EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818803
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 furniture locks and lock components on 15 July 2008.
Instrument
TCO No 0818803 was made on 26 September 2008. It declares that those certain furniture locks and lock components 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. 0818803 is taken to have come into force on 15 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. 0818803, enacted in 2008, is an instrument made under the Customs Act 1901. This Act provides for the establishment of a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The primary purpose of this instrument is to address the issue of applying lower rates of customs duty to certain goods, specifically those for which a TCO has been approved. The instrument was introduced to facilitate tariff concessions for specific goods by establishing a streamlined process for applications and approvals by the CEO. The Tariff Concession Instrument No. 0818803 was enacted by the Parliament of Australia to provide relief to businesses by reducing the duty on certain imports, thus promoting trade and economic efficiency.
The explanatory statement details that the instrument was made in response to an application by Ikea Pty Ltd for a TCO concerning certain furniture locks and lock components. The CEO of Customs approved the application on 26 September 2008, declaring that the specified goods would be subject to a zero rate of duty, effective from the date the application was lodged, 15 July 2008. This decision was made based on the criteria outlined in the Customs Act 1901, specifically that no substitutable goods were produced in Australia at the time of application. The instrument ensures that the rights of importers are positively impacted, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0818803 applies to Ikea Pty Ltd and specifically to certain furniture locks and lock components that the company sought a tariff concession on. This instrument operates under the Customs Act 1901, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty for certain goods. The application of this legislation is focused on the goods in question and the entity that applied for the tariff concession. It has a national reach, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The TCO does not disadvantage any person or impose liabilities on anyone in relation to actions taken before the order's registration date, but it does beneficially affect the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The Act provides for the extension of its application through subordinate instruments, which can further specify the details and conditions of tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0818803 are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901, which establish the framework for making a Tariff Concession Order (TCO). Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a written TCO must be made, declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S(1) provides that a TCO is effective from the day the application was lodged.
Under this Act, Ikea Pty Ltd, the applicant, must ensure that no substitutable goods were produced in Australia on the date the TCO application was submitted. The CEO of Customs has the obligation to review the application and determine whether it meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a TCO, as mandated by section 269P(3). Furthermore, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on whether the TCO should be made.
There are no explicit offences, penalties, or civil/criminal consequences detailed in the explanatory statement for breaching the provisions of this TCO. However, if the CEO determines that the application does not meet the core criteria, the TCO will not be issued. This would mean that the applicant, Ikea Pty Ltd, would not benefit from the reduced duty rate, and the normal duty rates would apply to the specified furniture locks and lock components. The explanatory statement does not outline specific penalties for non-compliance with the TCO process, but it is implicit that failure to meet the core criteria would result in the standard customs duty rates being applied.