EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506584
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 Valves on 2 June 2005.
Instrument
TCO No 0506584 was made on 21 October 2005. It declares that those certain Valves 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 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. 0506584 is taken to have come into force on 2 June 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 Customs Act 1901 was enacted to facilitate and regulate the importation and exportation of goods in Australia, with the aim of ensuring efficient customs procedures and revenue collection. The Act includes provisions for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce the rate of customs duty on specific goods under certain conditions. The Tariff Concession Instrument No. 0506584, issued in 2005, is an example of such an order. This particular instrument was introduced to address the specific needs of Woodside Energy Ltd, which applied for the concession on certain valves. The policy objective of this instrument is to provide tariff relief where no substitutable goods are produced in Australia, thereby supporting the importer's ability to obtain goods at a reduced duty rate. The instrument ensures that no existing rights or liabilities of persons other than the Commonwealth are adversely affected, while benefiting importers who can now apply for a refund of duty on goods imported since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0506584, made under Part XVA of the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods. In this instance, the instrument was applied to Woodside Energy Ltd, which sought a concession for certain Valves. The instrument is effective from the date the application was lodged, which is 2 June 2005. The primary purpose of this legislation is to facilitate the reduction or elimination of customs duty on certain goods, provided they meet specific criteria. These criteria include the absence of substitutable goods being produced in Australia, as outlined in sections 269C, 269D, 269E, and 269SJ of the Act. The instrument reduces the general duty rate of 5% to 0% for the specified goods, enhancing the competitive advantage of importing these items. The legislation extends across the Commonwealth, with the application process managed by the Chief Executive Officer of Customs, who is mandated to publish notices in the Gazette to invite submissions from interested parties, although no submissions were received in this instance. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to its registration.
Key Provisions
The Tariff Concession Order (TCO) No. 0506584, made under section 269C of the Customs Act 1901, applies to specific Valves and provides a concession on the customs duty rate. Section 269P(3) of the Act mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a written order (the TCO) must be made. This particular TCO specifies that the Valves are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to 0%. This concession is applicable from the date the application was lodged, 2 June 2005, as per subsection 269S(1) of the Act.
Under the Customs Act 1901, the CEO has a number of obligations when handling a TCO application. Firstly, the CEO must ensure that the application is not for goods specified in section 269SJ of the Act, which are ineligible for a TCO. Once an application is deemed valid, the CEO must satisfy themselves that the application meets the core criteria as outlined in section 269C of the Act. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If these conditions are met, the CEO is required to make the TCO and publish a notice in the Gazette inviting any interested parties to lodge submissions, as per subsection 269K(1) of the Act. In this instance, no submissions were received.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline offences or penalties related to breaches of a TCO or its application process. However, any misuse or fraudulent claims regarding the application of a TCO could potentially fall under other relevant sections of the Customs Act, which might impose civil or criminal penalties. It is crucial for applicants and beneficiaries to ensure compliance with all relevant provisions to avoid any adverse legal consequences. The TCO itself ensures that no existing rights of any person (other than the Commonwealth) are adversely affected and does not impose any new liabilities.