EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511363
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 0511363 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. 0511363 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. 0511363, enacted under the Customs Act 1901, addresses the need for a streamlined process in granting tariff concessions to ensure that Australian businesses can access goods at a reduced customs duty rate. This instrument was introduced by the Chief Executive Officer of Customs in response to an application by Sheridan Australia for tariff concessions on certain Bed Linen. The Act provides a framework for the CEO to assess and approve tariff concession applications, ensuring that the concessions are only granted if the goods in question are not substitutable by Australian-produced goods. The instrument declares that the Bed Linen in question are subject to a zero percent duty rate, reducing the general rate of 17.5 percent. The process involved publication in the Gazette and consideration of objections from interested parties, such as Ecodownunder Pty Ltd, thereby ensuring a transparent and inclusive decision-making process. The Tariff Concession Instrument is designed to foster a competitive environment by lowering the cost of imported goods, ultimately benefiting importers who can apply for duty refunds on eligible goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation allows for the application of lower rates of customs duty on certain goods, provided that specific conditions are met. The Act applies to individuals or entities seeking to import goods that qualify for a tariff concession, and it is relevant to the industries involved in the importation and production of goods in Australia. The geographic scope of this legislation is national, as it pertains to the application of customs duties across Australia. Exclusions from this Act include goods specified in section 269SJ, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, such as regulations, which may provide additional criteria or procedures for the implementation of TCOs. The Customs Act 1901, therefore, provides a structured approach to managing tariff concessions for certain imported goods, ensuring that the process is transparent and allows for stakeholder engagement through public notices and submissions.
Key Provisions
The Tariff Concession Order No. 0511363, made under the Customs Act 1901 (the Act), sets out specific provisions for tariff concessions applicable to certain Bed Linen. The main operative sections of this legislation include sections 269C, 269F, and 269P. Section 269F of the Act permits an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria outlined in section 269C, they are required to issue a TCO. This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty. In this case, the TCO No. 0511363 declares that certain Bed Linen are subject to item 50 of Schedule 4, with a duty rate of 0%.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application process for a TCO. The Act stipulates that an applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. The CEO is required to assess the application against these criteria and, if satisfied, must make the TCO. Additionally, the CEO must ensure that any objections or submissions are considered, as mandated by sections 269K and 269M of the Act. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, thereby fulfilling a procedural requirement before issuing the TCO.
In terms of potential offences, penalties, or consequences for breach, the Act does not explicitly outline criminal sanctions for non-compliance with the TCO provisions. However, failure to adhere to the stipulated criteria for a TCO application could result in the CEO declining to issue the order. For example, if substitutable goods were indeed being produced in Australia, the CEO would not be required to make the TCO. Civil consequences may include the inability to claim tariff concessions, leading to potential financial losses for the applicant. Additionally, any person who knowingly provides false information in an application may face legal action under other relevant provisions of the Customs Act or other applicable legislation.
Overall, the Tariff Concession Order No. 0511363 provides a clear framework for granting tariff concessions on certain Bed Linen. It outlines the process for application and assessment, mandates procedural steps such as public notification, and sets out the conditions under which tariff concessions can be granted. While the Act does not specify criminal penalties for breaches, it does impose clear obligations on applicants and the CEO to ensure compliance with the legislative requirements.