EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411589
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.
Woodside Energy Ltd applied for a TCO in respect of certain electric resistance welded line pipes on 4 November 2004.
Instrument
TCO No 0411589 was made on 1 February 2005. It declares that those certain electric resistance welded line pipes 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. 0411589 is taken to have come into force on 4 November 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 Parliament of Australia, established a framework for the application of Tariff Concession Orders (TCOs) to reduce customs duty on specific goods. The primary objective of this legislation is to provide relief to importers by reducing the duty payable on goods where no suitable Australian-made alternatives are available, thereby encouraging the importation of goods that are not domestically produced. This Act allows the Chief Executive Officer of Customs to grant tariff concessions based on the criteria outlined, such as the absence of substitutable goods produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0411589, which came into force on 4 November 2004, details a specific case where Woodside Energy Ltd successfully applied for a TCO on certain electric resistance welded line pipes. This order reduced the duty on these pipes from 5% to 3%, aligning with the policy objective of promoting efficient trade and reducing costs for importers without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This legislation applies to any person who may apply for a TCO for goods that are not specified as ineligible in section 269SJ of the Act. The application process requires the CEO to determine whether the goods in question meet the core criteria outlined in sections 269C, 269D, and 269E of the Act, which pertain to the absence of substitutable goods produced in Australia at the time the application was lodged. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO specifying the reduced rate of duty applicable to the goods. In the case of TCO No 0411589, the CEO made the order on 1 February 2005, reducing the duty on certain electric resistance welded line pipes from 5% to 3%, effective from the date the application was lodged on 4 November 2004. This order does not retroactively affect any rights or liabilities, and it specifically benefits importers by allowing them to apply for duty refunds on imports made since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0411589, as it applies under the Customs Act 1901, include sections 269C (1) and 269P(3). Section 269C(1) outlines the core criteria for a Tariff Concession Order (TCO) application to be considered valid, while section 269P(3) stipulates that if the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must make a written order (TCO). The instrument specifies that certain electric resistance welded line pipes are subject to a reduced customs duty rate of 3% instead of the general rate of 5%, following a successful application by Woodside Energy Ltd on 4 November 2004.
The obligations and requirements imposed by this Act on the parties involved are several. Firstly, any person seeking to apply for a TCO must ensure their application meets the core criteria as set out in section 269C of the Act. This involves demonstrating that no substitutable goods are being produced in Australia at the time of application. Additionally, the CEO must publish a notice in the Gazette, as per section 269K(1), inviting submissions from interested parties before making a decision on the TCO. The CEO must also ensure that the TCO does not affect the rights of any person adversely as per section 269S(2). Finally, the Act mandates that importers can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
Should there be a breach of the conditions stipulated under this legislation, the Act provides for both civil and criminal consequences. The specific penalties for breach are not detailed in the provided text, but under the Customs Act 1901, violations typically result in fines or imprisonment, or both, depending on the severity of the breach. For instance, knowingly making a false statement in an application could lead to substantial fines and/or imprisonment. The exact penalties would be determined by the courts based on the nature and circumstances of the breach. The Act ensures that any individual or entity failing to comply with the provisions may face significant legal repercussions, reinforcing the importance of adhering to the stipulated requirements.