EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511455
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 0511455 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. 0511455 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. 0511455 was enacted in 2005 under the Customs Act 1901 to address the issue of tariff concessions for specific goods, ensuring they are accessible and affordable for consumers. This instrument was introduced by the Chief Executive Officer of Customs, in line with the core criteria specified in section 269C of the Act, which mandates a zero rate of customs duty for goods not produced domestically and substitutable by imported products. The instrument was made in response to an application from Sheridan Australia for tariff concessions on certain Bed Linen, leading to the declaration that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a reduced duty rate from 17.5% to 0%. This concession aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the application date.
Scope and Application
The Tariff Concession Instrument No. 0511455 under the Customs Act 1901 applies to any individual or entity seeking to import goods into Australia that qualify for a tariff concession, specifically in the case of Sheridan Australia’s application for certain bed linen. The instrument is applicable to any goods specified in the application, provided they meet the criteria set out in section 269C of the Act, which includes the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it pertains to imports into Australia and the concessions are governed by the Customs Act 1901, which has a Commonwealth jurisdiction. The Act does not specify exclusions or exemptions other than those outlined in section 269SJ, which details goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations and notices, which can provide further detail on the processes and criteria for tariff concessions.
Key Provisions
The Customs Act 1901 provides a framework for the imposition of customs duty on imported goods, with specific provisions for Tariff Concession Orders (TCOs) under section 269F. A TCO can be applied for by any person, and if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria (section 269C), they must make a written order (section 269P(3)). For Sheridan Australia's application concerning certain bed linen, a TCO was issued on 20 December 2005, applying a zero per cent duty rate, as no substitutable goods were produced in Australia at the time of application. This TCO is effective as of the date the application was lodged, 31 August 2005, and it benefits importers by allowing them to claim refunds for duty paid on imports since that date.
The Act imposes several obligations on parties involved with TCOs. The CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ, which excludes certain goods from the concession scheme. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. This was done in the case of Sheridan Australia, where Ecodownunder Pty Ltd lodged an objection. Additionally, under subsection 269M(1), the CEO may invite specific parties to lodge written submissions if they consider there might be opposition to the TCO. The CEO exercised this option by inviting Ecodownunder to submit its views.
Failure to comply with the requirements of the Customs Act 1901, including any related regulations, may result in various civil or criminal consequences. For instance, if an entity intentionally provides false or misleading information in a TCO application, it could be subject to penalties. Under section 234 of the Customs Act, a person who contravenes certain provisions can be liable to a penalty of up to $22,200 for an individual and $111,000 for a body corporate, depending on the severity of the breach. Additionally, repeated or serious breaches could lead to more severe penalties, including imprisonment, as outlined in the Act. The Act also provides for the imposition of fines for incorrect claims of refunds or other financial benefits that result from non-compliance with the Act's provisions.