EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507308
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 Membrane Cell Electrolysers on 10 June 2005.
Instrument
TCO No 0507308 was made on 2 September 2005. It declares that those certain Membrane Cell Electrolysers 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. 0507308 is taken to have come into force on 10 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 provide a framework for the regulation of customs and excise duties in Australia. One of the mechanisms established under the Act is the ability to issue Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the rate of customs duty on specified goods. This process was introduced to address the need for flexibility in applying customs duties to ensure that Australian industries can access necessary goods at reduced costs, thereby fostering economic growth and competitiveness. The policy objective is to facilitate the importation of goods that are not produced domestically, thus supporting industries that rely on imported materials or components. Parliament enacts the Customs Act 1901, providing the legal basis for the administration of customs duties and the issuance of TCOs to meet specific economic needs and promote trade efficiency.
Scope and Application
The Customs Act 1901, under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs (CEO) may issue to lower the rate of customs duty on certain goods. These orders are subject to specific criteria outlined in the Act, including the absence of substitutable goods produced in Australia in the ordinary course of business. Section 269C of the Act stipulates that if the CEO finds that the application for a TCO meets these core criteria, they are required to issue a written order applying a lower duty rate, as specified in Schedule 4 of the Customs Tariff Act 1995. This legislative framework applies to any person or entity seeking to import goods eligible for tariff concessions, provided the goods are not specified in section 269SJ of the Act as ineligible for TCOs. The application process mandates public notice and invites objections, although in the case of TCO No. 0507308, no submissions were received. The commencement of such an order, as per subsection 269S(1), is effective from the date the application was lodged, offering benefits such as duty refunds to importers without imposing additional liabilities on them.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant here are sections 269C, 269B, 269D, 269E, 269F, 269P(3), 269SJ, and 269K(1). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, as defined by section 269C, and does not pertain to goods that cannot be subject to a TCO as outlined in section 269SJ, the CEO must make a TCO (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions if the application is deemed valid (section 269K(1)). The TCO comes into effect on the date the application was lodged (section 269S(1)).
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that any application for a TCO is reviewed to determine whether it meets the core criteria, particularly focusing on whether substitutable goods are being produced in Australia. The CEO must also publish a notice in the Gazette to invite submissions from any interested parties. If no submissions are received, the CEO must proceed to make the TCO. Additionally, the CEO is required to ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken before the TCO was made.
The Act does not specify any offences or penalties for failure to comply with the provisions related to the making of a TCO. However, it does outline the civil and criminal consequences for breaches of other provisions in the Customs Act 1901. These consequences can include fines and imprisonment, depending on the nature and severity of the breach. The specific penalties are detailed in other sections of the Customs Act and related regulations, but they are not mentioned in the context of this particular TCO. The focus here is on ensuring that the TCO is made correctly and transparently, with an opportunity for public input, rather than on punitive measures for non-compliance with the TCO process itself.