EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818807
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 matching key furniture lock components on 15 July 2008.
Instrument
TCO No 0818807 was made on 03 October 2008. It declares that those certain matching key furniture 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. 0818807 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 Customs Act 1901 provides a framework for the imposition of customs duty on imported goods, with specific mechanisms for tariff concession orders (TCOs) designed to reduce the duty on certain goods under particular circumstances. Enacted by the Australian Parliament, the Act aims to regulate the importation of goods while facilitating trade by offering duty concessions where appropriate. The Tariff Concession Instrument No. 0818807, made in 2008, exemplifies this regulatory approach by addressing a specific gap in the duty structure for certain imported goods, in this case, matching key furniture lock components. The policy objective here is to ensure that no substitutable goods are produced in Australia, thereby allowing for lower duty rates on the imported items, thereby promoting competitive pricing and potentially encouraging domestic consumption of these goods.
Scope and Application
The Tariff Concession Instrument No. 0818807 under the Customs Act 1901 applies specifically to certain matching key furniture lock components and is directed towards entities seeking to import these goods into Australia. The instrument was made to address the application by Ikea Pty Ltd for a Tariff Concession Order (TCO) on 15 July 2008. The instrument is effective from the date the application was lodged, 15 July 2008, and is designed to provide relief by reducing the customs duty on these particular goods to zero, whereas the general duty rate is 5%. The instrument ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty paid on these goods since the TCO's effective date. Notably, the instrument does not impose any new liabilities or disadvantage any person other than the Commonwealth, and it does not affect any rights or liabilities in respect of actions taken before its registration.
Key Provisions
The key operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0818807, are sections 269C, 269F, 269K, 269P, 269S, and 269SJ (sections referenced in parentheses). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods, provided the goods are not specified in section 269SJ. If the application meets the core criteria outlined in section 269C, the CEO must make a written TCO. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions on the proposed TCO, while section 269P specifies that if the CEO is satisfied the application meets the criteria, a TCO must be made. Section 269S dictates the commencement date of a TCO, which is the date the application was lodged.
The obligations imposed by the Act on parties and entities include ensuring that any application for a TCO is lodged with the CEO and that the application adheres to the criteria set out in section 269C. The CEO is obligated to assess whether the application meets the core criteria, including verifying that no substitutable goods were produced in Australia on the date the application was lodged. Furthermore, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties. If no submissions are received, the CEO proceeds to make the TCO.
Any breach of the requirements stipulated in the Act may lead to civil or criminal consequences. For instance, if a person knowingly or recklessly makes a false statement in an application for a TCO, they could face penalties. Under the Customs Act 1901, penalties for making false statements include fines of up to $11,000 or imprisonment for up to one year, or both, for individuals, and fines of up to $55,000 for corporations. These penalties underscore the seriousness with which the Act treats compliance and the integrity of the TCO process.