EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817657
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 base metal bottle stoppers on 14 July 2008.
Instrument
TCO No 0817657 was made on 03 October 2008. It declares that those certain base metal bottle stoppers 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. 0817657 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. 0817657 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. The Customs Act 1901, administered by the Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which lower the customs duty on certain goods. This instrument was introduced to provide tariff relief to importers by granting a concession on base metal bottle stoppers, reducing their duty rate to free, provided that no substitutable goods were produced in Australia at the time of the application. This legislative measure ensures that importers can benefit from reduced duty rates on specified goods, thereby potentially lowering their costs and increasing their competitiveness. The policy objective is to facilitate trade by making imported goods more affordable, thus supporting economic activity and consumer access to a broader range of products.
Scope and Application
The Customs Act 1901 applies to the process of applying for and granting Tariff Concession Orders (TCOs), which pertain to the imposition of customs duty on specific goods. These orders are applicable to goods that do not have substitutable equivalents produced in Australia and are subject to the criteria outlined in section 269C of the Act. The Chief Executive Officer of Customs is responsible for determining whether an application for a TCO meets these criteria and for making the order if it does. The Act applies to all persons who wish to apply for a TCO, and the process is available on a national level across Australia. There are specific exclusions, notably those goods listed in section 269SJ of the Act which are ineligible for TCOs. The instrument, TCO No. 0817657, specifies that the base metal bottle stoppers in question are subject to a zero rate of duty instead of the general rate of 5%. This order came into effect on the date of the application, 14 July 2008, and the rights of importers are positively affected, allowing them to seek refunds of duty paid on imports since this date.
Key Provisions
The key provisions of the Tariff Concession Order No. 0817657, under the Customs Act 1901, are found in sections 269C, 269F, 269P, and 269SJ (among others). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria and that the goods are not specified in section 269SJ, a TCO will be made (section 269P). The core criteria for a TCO include ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This TCO, specifically TCO No. 0817657, declares that certain base metal bottle stoppers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty for these goods being free, as opposed to the general rate of 5%.
The Customs Act 1901 imposes certain obligations on the CEO of Customs, including the requirement to consider applications for a TCO and to determine whether they meet the core criteria. The CEO must also publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must proceed with making the TCO. The Act ensures that 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.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly state any offences, penalties, or civil/criminal consequences for breach of a TCO. However, general provisions within the Act and related legislation may apply, such as penalties for providing false or misleading information in an application for a TCO or for contravening the terms of the TCO itself. The maximum penalties for such offences can vary widely depending on the severity and intent of the breach, and can include substantial fines and/or imprisonment. Importers of the goods subject to the TCO may be eligible for a refund of duty paid on goods imported since the day the TCO is taken to have come into force.