EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817633
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 child protection safety gates or barriers on 14 July 2008.
Instrument
TCO No 0817633 was made on 26 September 2008. It declares that those certain child protection safety gates or barriers 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. 0817633 is taken to have come into force on 14 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. 0817633 was enacted in 2008 under the Customs Act 1901, to provide a lower rate of customs duty on specific goods, in this case certain child protection safety gates or barriers, as a result of an application made by Ikea Pty Ltd. The instrument was introduced to address the problem of high customs duty on imported goods, ensuring that such goods are available at a more reasonable cost for consumers. The instrument was created by the Chief Executive Officer of Customs, who determined that the application met the core criteria set out in the Customs Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business. The instrument came into effect on the same day as the application was lodged, on 14 July 2008, and does not impose any liabilities on any person, while providing benefits to importers.
Scope and Application
The Tariff Concession Instrument No. 0817633 under the Customs Act 1901 applies to Ikea Pty Ltd's application for a Tariff Concession Order (TCO) in relation to certain child protection safety gates or barriers. This instrument was enacted to provide a concession on the customs duty for these specific goods, which now attract a rate of zero percent instead of the general rate of 5%. The legislation targets particular goods and applies nationally, governed by the Commonwealth, with its provisions extending to the entire nation. The Act does not specify any exclusions or exemptions apart from those stipulated in section 269SJ, which lists goods ineligible for TCOs. The application process involves an assessment by the Chief Executive Officer of Customs to ensure that no substitutable goods are produced in Australia, thereby meeting the core criteria outlined in the Act. Any subordinate instruments that further define or extend the application of the TCO would be created under the authority of the Customs Act 1901, ensuring consistency and compliance with national customs regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0817633 under the Customs Act 1901 (section 269C) require that a Tariff Concession Order (TCO) application must meet core criteria. Specifically, section 269C states that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. For the purposes of this legislation, "substitutable goods" are defined in section 269D as goods produced in Australia that could be used in the same way as the goods the TCO application pertains to. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a written order declaring the goods subject to the TCO (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any person to submit objections if they believe the TCO should not be made, as required by section 269K(1).
The obligations imposed by this Act on the parties involved are primarily on the CEO. The CEO must assess whether a TCO application meets the core criteria (section 269C), publish a notice in the Gazette (section 269K(1)), and make a written order if the criteria are satisfied (section 269P(3)). Additionally, the CEO is responsible for ensuring that the TCO does not disadvantage any person or impose liabilities on anyone regarding actions taken before the TCO was registered (subsection 269S(1)). Importers are also affected, as they can apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The Act outlines consequences for non-compliance or breaches. Although the specific penalties for breaches are not detailed in the explanatory statement, breaches of the Customs Act 1901 can generally lead to civil or criminal penalties. Civil penalties can include fines up to $22,200 per offence, while criminal penalties can include imprisonment, fines, or both, depending on the severity of the breach. The exact penalties depend on the nature and extent of the violation and are subject to the provisions of the Customs Act 1901 and related regulations.