EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1037727
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.
Funtastic Limited applied for a TCO in respect of certain scooters on 16 August 2010.
Instrument
TCO No 1037727 was made on 08 November 2010. It declares that those certain scooters 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. 1037727 is taken to have come into force on 16 August 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 Parliament of Australia, provides a framework for the imposition of customs duties and the granting of tariff concessions. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs), which can reduce or eliminate customs duties on certain imported goods under specific conditions. The instrument F2010L03215, known as Tariff Concession Instrument No. 1037727, was introduced to provide a tariff concession for certain scooters imported by Funtastic Limited. The instrument was enacted to address the problem of ensuring that importers are not unfairly disadvantaged by customs duties when there are no domestic alternatives to the imported goods in question. The instrument declares that the scooters in question are subject to a duty-free rate, as no substitutable goods were produced in Australia on the date the application was lodged. The policy objective here is to support importers by reducing the cost of imported goods, thereby potentially lowering the cost of goods for consumers.
Scope and Application
The Tariff Concession Order No. 1037727 under the Customs Act 1901 applies to specific scooters that are the subject of an application by Funtastic Limited, effective from the date the application was lodged, 16 August 2010. This order is made by the Chief Executive Officer of Customs, who determines that these scooters are eligible for a tariff concession based on the criteria outlined in the Act, specifically by ensuring no substitutable goods are produced in Australia. The order modifies the duty applicable to these scooters, reducing it from the general rate of 5% to free, thereby providing a concession on customs duty for the specified goods. This concession is applicable nationally, extending to the entire Commonwealth of Australia.
The scope of the Act includes all individuals or entities involved in the importation of the specified scooters, affecting their customs duty obligations. However, the Act explicitly excludes certain goods from tariff concessions, as detailed in section 269SJ of the Customs Act 1901. The order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the order's effective date. Furthermore, the Act allows for the extension or restriction of application through subordinate instruments, although this particular order does not mention any such extensions.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which are designed to lower the customs duty on specific goods. When an individual or entity applies for a TCO (section 269F), the Chief Executive Officer of Customs (CEO) must first ensure that the goods in question are not listed in section 269SJ, which details goods that are ineligible for a TCO. If the CEO determines that the application meets the core criteria, they must make a TCO (section 269C). This core criterion requires that, on the date the application was made, no substitutable goods were being produced in Australia as part of ordinary business operations (section 269C). The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269P(3) of the Act respectively.
The obligations imposed by the Act on the CEO include evaluating the TCO application against the core criteria, consulting with the public if necessary (subsection 269K(1)), and making a TCO if the criteria are satisfied. Funtastic Limited's application for a TCO for certain scooters resulted in TCO No. 1037727, which was issued on 08 November 2010. This TCO declares that the specified scooters are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby applying a duty rate of free instead of the general rate of 5%. The TCO came into effect on the date the application was lodged, 16 August 2010 (subsection 269S(1)). Importantly, the TCO does not affect any pre-existing rights or impose liabilities on anyone other than the Commonwealth.
In terms of legal consequences, the Act does not specify any particular offences or penalties for breaches related to the TCO process. However, the general principles of administrative law apply, and any procedural irregularities or unlawful actions by the CEO could potentially be subject to judicial review. For the purposes of this legislation, the primary focus is on ensuring that the TCO process is transparent, fair, and conducted in accordance with the statutory requirements. Failure to adhere to these requirements could lead to the TCO being contested or overturned in a court of law, though specific penalties are not outlined in the text.