EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816591
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 cutting or chopping boards on 08 July 2008.
Instrument
TCO No 0816591 was made on 26 September 2008. It declares that those certain cutting or chopping boards 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. 0816591 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 was enacted by the Parliament of Australia to regulate and facilitate the customs process, ensuring efficient management of imported goods and collection of duties. One specific provision within the Act, introduced to address the issue of tariff concessions, is the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to allow for the reduction of customs duties on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative measure aims to support industry by reducing costs and promoting competitiveness without imposing liabilities on individuals or entities. The explanatory statement for Tariff Concession Instrument No. 0816591, enacted in 2008, exemplifies this process by granting a tariff concession to Ikea Pty Ltd for certain cutting or chopping boards, reducing the duty rate from 5% to free. This decision was made following a review which confirmed that no substitutable goods were produced in Australia, and no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0816591 applies to the specific goods, namely certain cutting or chopping boards, which were the subject of a Tariff Concession Order (TCO) application made by Ikea Pty Ltd on 08 July 2008. This legislation is part of the broader Customs Act 1901, which governs the administration of customs duties and tariffs in Australia. The instrument provides for the concession of customs duty on these goods, reducing the applicable duty rate from the general rate of 5% to free. The application of this Act is confined to the particular goods specified in the TCO and does not extend to other goods or industries unless explicitly covered by other TCOs. Geographically, the Act operates within the Commonwealth jurisdiction, thus applying Australia-wide. The Act does not explicitly state exclusions or exemptions beyond the goods specified in section 269SJ of the Customs Act 1901, which details goods that cannot be subject to a TCO. Additionally, the scope of the Act can be extended or restricted through subordinate instruments, such as regulations or further TCOs, which may specify additional details or conditions for the application of tariff concessions.
Key Provisions
Section 269F of the Customs Act 1901 allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. The application process requires the applicant to demonstrate that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a TCO, which specifies that a lower rate of customs duty applies to the goods in question.
The core criteria under section 269C necessitate that, on the date the application is lodged, there are no substitutable goods produced in Australia in the ordinary course of business. Definitions of these terms are provided in sections 269D, 269E, and 269F of the Act. If the CEO is satisfied that these criteria are met, they must make a written TCO, as mandated by subsection 269P(3). This process ensures that the concession applies only when appropriate and that it does not unfairly disadvantage Australian producers.
Upon receiving a valid TCO application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit any objections or reasons why the TCO should not be granted, as per subsection 269K(1). This consultation process is crucial for transparency and stakeholder engagement. In the case of TCO No. 0816591, no submissions were received by the CEO, indicating that there were no objections to the concession.
The TCO No. 0816591, issued on 26 September 2008, applies to certain cutting or chopping boards. The general duty rate on these goods is 5%, but under the TCO, the duty rate is reduced to free. This concession became effective on the date the application was lodged, 8 July 2008, as per subsection 269S(1) of the Act. Importantly, this TCO does not retroactively affect the rights of any person, except the Commonwealth, or impose any new liabilities on any person.
Under the Customs Act 1901, breaching the terms of a TCO or engaging in fraudulent activities to benefit from a TCO could lead to significant legal consequences. While the specific penalties for such breaches are not detailed in the explanatory statement, penalties for customs-related offences generally include fines and imprisonment. For instance, knowingly making a false statement in a customs document could result in a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both, depending on the severity of the offence. Civil penalties may also apply, including the possibility of compensating any parties adversely affected by the breach.