EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507655
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 crude oil, water and gas separator stabilisers on 21 June 2005.
Instrument
TCO No 0507655 was made on 9 September 2005. It declares that those certain crude oil, water and gas separator stabilisers 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. 0507655 is taken to have come into force on 21 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 regulate the importation and exportation of goods within Australia, including the imposition of customs duties and other charges. The Act was introduced to address the need for a comprehensive legal framework governing trade-related activities, ensuring effective border control, revenue collection, and the enforcement of trade laws. In 2005, the Tariff Concession Instrument No. 0507655 was introduced to provide tariff concessions for certain goods, addressing a specific gap in the existing legislation by allowing for reduced customs duty rates under certain conditions. The instrument was enacted by the Chief Executive Officer of Customs, following a valid application from ROC Oil (WA) Pty Ltd. The policy objective is to provide tariff relief for goods where no substitutable goods are produced in Australia, thereby encouraging the importation of necessary items and promoting fair competition in the market.
Scope and Application
The Tariff Concession Instrument No. 0507655 under the Customs Act 1901 applies to individuals or entities that seek to import specific crude oil, water and gas separator stabilisers, as demonstrated by ROC Oil (WA) Pty Ltd’s application. The Act mandates that the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria, which include the absence of substitutable goods produced in Australia. If the criteria are met, the CEO must issue a Tariff Concession Order (TCO), which was done in this instance on 9 September 2005. This TCO reduces the customs duty on the specified goods from 5% to free, effective from the date the application was lodged, 21 June 2005. The legislation's application is confined to the Commonwealth of Australia, with no submissions received against the TCO, indicating no opposition to its implementation. The TCO does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no previous transactions are disadvantaged or new liabilities imposed.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0507655, made under the Customs Act 1901, pertain to the application process for Tariff Concession Orders (TCOs) and the criteria for their approval. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, a TCO must be issued, declaring that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. The instrument also outlines the commencement date for the TCO, which is the same as the date of the application under subsection 269S(1).
The obligations and requirements imposed by this Act are primarily on the CEO, who must assess TCO applications against the core criteria set out in sections 269C and 269P. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as mandated by subsection 269K(1). The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities on any person in respect of actions taken before the TCO's registration date.
Breach of the provisions set out in the Customs Act 1901 can lead to both civil and criminal consequences. The Act does not explicitly state specific offences, penalties, or civil/criminal consequences for non-compliance with TCOs; however, the general legal framework suggests that failure to adhere to customs regulations can result in penalties, including fines and imprisonment. For instance, under the Crimes Act 1914, penalties for breaches of customs regulations can include fines up to 10,000 penalty units and/or imprisonment for up to 10 years, depending on the severity of the breach. The specific consequences would be determined by the relevant court based on the nature and extent of the non-compliance.