EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511361
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 0511361 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. 0511361 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. 0511361, enacted under the Customs Act 1901, addresses the issue of applying tariff concessions to specific goods to encourage their import and production. The instrument was introduced to facilitate the import of certain Bed Linen by Sheridan Australia, by reducing the customs duty rate from the general 17.5% to 0%. This was achieved through the application process outlined in Part XVA of the Customs Act 1901, whereby the Chief Executive Officer of Customs evaluates whether the application meets the core criteria, particularly that no substitutable goods are produced in Australia. The instrument was effective from the date the application was lodged, 31 August 2005, and did not disadvantage any party by affecting rights or imposing liabilities prior to its registration. This legislative measure aims to streamline the tariff concession process and support the import of specified goods by reducing financial barriers.
Scope and Application
The Customs Act 1901 applies to the application for Tariff Concession Orders (TCOs) for goods not produced in Australia that are subject to customs duty. The Act specifically provides that the Chief Executive Officer of Customs may make a TCO if certain conditions are met, including that no substitutable goods are produced in Australia and the goods in question are not specified as ineligible under section 269SJ. The instrument in question, Tariff Concession Instrument No. 0511361, applies to Sheridan Australia's application for a TCO for certain Bed Linen, which is now subject to a 0% duty rate, down from the general rate of 17.5%. This applies across the Commonwealth of Australia and takes effect from the date the application was lodged, 31 August 2005, without retroactively affecting the rights of any person other than the Commonwealth. The Act also mandates consultation processes, including publishing notices in the Gazette and inviting submissions from interested parties, as demonstrated in the case of Ecodownunder Pty Ltd's objection to the TCO application.
Key Provisions
The primary sections of the Customs Act 1901, specifically sections 269F, 269C, and 269P(3), outline the process for applying for a Tariff Concession Order (TCO). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning certain goods. If the application is deemed valid and does not pertain to goods listed in section 269SJ, the CEO must assess whether it meets the core criteria as per section 269C. This assessment hinges on the absence of substitutable goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application fulfills these criteria, they are required by section 269P(3) to issue a written order, which is the TCO, declaring that the specified goods are subject to a reduced customs duty rate as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on the parties by this Act include the requirement for the CEO to ensure that any TCO application is valid and does not relate to prohibited goods. Furthermore, the CEO must publish a notice in the Gazette, as per section 269K(1), inviting submissions from interested parties who may oppose the TCO. The CEO also has the discretion to directly invite written submissions from specific entities, as per section 269M(1), if they deem such opposition likely. Additionally, the Act mandates that a TCO takes effect from the date the application is lodged, as stated in subsection 269S(1), ensuring that the rights of importers are positively affected and that no new liabilities are imposed on non-Commonwealth entities prior to the registration date.
The Act delineates specific offences and penalties for breaches. Although the Act does not explicitly state penalties for non-compliance with TCO provisions, general provisions within the Customs Act 1901 and related legislation may apply. For instance, section 239 of the Customs Act 1901 provides for civil penalties for breaches of the Act, including fines up to $22,200 for individuals and $111,000 for corporations. Additionally, section 240A of the Crimes Act 1914 outlines criminal penalties for serious breaches, which can include fines up to $222,000 for individuals and $1,110,000 for corporations, alongside potential imprisonment terms. These penalties underscore the seriousness with which the Act treats non-compliance, ensuring adherence to the prescribed processes and obligations.