EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511453
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 0511453 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. 0511453 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. 0511453, enacted in 2005 under the Customs Act 1901, aims to provide tariff concessions for specific goods, in this case certain Bed Linen, by reducing the applicable customs duty rate from 17.5% to 0%. This legislative instrument was introduced to facilitate easier and more cost-effective importation of goods by applying a preferential tariff rate. The instrument was developed by the Chief Executive Officer of Customs following an application from Sheridan Australia, and after considering objections from interested parties such as Ecodownunder Pty Ltd. The policy objective is to encourage the import of goods that are not produced domestically, thereby supporting competition and potentially lowering prices for consumers. The instrument came into effect on the date the application was lodged, 31 August 2005, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0511453 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). This Act facilitates the application of a lower rate of customs duty to goods specified in a TCO, provided certain criteria are met. The instrument was made in response to an application by Sheridan Australia for tariff concessions on certain Bed Linen, which became effective on 31 August 2005, the date the application was lodged. The CEO must ensure that the application does not relate to goods specified in section 269SJ of the Act, which are ineligible for TCOs, and must verify that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. If these conditions are satisfied, the CEO issues a TCO that lowers the duty rate from 17.5% to 0%. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who may object to the TCO, and in this case, Ecodownunder Pty Ltd lodged a submission against the application. The TCO does not affect any existing rights or impose liabilities on any person except the Commonwealth.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. A person can apply for a TCO if the goods in question are not specified in section 269SJ (section 269F). The CEO must assess whether the application meets the core criteria, which are outlined in sections 269C, 269B, and 269D, and involves determining if there are substitutable goods produced in Australia. If the CEO is satisfied that the application meets these criteria, they must issue a TCO, specifying the applicable customs duty rate (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must review applications and determine eligibility for a TCO, ensuring that the core criteria are met. The CEO must also publish notices in the Gazette to invite submissions from interested parties, allowing them to object to the proposed TCO (subsection 269K(1)). Additionally, if the CEO believes a party may have reasons to oppose the TCO, they must invite that party to lodge a written submission (subsection 269M(1)).
Breaching the provisions of the Customs Act 1901 concerning TCOs can result in civil or criminal consequences, depending on the nature of the breach. For instance, if a person knowingly makes a false statement in an application for a TCO, they may be liable to a penalty of up to 10,000 penalty units or imprisonment for five years, or both (section 269R). Similarly, failure to comply with the Act’s requirements for duty refunds or other administrative obligations can result in financial penalties or legal action. It is important to note that the TCO itself does not impose liabilities on any person, but the overarching Act and its regulations do provide for penalties for non-compliance.