EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816570
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 0816570 was made on 19 September 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. 0816570 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 Tariff Concession Instrument No. 0816570, enacted in 2008 under the Customs Act 1901, addresses the need for tariff concessions for specific imported goods that do not have substitutable Australian-made equivalents. The Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The CEO determines if an application for a TCO meets the core criteria, specifically if no substitutable goods are produced in Australia, which allows for a lower rate of customs duty to be applied to the goods in question. In this case, Ikea Pty Ltd applied for a TCO for certain food scoops, which were granted a free rate of duty as no substitutable goods were produced in Australia. The instrument came into force on the date the application was lodged, 8 July 2008, and does not affect any existing rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. This Act applies to entities or individuals who wish to import goods and seek tariff concessions, provided that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The application process involves the CEO evaluating whether the goods are substitutable by Australian-made products, as per sections 269C and 269D, and if no such substitutable goods are produced in Australia in the ordinary course of business. If the application meets these criteria, a TCO is issued, effectively reducing the customs duty for the specified goods, as illustrated by TCO No. 0816570 for certain food scoops, reducing their duty from 5% to free. This legislation has a national reach, applying across all states and territories within Australia. The Act also mandates the CEO to publish notices in the Gazette to invite submissions regarding TCO applications, although in the case of TCO No. 0816570, no objections were received. The TCO's application is retroactive to the date of the application, thereby benefiting importers by allowing them to claim refunds for duties paid on imports of the specified goods since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0816570 are sections 269C, 269B, 269D, 269E, 269F, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, set out in section 269C, the CEO must make a written order (a TCO) declaring that the goods are subject to a prescribed rate of duty under Schedule 4 to the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)).
The Act imposes obligations on the CEO to assess applications for TCOs and to make orders if the core criteria are met. The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as a valid application (subsection 269K(1)). The CEO is required to decide whether the application meets the core criteria, which are set out in section 269C and require that, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F of the Act respectively.
The Act does not provide for specific offences, penalties, or civil/criminal consequences for breach of its provisions in relation to TCOs. However, failure to comply with the requirements of the Act may result in the TCO being invalid or unenforceable. For example, if the CEO fails to publish a notice in the Gazette inviting submissions on the application, the TCO may be challenged in court on the grounds that the CEO did not follow the correct procedure. Similarly, if the CEO makes a TCO in respect of goods that do not meet the core criteria, the TCO may be invalid or unenforceable.
In summary, the Tariff Concession Instrument No. 0816570 provides for the making of TCOs under the Customs Act 1901. The CEO is required to assess applications for TCOs and make orders if the core criteria are met. The CEO must also publish a notice in the Gazette inviting submissions on the application. Failure to comply with the requirements of the Act may result in the TCO being invalid or unenforceable. The maximum penalty for breach of the Act is not specified, but may be subject to the general penalties applicable to breaches of Commonwealth legislation.