The consequences for non-compliance with the provisions of this legislation are significant. If an entity fails to adhere to the criteria for a TCO, or if an applicant provides false information, they may be subject to penalties under the Customs Act 1901. While specific penalties are not detailed in the explanatory statement, breaches of customs laws generally result in fines or imprisonment, depending on the severity of the offence. The CEO’s decision-making process is crucial, as any improper issuance of a TCO could lead to legal repercussions.
In summary, the Tariff Concession Instrument No. 0933578 establishes a framework for granting tariff concessions to specified goods, in this case, electric bicycles. It outlines the requirements for applying for and obtaining a TCO, the obligations of both the applicant and the CEO, and the potential consequences for non-compliance with the provisions of the Customs Act 1901. The effective date of the TCO is taken to be the date on which the application was lodged, ensuring that the rights of importers are protected and that no one is disadvantaged by the issuance of the TCO.