EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901721
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.
Anaconoa Stores Pty Ltd applied for a TCO in respect of certain sleeping bags on 19 January 2009.
Instrument
TCO No 0901721 was made on 14 April 2009. It declares that those certain sleeping bags 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. 0901721 is taken to have come into force on 19 January 2009.
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. 0901721, enacted in 2009, amends the Customs Act 1901 to provide for tariff concessions on certain sleeping bags, thereby addressing the need for reduced customs duties on specific imported goods. This legislative instrument was introduced to ensure that Australian consumers have access to competitively priced products by allowing lower rates of duty for certain goods not produced domestically. The Tariff Concession Orders (TCO) scheme under the Customs Act facilitates these tariff reductions, and the enacting body is the Chief Executive Officer of Customs, who must determine whether an application meets the core criteria for tariff concessions, including the absence of substitutable goods produced in Australia. The policy objective of this legislation is to enhance consumer access to affordable goods, particularly for items not manufactured locally, thus supporting competitive markets.
The instrument was made following an application by Anaconoa Stores Pty Ltd, and the CEO determined that no submissions opposing the concession were received. Consequently, TCO No. 0901721 was issued, effective from the date of the application, 19 January 2009. This instrument declares that the specified sleeping bags are subject to a zero rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, which contrasts with the general rate of 7.5%. Importantly, the TCO ensures that it does not disadvantage any person or impose new liabilities, while allowing importers to apply for duty refunds on goods imported since the effective date.
Scope and Application
The Customs Act 1901, as amended, facilitates the issuance of Tariff Concession Orders (TCOs) to reduce the rate of customs duty on certain goods, providing economic benefits to businesses and consumers. This mechanism is applicable to any person or entity seeking to import specific goods that are not being produced domestically and do not have suitable substitutes available within Australia. The process requires an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria, particularly the absence of substitutable goods produced in Australia. Once the criteria are satisfied, a TCO is issued, granting tariff concessions on the specified goods. The geographic reach of this legislation is national, as it operates under the purview of the Commonwealth and applies across Australia. Notably, the Act excludes certain goods from eligibility for TCOs, as detailed in section 269SJ. The application of this Act may be further refined through subordinate instruments, which can specify additional criteria or conditions for the issuance of TCOs. The instrument in question, TCO No. 0901721, pertains to specific sleeping bags and came into effect on the date of the application, 19 January 2009, without affecting existing rights or imposing new liabilities.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0901721 (F2009L01974) relate to the creation of a Tariff Concession Order (TCO) for certain sleeping bags. Section 269F of the Customs Act 1901 allows an applicant to seek a TCO from the Chief Executive Officer (CEO) of Customs. The CEO is required to assess whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods are being produced in Australia. If these criteria are met, the CEO must issue a written TCO, as stipulated in subsection 269P(3). This particular TCO No. 0901721 was made on 14 April 2009, declaring that the specified sleeping bags are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 7.5%.
The obligations imposed by the Act on the parties include the requirement for the CEO to ensure that a TCO application is valid and meets the specified criteria before it is issued. The CEO must also publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested party to lodge a submission if they believe the TCO should not be made. In this case, no submissions were received in response to the notice. Additionally, the CEO must ensure that the TCO does not affect the rights of any person adversely, as per the provisions in subsection 269S(1). Instead, the TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Breaches of the obligations set out in the Customs Act 1901 may lead to various consequences. If the CEO fails to adhere to the legislative requirements for issuing a TCO, this could result in the TCO being deemed invalid, leading to potential financial losses for the applicant and possibly the imposition of the standard customs duty rates. Furthermore, any person who knowingly or recklessly contravenes any provision of the Customs Act may be subject to penalties. The specific penalties for breaches are not detailed in the explanatory statement, but generally, they may include fines or imprisonment, depending on the severity of the offence.