EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816569
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 food scoops on 08 July 2008.
Instrument
TCO No 0816569 was made on 03 October 2008. It declares that those certain food scoops 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. 0816569 is taken to have come into force on 08 July 2008.
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 Commonwealth Parliament, provides a framework for managing customs duties and facilitating trade through provisions such as Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0816569 was introduced to address the need for concessionary tariff rates on specific goods, thereby supporting economic activity by reducing the cost of importing these goods. This particular instrument, issued on 3 October 2008, responds to an application by Ikea Pty Ltd for tariff concessions on certain food scoops. The instrument was enacted without public submissions opposing it, and it became effective on the date the application was lodged, 8 July 2008. The policy objective is to ensure that the application of concessional tariffs does not disadvantage any party other than the Commonwealth and allows importers to seek refunds on duties paid before the concession took effect.
Scope and Application
The Tariff Concession Instrument No. 0816569, under the Customs Act 1901, applies to goods specified in the instrument, specifically certain food scoops, as determined by the Chief Executive Officer of Customs (CEO) following an application from Ikea Pty Ltd. This instrument is designed to grant tariff concessions on these goods, thereby reducing the customs duty rate from 5% to free. The application of this Act extends to any person or entity that imports the specified goods into Australia, thereby directly affecting the import process and the associated customs duties. The instrument's jurisdiction is federal, as it is an extension of Commonwealth legislation. Notably, the Act excludes certain goods as per section 269SJ from being subject to a Tariff Concession Order (TCO). The application process and the criteria for determining whether a TCO meets the core conditions are laid out in sections 269C and 269B of the Act, which define terms such as "substitutable goods" and "ordinary course of business". The instrument also incorporates provisions for public consultation, as mandated by section 269K(1) of the Act, although in this instance, no submissions were received. The instrument's commencement date aligns with the date the application was lodged, as specified in subsection 269S(1) of the Act.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269B, and 269P(3) of the Customs Act 1901, outline the criteria for the approval and implementation of Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are essential for understanding the eligibility of goods for a TCO. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must issue a written order declaring the goods subject to the TCO application and specifying the applicable item of Schedule 4 to the Customs Tariff Act 1995.
These sections impose specific obligations on both the CEO of Customs and the applicant for a TCO. The CEO is required to evaluate applications against the criteria set forth in section 269C, determine whether the goods are substitutable and produced in Australia, and ensure that no substitutable goods were produced domestically on the application day. Once the CEO is satisfied that the application meets the core criteria, they must promptly publish a notice in the Gazette inviting submissions from any interested parties and consider these submissions before making a decision. For the applicant, such as Ikea Pty Ltd in this case, the obligation is to provide sufficient information to demonstrate that the goods in question are eligible for a TCO.
The Act does not explicitly state offences, penalties, or civil/criminal consequences for breach of the provisions related to TCOs. However, the failure to comply with the requirements or providing false information in an application could potentially lead to legal repercussions, such as administrative penalties or legal action for misrepresentation. While specific penalties are not detailed within this legislation, the overarching legal framework of the Customs Act 1901 and related regulations may provide further guidance on potential consequences for non-compliance or breaches.