EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506789
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 Line Pipe on 3 June 2005.
Instrument
TCO No 0506789 was made on 21 October 2005. It declares that those certain Line Pipe 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. 0506789 is taken to have come into force on 3 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 Tariff Concession Instrument No. 0506789 was enacted in 2005 as a means to address the need for tariff concessions under the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods, provided that certain conditions are met. Specifically, a TCO may be granted if no substitutable goods are produced in Australia, as defined by the Act. This instrument was introduced by the Australian government to facilitate trade by reducing the cost of importing certain goods, thereby encouraging economic activity and competition within the market.
The enacting body in this case was the Australian government, and the policy objective was to streamline the customs process by allowing for tariff concessions on specific goods under the Customs Act 1901. By establishing a framework for TCOs, the Act aimed to ensure that Australian businesses and consumers benefit from lower import costs, which can contribute to overall economic growth. Woodside Energy Ltd's application for a TCO for certain Line Pipe exemplifies how this legislation can be applied to reduce the duty on specific goods, thereby promoting efficiency and fairness in the customs process.
Scope and Application
The Tariff Concession Order No. 0506789 under the Customs Act 1901 applies to certain Line Pipe, specifically those identified in the application submitted by Woodside Energy Ltd on 3 June 2005. The order is issued by the Chief Executive Officer of Customs (CEO) in accordance with Part XVA of the Act, which allows for the establishment of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. This particular order applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined by the Act. The TCO reduces the duty rate from the general rate of 5% to 0% for the specified Line Pipe, as determined by the CEO after considering the application and relevant criteria. The order is effective from the date the application was lodged, 3 June 2005, and does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth. Importers of the specified goods can benefit from the reduced duty rate and may apply for a refund of duty paid on imports since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0506789 under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act. Section 269C sets the core criteria for a TCO, which includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order (a TCO) under section 269P(3) that declares the goods subject to the order.
Under this Act, the CEO has specific obligations and requirements to fulfil when processing an application for a TCO. Once an application is accepted as valid under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. In this case, the CEO did not receive any submissions in response to the published notice. Additionally, the CEO must ensure that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date, as per section 269S(1).
Breaching the requirements or obligations under the Customs Act 1901 can result in various consequences. Although the Explanatory Statement does not detail specific offences or penalties, it is understood that failure to comply with the Act could lead to civil or criminal consequences. The maximum penalties for breaches of customs laws can vary significantly depending on the nature and severity of the offence, but they can include substantial fines and, in some cases, imprisonment. Therefore, parties subject to this legislation must ensure strict adherence to its provisions to avoid such adverse outcomes.