EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817640
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 iron or steel sanitary ware on 14 July 2008.
Instrument
TCO No 0817640 was made on 10 October 2008. It declares that those certain iron or steel sanitary ware 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. 0817640 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. 0817640 was enacted in 2008 to amend the Customs Act 1901 by providing tariff concessions on certain iron or steel sanitary ware. This instrument was introduced to address the need for a lower rate of customs duty on goods that meet specific criteria, thereby facilitating trade and potentially lowering costs for businesses and consumers. The instrument was created under the authority of the Customs Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain conditions are met. The policy objective of this instrument is to support economic activity by reducing the customs duty on specific goods, in this case, iron or steel sanitary ware, provided that no substitutable goods are produced in Australia. The instrument came into effect on the date the application was lodged, 14 July 2008, and does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking a lower rate of customs duty for goods not produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it is administered under the Commonwealth. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO, and requires that the application meets core criteria, notably that no substitutable goods were produced in Australia on the date of application. The instrument, Tariff Concession Instrument No. 0817640, was made on 10 October 2008, and declared certain iron or steel sanitary ware eligible for a tariff concession, setting the duty rate at free as opposed to the general rate of 5%. This instrument does not affect any pre-existing rights or impose liabilities on any person, and importers may apply for a refund of duty on goods imported since the TCO came into force on 14 July 2008.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0817640, made under the Customs Act 1901, pertain to the establishment and conditions for a Tariff Concession Order (TCO). Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO regarding certain goods. Section 269C stipulates that a TCO application meets the core criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P(3) of the Act, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For instance, in this case, the TCO applies to certain iron or steel sanitary ware, with the general duty rate reduced from 5% to free under item 50 of the Tariff.
The Act imposes several obligations and requirements on the parties involved. Under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made. If no submissions are received, the CEO can proceed to make the TCO. Additionally, section 269S(1) stipulates that a TCO is considered to come into force on the day the application is lodged, which, in this case, is 14 July 2008. This date also marks the effective commencement of the TCO, without affecting any pre-existing rights of persons other than the Commonwealth. Importers can apply for a refund of duty on goods imported from this date under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements and obligations outlined in the Customs Act 1901 may result in civil or criminal consequences. While the specific penalties are not detailed in the Explanatory Statement, breaches of customs regulations generally attract penalties under the Crimes Act 1914 and the Customs Act 1901. Civil penalties can include fines up to a substantial amount, and criminal penalties can include imprisonment, depending on the severity of the breach. The exact penalties would depend on the specific nature of the non-compliance, but they are intended to enforce adherence to the terms of the TCO and the Act.