EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511454
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 0511454 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. 0511454 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. 0511454, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, thereby supporting industry competitiveness and consumer access to affordable products. This instrument allows the Chief Executive Officer of Customs to apply lower customs duty rates on certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The primary objective of this legislation is to facilitate economic efficiency and to ensure that Australian businesses can compete effectively in the global market by reducing the cost burden on certain imported goods. This instrument was developed through a consultative process, inviting submissions from interested parties, ensuring that the decision-making process is transparent and inclusive. The concession aims to benefit importers by potentially allowing them to claim refunds on duties paid before the tariff concession took effect, thus aligning with the policy objective of providing relief to Australian consumers and businesses without imposing new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0511454, pertains to the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods, thereby reducing the customs duty rate applicable to those goods. This legislative instrument applies to any person or entity that applies for a TCO in relation to goods that are not explicitly excluded under section 269SJ of the Act. The scope of the legislation extends to all industries and types of conduct or transactions involving the importation of goods that are subject to customs duties, with a particular focus on those seeking to benefit from a reduced tariff rate through a TCO. The jurisdiction of this legislation is Commonwealth, affecting all states and territories within Australia. Notably, the legislation does not apply to goods specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The Act allows for further specification and extension of its application through subordinate instruments, ensuring flexibility in responding to various economic and trade scenarios.
Key Provisions
The primary sections of this legislation concern the application and approval of Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901 (section 269C). Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO, which, if approved, allows for a reduced rate of customs duty on the specified goods. Section 269SJ specifies goods that cannot be subject to a TCO, and section 269C outlines the core criteria that must be satisfied for an application to be approved. These criteria include the absence of substitutable goods produced in Australia on the day the application is lodged, as defined by sections 269D and 269E. If the CEO determines that the application meets these criteria, they are required to issue a written TCO (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved include the duty of the CEO to assess applications for TCOs against the core criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO (subsection 269K(1)). Furthermore, if the CEO believes that a specific person may oppose the TCO, they may invite that person to submit a written objection (subsection 269M(1)). In this case, Sheridan Australia applied for a TCO on 31 August 2005, and Ecodownunder Pty Ltd lodged an objection, which the CEO considered and addressed.
Under this legislation, breaches of the outlined procedures or non-compliance with the TCOs may result in civil or criminal consequences. While the Act does not explicitly state specific penalties, breaches of customs regulations generally may lead to fines, imprisonment, or both under the Customs Act 1901. The maximum penalties can vary significantly depending on the severity and intent of the breach, but they can include substantial fines and/or imprisonment terms that reflect the seriousness of the offence. The Act ensures that TCOs do not affect the rights of any person except the Commonwealth, and it provides for refunds of duty to importers of the affected goods as stipulated in the Regulations (paragraph 126(1)(r)).