EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943745
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.
Kamp Rite Pty Ltd applied for a TCO in respect of certain bicycle trailers on 19 November 2009.
Instrument
TCO No 0943745 was made on 29 January 2010. It declares that those certain bicycle trailers 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. 0943745 is taken to have come into force on 19 November 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. 0943745 was enacted in 2010 as a response to a specific application made under the Customs Act 1901. Kamp Rite Pty Ltd sought a Tariff Concession Order (TCO) for certain bicycle trailers, prompting the Chief Executive Officer of Customs to review the application against the core criteria outlined in the Act. This process was intended to ensure that the concession would be granted only if no substitutable goods were being produced in Australia, thereby preventing unfair trade practices and ensuring that Australian businesses are not unduly disadvantaged. The Instrument was made to facilitate the concession of a lower customs duty rate for these goods, aligning with the policy objective of supporting industry and commerce by reducing the cost burden on businesses importing these specific items.
The instrument was created by the Parliament of Australia through the Customs Act 1901, which provides a framework for granting tariff concessions. The instrument's commencement date was set as the date of the application, 19 November 2009, ensuring that the rights of importers were protected and any duties paid prior to the concession could be refunded. This legislative action underscores the commitment to a fair and efficient customs regime, enabling smoother trade operations and fostering economic growth by reducing unnecessary tariffs on specific imported goods.
Scope and Application
The Tariff Concession Instrument No. 0943745 under the Customs Act 1901 applies to Kamp Rite Pty Ltd’s application for a Tariff Concession Order (TCO) concerning certain bicycle trailers. The application was made on 19 November 2009 and, following satisfaction by the Chief Executive Officer of Customs (CEO) that the application met the core criteria, the TCO was issued on 29 January 2010. The TCO applies a free rate of customs duty to the specified bicycle trailers, which otherwise attract a 5% duty under the Customs Tariff Act 1995. The TCO is effective from the date of the application and does not disadvantage any person or impose liabilities for actions taken before the registration date. Importers of these goods can apply for a refund of duty on imports since the effective date. The TCO does not apply to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0943745 (the Instrument) under the Customs Act 1901 (the Act) include sections 269C, 269B, and 269P. Section 269C (1) sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be made by the Chief Executive Officer of Customs (the CEO). Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P (3) requires the CEO to make a written order if satisfied that the application meets the core criteria.
The Instrument imposes obligations on the CEO to assess TCO applications according to the criteria outlined in the Act. Specifically, the CEO must determine if the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia on the day the application was lodged. Upon determining that the application meets the criteria, the CEO is required to publish a notice in the Gazette and make a written TCO order specifying the reduced rate of duty for the goods in question. Kamp Rite Pty Ltd, the applicant in this case, must ensure their application is valid and meets the criteria specified in the Act.
Failure to comply with the provisions of the Customs Act 1901 could result in legal consequences for the parties involved. For instance, if the CEO fails to adhere to the requirements for making a TCO, this could be subject to judicial review or other legal remedies. Conversely, if a party contravenes the terms of the TCO, they could face penalties under the Customs Act, which may include fines or other civil or criminal penalties as prescribed by the Act. The maximum penalties are not specified in the explanatory statement but would generally be in line with those outlined in the relevant sections of the Act.
The Instrument also specifies the commencement date of the TCO, which is taken to be the date on which the application for the TCO was lodged, in this case, 19 November 2009. This date is critical as it determines the effective date from which the reduced duty rate applies to the specified goods. Importantly, the TCO does not affect any existing rights or liabilities of persons other than the Commonwealth prior to the registration date, ensuring that no existing legal obligations or entitlements are adversely impacted by the new concession.