EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708937
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 kitchenware on 13 June 2007.
Instrument
TCO No 0708937 was made on 9 November 2007. It declares that those certain kitchenware 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 0%.
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. One submission objecting to the TCO application was received from Bessemer Pty Ltd.
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. 0708937 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders can reduce or eliminate customs duties on specific imported goods, provided they meet certain criteria. The problem this legislation addresses is the need to offer tariff concessions on imported goods that are not produced domestically, thereby promoting trade and economic efficiency. The policy objective is to facilitate the import of goods that are not produced in Australia by providing a streamlined process for concession applications. This can be seen in the requirement for the Chief Executive Officer of Customs to assess whether an application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The instrument in question, Tariff Concession Instrument No. 0708937, was made to allow for zero duty on certain kitchenware imported by Ikea Pty Ltd, effective from the date of their application, 13 June 2007.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a scheme through which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, granting them a lower rate of customs duty as outlined in the Customs Tariff Act 1995. An application for a TCO can be lodged by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application satisfies these criteria, the CEO is required to make a written order declaring the goods to which a prescribed item of Schedule 4 to the Tariff applies. The instrument extends to the Commonwealth and applies to all entities or individuals involved in the import of the specified goods, ensuring that the rights of importers are beneficially affected by the concession. The TCO does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration concerning actions taken prior to the registration date.
Key Provisions
The main operative sections of this legislation revolve around the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, 269K, and 269S). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods, provided these goods are not specified in section 269SJ. If the CEO determines that the application meets the core criteria (section 269C), they must issue a written order (section 269P). This order effectively reduces the customs duty on the specified goods to zero, provided no substitutable goods are produced in Australia (section 269D). The commencement of a TCO is governed by section 269S, which states that a TCO is effective from the date the application is lodged.
The Act imposes several obligations on parties involved. Firstly, applicants for a TCO must ensure that their application is valid and meets the core criteria, particularly that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO is required to make a decision based on these criteria and must publish a notice in the Gazette inviting submissions from interested parties (section 269K). The CEO must also consider any submissions received and decide whether to proceed with the TCO. For instance, in the case of TCO No. 0708937, the CEO must have determined that no objections warranted refusal of the application. Moreover, importers who benefit from the TCO can apply for a refund of any duties paid on the goods since the effective date of the TCO, as per regulation 126(1)(r).
Non-compliance with the provisions of the Customs Act 1901 or misuse of a TCO may lead to legal consequences. While the specific offences and penalties are not detailed in the explanatory statement, under Australian law, breaches of customs regulations typically result in fines and potential imprisonment. The exact penalties depend on the severity of the breach, the intent behind it, and whether it is a civil or criminal matter. For instance, knowingly making false statements in a customs declaration could lead to substantial fines and imprisonment, as outlined in the Crimes Act 1914. The Act ensures that TCOs do not disadvantage any person or impose new liabilities on them, protecting the rights of all parties involved.
In summary, the Tariff Concession Instrument No. 0708937 under the Customs Act 1901 provides a mechanism for reducing customs duties on certain goods through Tariff Concession Orders. It outlines the application process, the CEO's role in approving these orders, and the obligations of both applicants and the CEO. While the explanatory statement does not detail specific penalties for breaches, Australian law provides a framework for dealing with non-compliance through fines and imprisonment. Importantly, the TCO does not impose new liabilities or disadvantage any person, safeguarding their rights.