EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708935
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.
Ikea Pty Ltd applied for a TCO in respect of certain aluminium household utensils on 13 June 2007.
Instrument
TCO No 0708935 was made on 12 October 2007. It declares that those certain aluminium household utensils 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. 0708935 is taken to have come into force on 13 June 2007.
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 was enacted by the Parliament of Australia and aims to regulate the import and export of goods in Australia, including the imposition of customs duties. This legislation was amended to include Part XVA, which established a scheme allowing for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders can reduce the rate of customs duty on specified goods when certain criteria are met. The explanatory statement for Tariff Concession Instrument No. 0708935, made under this Act, illustrates the process for applying for and granting a TCO. Specifically, it details the application by Ikea Pty Ltd for a TCO concerning certain aluminium household utensils, which was granted by the CEO of Customs as no substitutable goods were produced in Australia. This instrument exemplifies the application of the Act's provisions, ensuring that the policy objective of providing tariff concessions to support specific industries is achieved.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking to import goods into Australia, with the primary aim of granting lower customs duty rates on specified goods if certain criteria are met. The legislation ensures that the application for a TCO is assessed against the core criteria, particularly focusing on whether substitutable goods are produced in Australia in the ordinary course of business. If no such goods are found, the CEO is mandated to issue a TCO, as seen in the case of Ikea Pty Ltd’s application for certain aluminium household utensils, resulting in TCO No. 0708935. This order came into force on 13 June 2007, the date the application was lodged, and provides for a duty-free rate on these specific goods, altering the general rate of 5% applicable to them. The application of the Act extends across Australia, governed by the Commonwealth, and it does not disadvantage any existing rights of persons or impose new liabilities, ensuring a smooth transition for importers who can benefit from the duty concessions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0708935, under the Customs Act 1901, revolve around the application and approval of Tariff Concession Orders (TCOs) for certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods are not those specified in section 269SJ, which are ineligible for a TCO. The CEO is mandated to assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) as specified in section 269P(3).
The Act imposes several obligations on the parties involved. For the applicant, it is essential to ensure that the application for a TCO is lodged when no substitutable goods are being produced in Australia. The CEO, on the other hand, is obligated to review the application, determine if it meets the core criteria, and if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO, as per section 269K(1).
In terms of consequences for breach, the Act does not explicitly outline offences or penalties for failing to comply with the requirements of a TCO. However, any non-compliance with the core criteria for a TCO could potentially lead to the invalidation of the TCO and the reapplication of the standard customs duty. Moreover, any misuse or fraudulent application for a TCO could result in legal action under the broader provisions of the Customs Act 1901, which may include penalties for offences such as fraud or providing false information. The specific penalties for such offences would be determined in the context of the broader legal framework governing customs duties and regulations.