EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817634
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 guards or barriers on 14 July 2008.
Instrument
TCO No 0817634 was made on 03 October 2008. It declares that those certain child protection safety guards 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. 0817634 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 Customs Act 1901, enacted by the Parliament of Australia, governs the administration of customs and excise duties. The Act established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This instrument provides concessions on the rates of customs duty for specified goods, facilitating easier importation of these goods under certain conditions. The Customs Tariff Concession Instrument No. 0817634, made on 3 October 2008, responds to an application by Ikea Pty Ltd for a TCO for certain child protection safety guards or barriers. The policy objective is to ensure that no substitutable goods are produced in Australia, allowing for a tariff concession to be granted, thereby reducing the duty on these specific goods to zero. The instrument became effective on the date of the application, 14 July 2008, and importers of these goods can apply for a refund of any duty paid since that date.
Scope and Application
The Tariff Concession Instrument No. 0817634, made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) is sought. The Act allows for the application of lower rates of customs duty on goods that are the subject of a TCO, provided certain criteria are met. This instrument was enacted to provide tariff concessions for certain child protection safety guards or barriers, reducing the duty rate from 5% to free, following an application by Ikea Pty Ltd. The Act applies to any person or entity that wishes to import goods that qualify for tariff concessions under the scheme. The instrument's jurisdictional reach is national, as it operates under the authority of the Commonwealth of Australia. However, it does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the TCO is subject to the core criteria outlined in sections 269C, 269D, and 269E of the Act, particularly the absence of substitutable goods being produced in Australia. The instrument came into force on the date the application was lodged, 14 July 2008, and does not affect the rights of persons in respect of anything done before this date, while beneficially affecting the rights of importers who can apply for a refund of duty.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs), which are detailed in Part XVA. Under this part, the Chief Executive Officer (CEO) of Customs can establish TCOs, which apply a lower rate of customs duty to specific goods (sections 269C, 269F). For instance, in the case of certain child protection safety guards or barriers, the general duty rate of 5% is reduced to free under TCO No. 0817634 (section 269P(3)). This order was made on 3 October 2008, following an application by Ikea Pty Ltd on 14 July 2008, after the CEO determined that no substitutable goods were produced in Australia (section 269C).
The Act imposes specific obligations on the CEO in relation to TCOs. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not proceed (subsection 269K(1)). In this case, no submissions were received. The CEO is also required to assess whether the application meets the core criteria, which includes determining whether any substitutable goods are produced in Australia on the date the application is lodged (sections 269C, 269P(3)). If the CEO is satisfied that the application meets these criteria, they must make a written TCO (subsection 269P(3)).
There are no specific offences or penalties outlined in the Act for failing to comply with the provisions related to TCOs. However, the Act does clarify that TCOs do not affect the rights of any person as at the date of registration to their disadvantage or impose any liabilities on them in respect of actions taken before the registration date (subsection 269S(1)). This ensures that the rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). Essentially, the legislation ensures that any changes in duty rates do not retroactively impose new liabilities or disadvantages on individuals or entities.