EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818818
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 bathroom soap dispensers on 15 July 2008.
Instrument
TCO No 0818818 was made on 03 October 2008. It declares that those certain bathroom soap dispensers 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. 0818818 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 Australian Parliament, establishes a framework for administering customs and excise duties, including the provision for Tariff Concession Orders (TCOs) to reduce or eliminate customs duties on specific goods. The Act was introduced to address the need for flexible tariff arrangements that could benefit industries and consumers by reducing the cost of imported goods. Under section 269F, an application for a TCO can be made by any person to the Chief Executive Officer of Customs (CEO) if the goods in question do not fall under the categories specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which includes the absence of substitutable goods produced in Australia, a TCO is issued, resulting in a lower or free customs duty on the specified goods. This process aims to promote fair trade and economic efficiency by ensuring that certain goods are competitively priced without unfairly disadvantaging Australian producers.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) for specific goods, which are then subject to a lower rate of customs duty. The legislation allows any person to apply to the CEO for a TCO, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO assesses the application against the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business. If satisfied, the CEO issues a written order, a TCO, specifying the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies. This legislative framework ensures that the CEO has a structured process for evaluating and granting tariff concessions while maintaining a balance between supporting industry and protecting local production.
Key Provisions
The Tariff Concession Instrument No. 0818818, made under the Customs Act 1901, introduces a tariff concession order (TCO) for certain bathroom soap dispensers. According to section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a lower rate of duty. In this case, the CEO determined that no substitutable goods were produced in Australia, and thus, the general rate of duty of 5% was replaced with a free rate for these specific bathroom soap dispensers.
The Act imposes certain obligations on both the CEO and the applicants for a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this instance, no submissions were received. Furthermore, section 269S(1) dictates that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged, which was 15 July 2008 for TCO No. 0818818.
The Act also includes provisions for penalties and consequences in the case of breaches. However, the explanatory statement does not explicitly mention any specific offences, penalties, or civil/criminal consequences for breach of the TCO. It does, however, state 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 this case, the rights of importers will be beneficially affected, as they 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.