EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816608
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 rubber ice cube makers on 08 July 2008.
Instrument
TCO No 0816608 was made on 26 September 2008. It declares that those certain rubber ice cube makers 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. 0816608 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 Australian Parliament to facilitate the regulation of imports and exports, including the collection of customs duties and the implementation of tariff concessions. One particular issue that this Act addresses is the need for a streamlined process to reduce customs duties on certain imported goods, which is facilitated through the mechanism of Tariff Concession Orders (TCOs). This legislative framework enables the Chief Executive Officer of Customs to grant tariff concessions, provided that certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument F2008L04091, specifically TCO No. 0816608, exemplifies this process by granting a tariff concession on certain rubber ice cube makers, effectively setting their duty rate to zero. The policy objective behind this concession is to support the importation of these goods without imposing additional burdens on importers, thereby facilitating trade and potentially lowering consumer prices.
Scope and Application
The Tariff Concession Instrument No. 0816608 applies to the concession of customs duty on certain rubber ice cube makers imported into Australia under the Customs Act 1901. Specifically, the instrument applies to Ikea Pty Ltd, which sought and was granted the tariff concession. The instrument grants a tariff concession to these goods by reducing the duty rate from the general rate of 5% to free, provided that no substitutable goods were produced in Australia at the time of the application. The geographic reach of the Act is national, with the application affecting imports across all states and territories in Australia. The Act does not specify any exclusions, exemptions, or thresholds other than those outlined in the core criteria, which must be satisfied for the tariff concession to be granted. The Act may be further extended or restricted by subordinate instruments, but this particular instrument does not elaborate on such provisions. The instrument came into effect on the date the application was lodged, 08 July 2008, and it does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation are sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K 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 application is not in respect of goods specified in section 269SJ, the CEO must determine whether it meets the core criteria as outlined in sections 269C and 269B. If the CEO is satisfied that the application meets the core criteria, they must make a TCO, as stipulated in section 269P. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Act imposes several obligations on the parties it governs. Firstly, the CEO must decide whether a TCO application meets the core criteria outlined in sections 269C and 269B. This includes verifying that no substitutable goods are produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any interested parties. The CEO must consider any submissions received and make a TCO if the application meets the core criteria. Importers are also required to apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
Any breach of the obligations or requirements set out in the Act may result in civil or criminal consequences. The Act does not specify maximum penalties for breaches, but general provisions in the Customs Act 1901 and related legislation may apply. For instance, failure to comply with an order made under the Act could result in fines or imprisonment. Similarly, providing false or misleading information in an application for a TCO could also lead to penalties. It is important to note that the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration in a way that disadvantages that person.
Section 269P of the Act mandates that if the CEO is satisfied that a TCO application meets the core criteria, they must make a written order 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 applies. This provision ensures that the CEO has the authority to grant tariff concessions for specific goods if certain conditions are met. The explanatory statement further clarifies that the TCO does not affect the rights of a person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. This protects the interests of individuals and entities that have already engaged in transactions related to the goods before the TCO is made.