EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708946
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 utensils on 13 June 2007.
Instrument
TCO No 0708946 was made on 12 October 2007. It declares that those certain 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 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. 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. 0708946 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, established a framework for the application of customs duties on imported goods. Part XVA of the Act introduced a scheme for Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to reduce customs duty rates for specific goods. This mechanism was designed to address economic inefficiencies and trade barriers by ensuring that certain goods, for which no domestic substitute is produced, are subject to reduced customs duties. The instrument F2007L04317, specifically Tariff Concession Instrument No. 0708946, was enacted to grant tariff concessions on certain utensils applied for by Ikea Pty Ltd, effective from 13 June 2007. This concession reduces the duty on these goods from 5% to 0%, thereby encouraging imports and potentially lowering consumer prices. The process involved publishing a notice in the Gazette inviting submissions, which, in this instance, did not receive any objections, leading to the implementation of the concession on the date the application was lodged.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Order (TCO) No. 0708946 was made, applies to individuals or entities that wish to import goods into Australia and seek a reduction in the customs duty on those goods. Specifically, the Act pertains to those who apply for a TCO, which is a concession that lowers the rate of customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. This instrument applies to the goods listed in the application, in this case, certain utensils, and those who import these goods into Australia. The TCO is applicable from the date the application is lodged, making the commencement date of the order the date of the application, 13 June 2007. The geographic scope of the Act and the TCO is national, affecting all importers across Australia. However, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ of the Customs Act 1901. The application of the TCO can be further extended or restricted through subordinate instruments, such as regulations or further orders, which may specify additional conditions or clarify existing provisions.
Key Provisions
The Tariff Concession Order No. 0708946, as described in the Explanatory Statement, is a directive under the Customs Act 1901 that grants tariff concessions on certain utensils imported by Ikea Pty Ltd. Section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, which is subject to specific core criteria outlined in section 269C. According to these provisions, if the CEO determines that the application meets the core criteria—specifically, that no substitutable goods were produced in Australia at the time the application was lodged—then a TCO must be issued. This TCO, in this case, item 50 of Schedule 4 to the Customs Tariff Act 1995, reduces the duty rate from the general rate of 5% to 0% on the specified utensils.
The obligations imposed by the Customs Act 1901 on the parties involved include the CEO’s duty to evaluate the application and decide whether it meets the criteria for a TCO. The applicant, in this instance Ikea Pty Ltd, must ensure that their application is complete and that the goods in question meet the specified criteria. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, the CEO did not receive any submissions, allowing the TCO to proceed without opposition. The TCO’s effective date is the day the application was lodged, as per subsection 269S(1) of the Act.
In terms of potential breaches and penalties, the Customs Act 1901 does not specify penalties for non-compliance with the TCO provisions. However, general provisions of the Act and related legislation may apply to any misleading or deceptive conduct or breaches of other related statutory obligations. For example, providing false information in an application could potentially lead to criminal charges under the Crimes Act 1914, with penalties that may include substantial fines or imprisonment, depending on the severity of the offence. Civil penalties might also apply for breaches of the Customs Act, including fines up to the maximum prescribed by law for various contraventions.