EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411083
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.
ConocoPhillips Australia Pty Ltd applied for a TCO in respect of certain cryogenic storages and loaders on 25 October 2004.
Instrument
TCO No 0411083 was made on 7 January 2005. It declares that those certain cryogenic storages and loaders 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 5%. The rate of duty for the goods subject to the TCO is 3%.
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. 0411083 is taken to have come into force on 25 October 2004.
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 Australian Parliament, establishes a framework for the application of customs duty on imported goods, among other provisions. Part XVA of this Act introduces the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. The primary issue this legislation addresses is the facilitation of tariff concessions for specific imported goods, thereby potentially reducing the duty payable on those goods and encouraging trade. The policy objective, as articulated in the Explanatory Statement, is to ensure that a lower rate of customs duty applies to goods that are the subject of a TCO, provided that certain criteria are met. The 2005 Tariff Concession Instrument No. 0411083 exemplifies this, as it was introduced to provide a tariff concession for certain cryogenic storages and loaders, resulting in a reduced duty rate from 5% to 3%. This instrument was made in response to an application by ConocoPhillips Australia Pty Ltd and came into force on the date the application was lodged, 25 October 2004.
Scope and Application
The Tariff Concession Instrument No. 0411083, made under the Customs Act 1901, applies specifically to certain cryogenic storages and loaders that ConocoPhillips Australia Pty Ltd applied to have tariff concessions for. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders that apply lower rates of customs duty on goods, provided certain criteria are met, such as the absence of substitutable goods being produced in Australia. This particular instrument came into force on the date the application was lodged, 25 October 2004. It is applicable nationwide, governed by the Commonwealth, and provides a reduced customs duty rate from the general 5% to 3% for the specified goods. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; it rather extends benefits to importers who can apply for duty refunds for goods imported since the instrument's effective date. Exclusions apply to goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The scope of this legislation is further defined and potentially extended through subordinate instruments as necessary.
Key Provisions
The Tariff Concession Instrument No. 0411083 under the Customs Act 1901 (sections 269C, 269F, 269P) allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce the customs duty on specific goods. This instrument was made on 7 January 2005, following an application by ConocoPhillips Australia Pty Ltd for certain cryogenic storages and loaders. As per section 269P(3), the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. The TCO declares that these cryogenic storages and loaders are subject to a reduced duty rate of 3%, down from the general rate of 5%.
The obligations imposed by this Act on the parties governed by it include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted (section 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. The TCO itself becomes effective from the date the application was lodged, 25 October 2004 (subsection 269S(1)), without disadvantaging any person's rights or imposing liabilities for actions taken prior to the registration date.
The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not affect any existing rights of persons other than the Commonwealth or impose any new liabilities on any person. The primary requirement for the CEO is to ensure that the application meets the core criteria set out in section 269C of the Act, which stipulates that no substitutable goods must be produced in Australia on the date the application was lodged.
Breach of the provisions under the Customs Act 1901 can lead to various civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions under the Customs Act outline potential sanctions for non-compliance, which can include fines and imprisonment. The severity of penalties would depend on the specific breach and relevant provisions of the Customs Act, with the maximum penalties potentially reaching significant monetary fines and lengthy imprisonment terms for more severe violations.