EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502740
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 supported catalysts on 1 March 2005.
Instrument
TCO No 0502740 was made on 6 May 2005. It declares that those certain supported catalysts 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. 0502740 is taken to have come into force on 1 march 2005.
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. 0502740, enacted in 2005, addresses a specific need within the Customs Act 1901 to facilitate tariff concessions for certain goods, thereby reducing the customs duty payable on these goods. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods specified in the order, provided the application meets the core criteria. In this case, Woodside Energy Ltd applied for a TCO concerning certain supported catalysts, which was granted after the CEO determined that no substitutable goods were produced in Australia, fulfilling the legislative requirements.
This instrument was developed and introduced by the Australian Parliament under the authority of the Customs Act 1901, aiming to support economic efficiency by allowing reduced customs duties for specific imported goods where no local alternatives exist. This mechanism ensures that Australian importers of these goods can benefit from lower duty rates, fostering competitive practices within the industry.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCO) for specified goods, thereby reducing the customs duty applied to them. The Act applies to any person or entity seeking to import goods that are eligible for such concessions, provided these goods do not fall under the exclusions outlined in section 269SJ. The scope of the Act encompasses the entire Commonwealth of Australia, thereby applying uniformly across states and territories. The application process requires that the goods in question are not substitutable by any products manufactured within Australia and are not produced in the ordinary course of business as defined in sections 269D and 269E respectively. Notably, the Act allows for the creation of subordinate instruments to extend or restrict the application of TCOs, ensuring flexibility and precision in its implementation. Any TCO made under the Act does not retroactively affect the rights of parties other than the Commonwealth, ensuring that no pre-existing liabilities or rights are compromised.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs), which reduce the rate of customs duty for certain goods. Under section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria set out in section 269C—specifically, that no substitutable goods are produced in Australia in the ordinary course of business—a TCO will be issued. This process was followed in the case of TCO No. 0502740, which applies to certain supported catalysts and was issued on 6 May 2005, declaring these goods subject to a lower duty rate of 3% as opposed to the general rate of 5%.
The obligations imposed by the Customs Act 1901 on parties subject to TCOs are primarily administrative. The CEO must ensure that applications meet the core criteria before issuing a TCO, which involves verifying that no substitutable goods are produced in Australia. Once a TCO is issued, it becomes effective from the date the application was lodged, as stipulated in subsection 269S(1). In this instance, TCO No. 0502740 is effective from 1 March 2005. The CEO must also publish a notice in the Gazette inviting any objections to the TCO, as required by subsection 269K(1). In the case of TCO No. 0502740, no objections were received, and the TCO was issued accordingly.
In terms of potential breaches and penalties, the Customs Act 1901 does not explicitly outline criminal or civil penalties for non-compliance with TCOs. However, general provisions within the Act and related legislation may apply to fraudulent claims or other breaches of customs regulations. For instance, under the Crimes Act 1914, individuals or entities found to be engaging in fraudulent activities related to customs duties could face significant penalties, including fines and imprisonment. Although the specific penalties are not detailed within the TCO instrument itself, adherence to the Act's broader regulatory framework is crucial to avoid such consequences.