EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816576
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 lemon presses or squeezers on 08 July 2008.
Instrument
TCO No 0816576 was made on 03 October 2008. It declares that those certain lemon presses or squeezers 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. 0816576 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 Parliament of Australia, provides a framework for the regulation of imports and exports through the imposition of customs duties and other related measures. This Act aims to facilitate trade by ensuring the efficient collection of revenue and the enforcement of trade-related laws. Among its provisions, Part XVA specifically addresses Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods under specified conditions. The explanatory statement for Tariff Concession Instrument No. 0816576, issued in 2008, details the process and criteria for such concessions. It highlights that the Chief Executive Officer of Customs (CEO) is responsible for assessing applications and determining whether a TCO should be granted. The policy objective is to encourage trade by reducing the cost of imported goods, provided that no substitutable goods are produced in Australia, thereby supporting economic growth and consumer access to affordable products.
Scope and Application
The Tariff Concession Instrument No. 0816576 under the Customs Act 1901 applies specifically to the goods for which Ikea Pty Ltd sought a tariff concession order, namely certain lemon presses or squeezers. The instrument was enacted to provide relief from customs duty for these particular goods, contingent upon the absence of substitutable goods produced in Australia. The instrument is applicable to the Commonwealth jurisdiction and operates within the framework set by the Customs Act 1901, which empowers the Chief Executive Officer of Customs to make Tariff Concession Orders when specific criteria are met. The application of this instrument is limited to the goods specified in the order, and it does not extend to any other goods or entities unless similarly situated. The geographic reach of this legislation is confined to Australia, affecting only those entities involved in the importation of the specified goods. There are no exclusions or exemptions stated within the terms of this particular instrument, and the concession applies from the date the application was lodged, without retroactive effect on past transactions or liabilities.
Key Provisions
The main operative sections of the Customs Act 1901, specifically Part XVA, facilitate the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P). To qualify for a TCO, an applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged (section 269C). Once an application meets these core criteria, the CEO must issue a written order specifying the lower rate of duty applicable to the goods (section 269P). In the case of TCO No. 0816576, this order exempts certain lemon presses or squeezers from the general 5% customs duty, instead applying a rate of duty that is free (Schedule 4, item 50).
The Act imposes certain obligations on both the CEO and applicants for a TCO. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. Upon accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions from interested parties within a reasonable time frame (subsection 269K(1)). Additionally, the CEO must decide whether the application meets the core criteria for a TCO based on the absence of substitutable goods produced in Australia on the application date (section 269C). For applicants, the obligation lies in providing sufficient evidence to support their application and demonstrating compliance with the statutory criteria.
Failure to comply with the requirements of the Act or the terms of a TCO can lead to various consequences. While the Act does not specify criminal offences directly related to TCOs, breaches of the Customs Act generally can result in criminal charges. For example, making a false or misleading statement in an application can lead to prosecution and penalties under section 245 of the Act. The maximum penalty for such an offence is 12 months imprisonment or a fine of up to $11,000, or both, under section 282 of the Act. Additionally, any person found to be in breach of a TCO or its conditions may face civil penalties, including fines, as prescribed under the relevant legislation.