EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507512
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 submerged arc welded line pipe on 17 June 2005.
Instrument
TCO No 0507512 was made on 09 September 2005. It declares that those certain submerged arc welded line pipes 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. 0507512 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 Customs Act 1901, enacted by the Australian Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) can be made to reduce the customs duty on certain imported goods. The problem or gap this scheme addresses is the potential economic disadvantage to businesses and consumers if they are required to pay customs duty on imported goods for which there are no domestically produced substitutes. The instrument in question, Tariff Concession Instrument No. 0507512, was introduced to provide a tariff concession for certain submerged arc welded line pipes, allowing them to be imported duty-free. The policy objective is to ensure that Australian businesses and consumers are not unfairly disadvantaged by the imposition of customs duty on goods where there is no Australian-made alternative. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0507512 under the Customs Act 1901 applies to the specific case of certain submerged arc welded line pipes, as applied for by Woodside Energy Ltd. The instrument pertains to entities that import these particular types of goods into Australia, thereby granting them tariff concessions as outlined in the instrument. The scope of this legislation is narrowly focused on the reduction of customs duty for the specified goods, which is contingent on the absence of substitutable goods produced in Australia at the time of application. The instrument’s jurisdictional reach is within the Commonwealth of Australia, as it operates under the authority granted by the Customs Act 1901. Notably, the application of this Act does not extend to goods listed in section 269SJ of the Act, which are explicitly excluded from tariff concessions. The Act allows for the creation of further tariff concession orders through subordinate instruments, thereby potentially expanding its application to other goods not currently covered.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0507512 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order (a Tariff Concession Order or TCO) if satisfied that an application for a TCO meets the core criteria. This instrument declares that certain submerged arc welded line pipes are goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The TCO in question came into force on the day the application was lodged, 17 June 2005 (subsection 269S(1)).
Under the Customs Act 1901, the obligations and requirements imposed by this Act on the parties or entities it governs include the necessity for the CEO to ensure that no substitutable goods are produced in Australia on the day the application was lodged (section 269C). The CEO must also ensure that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions on the matter (subsection 269K(1)). If no submissions are received, the CEO proceeds to make the TCO.
The Act outlines specific offences, penalties, and consequences for breach, although the Explanatory Statement does not detail these in relation to TCOs. Generally, breaches of the Customs Act 1901 can result in civil and criminal penalties. For example, under section 224A of the Act, a person who wilfully makes a false statement or representation in a customs document can be fined up to $22,200 for an individual offence or $111,000 for a corporate offence. Additionally, under section 225A, a person who fails to comply with a notice or direction from the CEO can be fined up to $11,100 for an individual offence or $55,500 for a corporate offence. It is important to note that the maximum penalties for breaches can vary depending on the specific provision of the Act that is breached.