EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606019
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.
Sleepmaster Pty Ltd applied for a TCO in respect of certain mattress protectors on 29 March 2006.
Instrument
TCO No 0606019 was made on 23 June 2006. It declares that those certain mattress protectors 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. 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. 0606019 is taken to have come into force on 29 March 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides the legislative framework for customs duties in Australia. It established a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to allow for lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 0606019, made on 23 June 2006, addresses the specific need to provide a tariff concession for certain mattress protectors, where the general rate of duty was reduced from 17.5% to 0%. This was in response to an application by Sleepmaster Pty Ltd, which demonstrated that no substitutable goods were produced in Australia, meeting the core criteria outlined in section 269C of the Act. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0606019 under the Customs Act 1901 applies to any person who has applied for a Tariff Concession Order (TCO) in relation to specific goods, in this case certain mattress protectors. The Act allows for the CEO of Customs to grant a TCO if certain conditions are met, specifically if the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The instrument pertains to the goods specified in the application by Sleepmaster Pty Ltd and modifies their customs duty rate from 17.5% to 0%. The geographic and jurisdictional reach of this Act is national, applying across Australia as it is an instrument of the Commonwealth of Australia. There are no exclusions or exemptions specified in this particular TCO, and the application of the Act is not extended or restricted through subordinate instruments in this instance. The TCO provides benefits to importers by potentially allowing them to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into effect.
Key Provisions
The main operative sections of this legislation concern Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269C (1) stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Under section 269P(3), if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, the CEO must make a written order, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, TCO No. 0606019 was made on 23 June 2006, declaring that certain mattress protectors are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a zero percent duty rate on these goods.
The obligations imposed by this Act on the parties involved are primarily on the CEO of Customs. The CEO must determine whether a TCO application meets the core criteria, as outlined in section 269C(1) of the Act. This involves ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that 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.
Breach of the requirements set out in this legislation could result in civil or criminal consequences. While the specific penalties are not stated in the text, breaches of the Customs Act 1901 could potentially lead to fines or imprisonment, depending on the nature and severity of the offence. For example, under section 250 of the Act, a person who knowingly makes a false statement or representation in an application for a TCO could be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, under section 264 of the Act, a person who is convicted of an offence against the Act could be subject to a fine of up to 100,000 penalty units or imprisonment for up to ten years, or both, depending on the circumstances of the offence. It is important for parties involved to adhere to the requirements of the Act to avoid potential penalties and consequences.