EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511359
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.
Sheridan Australia applied for a TCO in respect of certain Bed Linen on 31 August 2005.
Instrument
TCO No 0511359 was made on 20 December 2005. It declares that those certain Bed Linen 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 17.5%. The rate of duty for the goods subject to the TCO is 0%.
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. One submission objecting to the TCO application was received from Ecodownunder Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Ecodownunder to lodge a written submission.
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. 0511359 is taken to have come into force on 31 August 2005.
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. 0511359 was introduced under the Customs Act 1901 to provide tariff concessions for certain goods, specifically targeting the reduction of customs duty rates. Enacted by the Chief Executive Officer of Customs in response to an application from Sheridan Australia on 31 August 2005, the instrument aims to facilitate trade by reducing the duty on specified bed linen from 17.5% to 0%. This initiative was designed to address the economic and competitive challenges faced by Australian importers and manufacturers, ensuring that Australian businesses remain viable and competitive in the global market. The instrument was subject to a consultation process as outlined in the Customs Act 1901, allowing interested parties such as Ecodownunder Pty Ltd to voice their concerns and submit objections. The concession came into force on the date of the application, 31 August 2005, and provides beneficial rights to importers, including the ability to apply for duty refunds on imports made since that date, without imposing any new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0511359, made under section 269F of the Customs Act 1901, applies to goods specified in the instrument, namely certain Bed Linen, which are now subject to a zero rate of customs duty as opposed to the general rate of 17.5%. This concession was granted following an application by Sheridan Australia, and the Chief Executive Officer of Customs (the CEO) determined that the application met the core criteria set out in section 269C of the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The instrument extends its application to any imports of the specified bed linen entering Australia from the date the application was lodged, 31 August 2005, and it does not impose any liabilities on persons importing these goods before the date of registration. The scope of the legislation is limited to the customs duty aspect of the specified goods, with no mention of any exclusions, exemptions, or thresholds beyond those outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The instrument’s application is further extended or restricted through subordinate instruments as necessary to ensure compliance with the core criteria and other relevant legislative provisions.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in the Explanatory Statement, include section 269F, which allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). This application process is detailed in section 269C, which stipulates the core criteria that must be met for the CEO to consider the application. If these criteria are met, the CEO is required to issue a written order under section 269P(3), effectively granting the tariff concession. Section 269K(1) and section 269M(1) then require the CEO to publish a notice in the Gazette and potentially invite submissions from interested parties regarding the application. Finally, under section 269S(1), the TCO is considered to come into force on the day the application is lodged, although it does not affect pre-existing rights or impose liabilities retroactively.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the TCO process. The CEO is required to assess whether an application for a TCO meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods are being produced in Australia on the day the application is lodged. The CEO must also publish a notice in the Gazette as per section 269K(1), inviting submissions from any interested parties who may have reasons to oppose the TCO. Additionally, section 269M(1) allows the CEO to directly invite submissions from specific parties if they deem it necessary. The Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken before the order's registration.
The Act also specifies potential consequences for breaches of its provisions related to TCOs. While the explanatory statement does not detail specific offences, breaches of the Customs Act 1901 generally could lead to civil or criminal penalties. For civil penalties, fines can be imposed as stipulated under relevant sections of the Act or associated regulations. For criminal penalties, the maximum fines can be substantial, reflecting the seriousness of contravening customs regulations. However, the explanatory statement does not provide specific maximum penalties for breaches related to TCOs. It is essential for parties involved to adhere to the Act's requirements to avoid any potential legal repercussions.