EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823645
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 applied for a TCO in respect of certain bottle openers on 29 July 2008.
Instrument
TCO No 0823645 was made on 17 October 2008. It declares that those certain furniture or cabinet handles or knobs 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. 0823645 is taken to have come into force on 29 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 the administration of customs and excise duties and provides the legislative basis for Tariff Concession Orders (TCOs). The Act was introduced to address the need for a mechanism to reduce customs duties on certain imported goods under specific conditions. The Tariff Concession Instrument No. 0823645, made on 17 October 2008, is a specific instance where the Chief Executive Officer of Customs granted a TCO to Ikea for certain bottle openers, reducing their duty rate to free from 5%. The policy objective of this measure was to ensure that no substitutable goods were being produced in Australia, thereby providing a concession to encourage the importation of these specific goods. The instrument was published in the Gazette, inviting any objections, none of which were received. The TCO was effective from the date the application was lodged, 29 July 2008, without disadvantaging or imposing liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0823645 under the Customs Act 1901 applies to individuals and entities seeking tariff concessions on specific goods imported into Australia. It particularly targets those involved in the importation of certain furniture or cabinet handles or knobs, as exemplified by Ikea's application for bottle openers. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, as it applies across the Commonwealth of Australia. However, it excludes goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The application of the Act can be further extended or restricted through subordinate instruments, although the specific details of such extensions or restrictions are not outlined in the provided text. The instrument in question, TCO No. 0823645, came into force on the day the application was lodged, 29 July 2008, and it grants free duty rates on the specified goods, benefiting importers by allowing them to apply for refunds on duties paid prior to the concession.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0823645, introduces a scheme whereby Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs (CEO). Under section 269F, a person may apply for a TCO in respect of goods, provided they are not among those specified in section 269SJ that cannot be subject to a TCO. The CEO must assess the application against the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
Entities seeking a TCO must ensure their application meets these criteria and submit it to the CEO. If satisfied, the CEO must issue a written TCO, as mandated by section 269P(3). This order declares that the goods in question are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995. For the specific case of certain bottle openers, the TCO No. 0823645, made on 17 October 2008, specifies that these goods are to be treated under item 50 of Schedule 4, with a duty rate of free, down from the general rate of 5%.
The CEO is required by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties on the application for a TCO. In this case, no submissions were received. Additionally, the TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1), meaning TCO No. 0823645 is effective from 29 July 2008. Importantly, the TCO does not affect any existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Regarding potential breaches or non-compliance, the Act does not specify particular offences or penalties within the instrument itself. However, any general contravention of the Customs Act 1901 or its regulations could result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties may include fines, while criminal penalties could include imprisonment, depending on the specific provisions of the Customs Act and other applicable laws.