EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602905
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.
Sea to Summit Pty Ltd applied for a TCO in respect of certain sleeping bag liners on 24 January 2006.
Instrument
TCO No 0602905 was made on 26 May 2006. It declares that those certain sleeping bag liners 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 7.5%. The rate of duty for the goods subject to the TCO is free.
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. The CEO did not receive any submissions in response to this invitation.
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. 0602905 is taken to have come into force on 24 January 2006.
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. 0602905 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically. This legislation enables the Chief Executive Officer of Customs to apply reduced customs duties on goods, provided that there are no substitutable goods produced in Australia, thereby promoting the importation of these goods. The policy objective behind this instrument is to encourage trade and economic efficiency by allowing for lower tariffs on certain imported goods, which are not manufactured locally, thereby potentially lowering costs for consumers and businesses. The instrument was introduced following an application by Sea to Summit Pty Ltd for tariff concessions on certain sleeping bag liners, which was approved as no equivalent goods were being produced in Australia. The instrument took effect from the date of the application, 24 January 2006, and did not adversely affect any existing rights or impose new liabilities on any party.
Scope and Application
The Tariff Concession Instrument No. 0602905 is an instrument made under Part XVA of the Customs Act 1901, which pertains to the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument specifically applies to Sea to Summit Pty Ltd's application for a TCO concerning certain sleeping bag liners. The legislation allows for a lower rate of customs duty on goods subject to a TCO, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument declares that these particular sleeping bag liners are subject to a duty-free rate as specified under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument extends to the national jurisdiction of Australia and applies to the conduct of importing these goods. There are no stated exclusions or exemptions in this particular TCO, and it does not affect any pre-existing rights or liabilities of persons other than the Commonwealth. The rights of importers are positively impacted, as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0602905 under the Customs Act 1901 (the Act) provides for a concession on customs duty for specific goods. According to section 269F of the Act, a person may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is deemed valid and meets the core criteria outlined in sections 269B, 269C, 269D and 269E of the Act, the CEO must make a written order that reduces the customs duty on the specified goods. In this case, the CEO issued TCO No. 0602905 on 26 May 2006, which applies to certain sleeping bag liners, reducing the duty rate from the general 7.5% to free.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that their application complies with the core criteria, particularly that no substitutable goods are being produced in Australia in the ordinary course of business. The CEO must review the application, publish a notice in the Gazette inviting objections, and consider any submissions before making a decision. In this instance, the CEO was satisfied that the sleeping bag liners met the core criteria and published the required notice with no objections received.
Failure to comply with the requirements of the Act may result in legal consequences. The Act does not explicitly outline penalties for non-compliance in this context, but breaches of customs regulations generally can lead to civil and criminal penalties. Civil penalties may include fines, and criminal penalties can result in imprisonment, reflecting the seriousness of non-compliance with customs legislation. The maximum penalties would depend on the specific breach and the provisions of the relevant customs laws.
The TCO does not affect existing rights or impose new liabilities on individuals or entities other than the Commonwealth. Importers of the affected goods may benefit from this concession by applying for a refund of duty paid on imports since the date the TCO was deemed to come into force. This is permitted under the Customs Act and the Customs Regulations 1995, which provide for such refunds under certain conditions. The TCO ensures that the rights of importers are positively impacted without imposing any additional burdens on them or others.