EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012997
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.
JCDecaux Australia Pty Ltd applied for a TCO in respect of certain bicycle post locks on 15 March 2010.
Instrument
TCO No 1012997 was made on 04 June 2010. It declares that those certain bicycle post locks 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. 1012997 is taken to have come into force on 15 March 2010.
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, provides a framework for the imposition of customs duty on goods entering Australia. Specifically, Part XVA of the Act outlines the process for making Tariff Concession Orders (TCOs) that can reduce the duty on certain goods, under certain conditions. This scheme was introduced to address gaps in ensuring fair trade practices by allowing reduced customs duties where appropriate, thereby supporting economic efficiency and competitiveness. The Tariff Concession Instrument No. 1012997, issued under this Act, was made to address a specific application by JCDecaux Australia Pty Ltd for a TCO on certain bicycle post locks. The instrument declares that these locks are subject to a zero percent duty rate as no substitutable goods are produced in Australia, meeting the core criteria set out in the Act. The instrument came into effect on the date the application was lodged, 15 March 2010, and no submissions opposing the concession were received, ensuring the process was both timely and transparent.
Scope and Application
The Customs Act 1901, as amended, allows for the implementation of Tariff Concession Orders (TCOs) through the Tariff Concession Instrument, such as No. 1012997, which pertains to certain bicycle post locks. This legislation applies to entities or individuals who seek to import goods that can benefit from a tariff concession. The scope of this Act is targeted at facilitating imports by reducing or eliminating customs duty on specific goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act is national in reach, operating under the authority of the Commonwealth and overseen by the Chief Executive Officer of Customs. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any pre-existing rights of individuals or entities. The process involves an application to the CEO for a TCO, followed by a public notice period for any objections, which in this instance did not receive any submissions. The TCO comes into effect on the date of the application, with the rights of importers being beneficially affected, including the possibility of duty refunds for goods imported since the effective date of the TCO. The Act may extend its application through subordinate instruments, although specific details on such extensions are not provided in the explanatory statement.
Key Provisions
The Customs Act 1901, as amended, includes a mechanism for providing tariff concessions on certain goods, enabling a lower rate of customs duty for those goods. Under section 269F, any person may apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must consider the application against the core criteria outlined in section 269C. Specifically, the CEO must be satisfied that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D as those produced in Australia that are put, or are capable of being put, to a use that corresponds to the goods in question.
The obligations imposed by the Act on the CEO include the assessment of TCO applications against the core criteria and the publication of a notice in the Gazette inviting submissions if the application is accepted as valid, as per section 269K. If the CEO is satisfied that the application meets the core criteria, they are mandated to make a written TCO, as specified in section 269P(3). In the case of TCO No. 1012997, the CEO was satisfied that no substitutable goods were produced in Australia for certain bicycle post locks, resulting in the declaration that these goods are subject to a 5% duty rate.
The Act does not explicitly outline offences or penalties for non-compliance with the TCO provisions. However, the legislative framework ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO. Importers of goods subject to a TCO may apply for a refund of duty under paragraph 126(1)(r) of the Regulations, providing a beneficial outcome for those importing such goods. Additionally, the TCO does not impose any liabilities on any person, safeguarding against any disadvantage or new liabilities arising from the concession.