EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708944
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 household utensils on 13 June 2007.
Instrument
TCO No 0708944 was made on 12 October 2007. It declares that those certain enamelled iron or steel 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. 0708944 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 Tariff Concession Instrument No. 0708944, made under the Customs Act 1901, was enacted in 2007 to address the need for tariff concessions on certain imported goods, in this case, enamelled iron or steel household utensils. This instrument was introduced to facilitate the importation of these specific goods by providing a tariff concession that lowers the duty rate from the general 5% to free. The Act, enacted by the Australian Parliament, aims to provide flexibility in customs duty rates where necessary to support trade and economic activities. The policy objective of this specific instrument is to ensure that the importation of certain goods is not hindered by prohibitive tariffs, thereby promoting the availability and affordability of these goods in the Australian market. The instrument came into force on the date the application was lodged, 13 June 2007, and does not affect the rights of any person as at the date of registration.
Scope and Application
The Tariff Concession Instrument No. 0708944 applies to the customs duty on certain enamelled iron or steel household utensils, facilitating a reduction in the duty rate for these goods from the general rate of 5% to free. The Customs Act 1901, under which this instrument operates, applies nationally across Australia, and the instrument itself is a Commonwealth instrument. The Act applies to individuals and entities importing these goods, allowing them to benefit from the reduced tariff rate if they meet the specified criteria. The Act excludes certain goods from being subject to a Tariff Concession Order as outlined in section 269SJ. This instrument extends the application of the Customs Act 1901 by providing a mechanism for the Chief Executive Officer of Customs to reduce the duty on specific imported goods, contingent on meeting the core criteria of section 269C. The CEO's decision is based on the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act.
Key Provisions
The Customs Act 1901 contains provisions that allow for Tariff Concession Orders (TCOs) to be made, which provide for lower rates of customs duty on certain goods (s 269F). A TCO application can be made by any person, and if the application is not for goods specified in section 269SJ, which are ineligible for TCOs, the Chief Executive Officer of Customs (CEO) will consider whether it meets the core criteria (s 269C). The CEO must make a written order if satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269P(3)). For the specific case of TCO No. 0708944, this instrument declares that certain enamelled iron or steel household utensils are subject to a TCO, meaning they attract a duty rate of free, as opposed to the general rate of 5% (s 269P(3)).
The obligations imposed by the Customs Act on parties and entities include the requirement for the CEO to publish a notice in the Gazette when a TCO application is accepted as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. Furthermore, the Act requires that TCOs come into force on the day the application for the TCO was lodged, ensuring that the rights of importers are beneficially affected and that the TCO does not disadvantage any person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration (s 269S(1)).
In terms of consequences for breach, the Customs Act does not explicitly state offences, penalties, or specific civil or criminal consequences for non-compliance with the provisions regarding TCOs. However, the Act provides a framework for the CEO to make TCOs based on the core criteria, ensuring that the process is transparent and subject to scrutiny through the publication of notices and invitations for submissions. Failure to comply with the procedural requirements, such as not publishing a notice in the Gazette or ignoring valid submissions, could potentially lead to legal challenges regarding the validity of the TCO. Nonetheless, the primary focus of the Act in this context is on establishing a fair and transparent process for determining tariff concessions, rather than on punitive measures for non-compliance.