EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507509
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.
Roc Oil (WA) Pty Ltd applied for a TCO in respect of certain chemical injection subsea umbilicals on 17 June 2005.
Instrument
TCO No 0507509 was made on 09 September 2005. It declares that those certain chemical injection subsea umbilicals 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 free.
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. 0507509 is taken to have come into force on 17 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. 0507509, enacted in 2005 under the Customs Act 1901, addresses the need for tariff concessions on specific goods, thereby promoting fair trade practices by ensuring Australian importers are not at a competitive disadvantage relative to imported goods. This legislation was introduced to provide relief through reduced customs duties on certain goods that are not produced domestically. The instrument was developed and issued by the Chief Executive Officer of Customs, pursuant to the authority granted under the Act. The primary policy objective behind this instrument is to facilitate the import of goods that are not produced in Australia, thus ensuring that Australian consumers and businesses can access a broader range of products at potentially lower costs. By doing so, the Act supports economic efficiency and consumer choice within the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0507509, made under Part XVA of the Customs Act 1901, applies to the concession of tariff rates on certain chemical injection subsea umbilicals. This instrument was enacted to provide relief from customs duty for specific goods that meet the criteria for a Tariff Concession Order (TCO). The Act applies to individuals or entities, such as Roc Oil (WA) Pty Ltd, who apply for a TCO on behalf of the goods they import. The Act's jurisdiction is Commonwealth-wide, extending across Australia. The legislation does not apply to goods specified in section 269SJ of the Customs Act 1901, which outlines goods that are ineligible for a TCO. The Act can extend its application through subordinate instruments, as specified in the Customs Tariff Act 1995. The CEO of Customs must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business before a TCO can be issued, ensuring that local production is not adversely affected. The TCO No. 0507509, which came into force on 17 June 2005, provides a zero rate of duty on the specified goods, down from the general rate of 5%.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0507509, under the Customs Act 1901, pertain to the process and criteria for establishing Tariff Concession Orders (TCOs) (sections 269C, 269F, 269SJ, and 269P). Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question are not those specified in section 269SJ which cannot be subject to a TCO. Section 269C sets out the core criteria that must be met for a TCO application to be considered, specifically that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, a TCO must be issued (section 269P(3)).
The obligations and requirements imposed by this Act on the parties or entities it governs include the necessity for applicants to ensure their goods meet the core criteria specified in section 269C. The CEO is obligated to publish a notice in the Gazette once an application is accepted as valid (subsection 269K(1)), inviting any interested parties to submit objections if they believe the TCO should not be granted. The CEO must also ensure that no substitutable goods were produced in Australia on the day the application was lodged. The Act further mandates that the rights of importers will be beneficially affected, enabling them to apply for a refund of duty on goods imported since the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 can result in various civil or criminal consequences. For instance, if an application for a TCO is found to be fraudulent or misleading, the applicant may face legal action. The Act does not explicitly state penalties for breaches; however, general provisions under the Customs Act could apply, including fines and imprisonment. The maximum penalties for contraventions of the Customs Act can vary widely depending on the nature and severity of the breach, but they can include substantial fines and imprisonment for serious offences. Importers who fail to apply for a refund of duty under the TCO provisions could also face financial penalties or legal action for non-compliance with the Act.