EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818812
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 bed breakfast trays on 15 July 2008.
Instrument
TCO No 0818812 was made on 10 October 2008. It declares that those certain bed breakfast trays 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. 0818812 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, enacted by the Parliament of Australia, addresses the issue of tariff concessions for specific goods by establishing a scheme under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on goods that meet the core criteria, such as not having substitutable goods produced in Australia in the ordinary course of business. In 2008, TCO No. 0818812 was introduced to provide a tariff concession for certain bed breakfast trays, lowering the duty rate to free from the general rate of 5%. The decision to grant the concession was made after no objections were received in response to a public notice inviting submissions. The TCO aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the order, without imposing any new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0818812 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically certain bed breakfast trays in this instance. The Act allows for the application of a lower rate of customs duty to goods that are subject to a TCO, provided the goods meet the specified criteria, such as the absence of substitutable goods produced in Australia. This instrument is applicable to the Commonwealth of Australia and extends to entities and individuals involved in the importation of these goods, including Ikea Pty Ltd, which applied for the TCO. The instrument does not affect the rights of any person, other than the Commonwealth, in relation to activities undertaken prior to the date of registration. However, it does allow for the potential benefit of duty refunds for importers of the specified goods since the date the TCO came into force on 15 July 2008. The scope of the Act can be further refined and extended through subordinate instruments, which can include additional details or specific conditions under which the concessions apply.
Key Provisions
The primary operative sections of this legislation under the Customs Act 1901, particularly within Part XVA, revolve around Tariff Concession Orders (TCOs) (s 269C, s 269F). Section 269F allows for an application to the Chief Executive Officer of Customs (the CEO) for a TCO regarding certain goods. Section 269C outlines the core criteria that must be met for the CEO to consider the application valid, which includes the absence of substitutable goods produced in Australia at the time of application (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written TCO, declaring the specified goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)). In the case of Ikea Pty Ltd, the TCO No. 0818812 made on 10 October 2008, specifies that certain bed breakfast trays are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as no substitutable goods were produced in Australia.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must assess the validity of the TCO application and ensure that the core criteria are met, particularly focusing on whether any substitutable goods were produced in Australia at the time of application (s 269C). If the CEO determines that the application meets the criteria, they are required to make the TCO and publish a notice in the Gazette inviting any objections (s 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's registration date (s 269S(1)). For Ikea Pty Ltd, this means the CEO has assessed and confirmed that the application for the bed breakfast trays met the necessary criteria, resulting in the issuance of TCO No. 0818812.
Under the Customs Act 1901, breaches of the provisions regarding TCOs may lead to civil or criminal consequences. However, the explanatory statement does not explicitly state any specific offences, penalties, or maximum penalties for breaches of the TCO provisions. Typically, breaches of customs regulations can result in penalties including fines and, in serious cases, imprisonment. The precise penalties would depend on the specific breach and the relevant provisions of the Customs Act 1901 or any associated regulations. For Ikea Pty Ltd, compliance with the TCO requirements ensures they avoid any potential penalties associated with non-compliance.