EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511452
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 0511452 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. 0511452 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the imposition of customs duty on imported goods. It allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the duty rate on specified goods under certain conditions. The Tariff Concession Instrument No. 0511452, made in 2005, was introduced to address the specific application by Sheridan Australia for tariff concessions on certain bed linen, which would benefit from a zero duty rate instead of the general 17.5% duty. The process involves an assessment by the CEO to determine if the goods are not produced in Australia and are substitutable. The policy objective of the Act, as illustrated by this instrument, is to provide a mechanism for tariff reductions on imported goods that are not domestically produced and do not have a substitutable counterpart in Australia.
Scope and Application
The Tariff Concession Instrument No. 0511452 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, in this case, certain bed linen products. The legislation is designed to reduce customs duty on goods for which a Tariff Concession Order (TCO) has been approved by the Chief Executive Officer of Customs (CEO). The application of this Act is national in scope, governed by the Commonwealth. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia, a TCO is issued, resulting in a reduced customs duty rate for the specified goods. This concession applies to Sheridan Australia's bed linen products, reducing their customs duty rate from 17.5% to 0%. The legislation also mandates consultation processes, requiring the CEO to publish notices inviting objections or submissions from interested parties, which was demonstrated in the case where Ecodownunder Pty Ltd lodged an objection. The TCO takes effect from the date the application was lodged, without retroactively affecting rights or imposing liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) under which Tariff Concession Orders (TCOs) are made, includes several key provisions. Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. If the CEO determines that the application does not involve goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then assess whether the application meets the core criteria outlined in section 269C. For a TCO application to meet these core criteria, there must be no goods produced in Australia in the ordinary course of business that could be substituted for the goods in question, as defined under section 269D and section 269E.
The obligations imposed by the Act on parties or entities are primarily on the CEO and the applicant. The CEO is obligated to assess applications against the core criteria and to make a written order if the application meets these criteria. The applicant must provide sufficient information to allow the CEO to make this determination. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons to oppose the TCO. In this context, Ecodownunder Pty Ltd submitted an objection to the CEO, indicating their interest in the outcome of the TCO application for Bed Linen.
In terms of consequences for breaches, the Act does not explicitly outline offences or penalties for failing to comply with the provisions of a TCO. However, it is reasonable to infer that any misuse or non-compliance with the terms of a TCO could potentially lead to legal challenges or administrative actions. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it safeguards against the imposition of liabilities for actions taken before the TCO was registered. The rights of importers are specifically protected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.