EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708939
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 enamelled iron or steel tableware on 13 June 2007.
Instrument
TCO No 0708939 was made on 12 October 2007. It declares that those certain enamelled iron or steel tableware 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. 0708939 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, provides a framework for the regulation of customs and excise duties. Specifically, Part XVA of this Act introduces a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on certain goods. The 2007 Explanatory Statement (F2007L04191) outlines the process for these concessions, which are intended to benefit importers by reducing the duty on specified goods, provided no substitutable goods are produced in Australia. This process aims to ensure that the concessions are only granted when necessary and do not disadvantage existing domestic industries. Instrument TCO No. 0708939, which came into effect on 13 June 2007, exemplifies this mechanism by granting a tariff concession on certain enamelled iron or steel tableware, resulting in a duty-free rate for these goods. The instrument was made after the CEO of Customs determined that the application met the core criteria, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) which allow for reduced rates of customs duty on specified goods. These orders are administered by the Chief Executive Officer of Customs and apply to goods for which an application has been successfully processed, provided the goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The process hinges on the core criteria stipulated in section 269C of the Act, which mandates that a TCO can only be granted if no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. This Act applies to entities or individuals seeking to import goods eligible for tariff concessions, and the scope extends nationally across Australia as it is a Commonwealth Act. Subordinate instruments, such as the Customs Tariff Act 1995, further define the specifics of duty rates and eligible goods. The TCO process ensures that no existing rights or liabilities of non-Commonwealth persons are adversely affected by the concessions, and the commencement date of a TCO is aligned with the date of application lodging, ensuring a seamless transition for importers who can apply for duty refunds on eligible goods.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0708939 under the Customs Act 1901 relate to the application and implementation of Tariff Concession Orders (TCOs). Under section 269F (2), an application for a TCO may be made by any person in respect of goods. The Chief Executive Officer of Customs (CEO) must then decide whether the application meets the core criteria set out in section 269C. This involves assessing whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a TCO, as per section 269P(3).
The obligations imposed on parties under this legislation include the requirement for the CEO to publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid, as per section 269K(1). For the specific TCO No. 0708939, the CEO published such a notice but did not receive any submissions. Additionally, the CEO must ensure that the TCO does not affect the rights of any person, except the Commonwealth, as per section 269S(1), which means no one can be disadvantaged or incur liabilities for actions taken before the TCO's effective date.
In terms of penalties and consequences, the Act does not specify particular offences or penalties for breaches related to TCOs. However, the consequences of non-compliance with the provisions of the Customs Act 1901 can be severe, including fines and imprisonment, depending on the nature and severity of the breach. For example, under section 274 of the Customs Act, penalties for fraud or knowingly making a false statement can result in fines up to 10,000 penalty units or imprisonment for up to 10 years, or both. The Tariff Concession Instrument itself does not detail specific penalties for breaches but relies on the broader framework of the Customs Act to enforce compliance.