EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510515
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 seamless line pipe on 09 August 2005.
Instrument
TCO No 0510515 was made on 28 October 2005. It declares that those certain seamless 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. 0510515 is taken to have come into force on 09 August 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 the application of customs duty on imported goods. To address the issue of ensuring that Australia’s industrial base is not unfairly disadvantaged by international competition, the Act allows for the establishment of Tariff Concession Orders (TCOs) through which certain goods can be subject to a lower rate of duty. Specifically, the Act was introduced to address the gap where certain imported goods, which are not produced in Australia or for which no suitable Australian-made substitutes exist, may benefit from reduced customs duties to promote competitiveness and economic efficiency. The Tariff Concession Instrument No. 0510515 was enacted to provide tariff concessions for certain seamless line pipes, allowing for a duty-free rate in place of the general 5% duty, reflecting the policy objective of fostering a competitive domestic industry.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which an applicant has applied and, if approved, result in a lower rate of customs duty being imposed on those goods. The application process for a TCO requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby meeting the core criteria set out in the Act. Notably, certain goods specified in section 269SJ are ineligible for TCO consideration. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs duties. The instrument in question, TCO No. 0510515, pertains to seamless line pipes, which are now subject to a zero rate of duty, as opposed to the general rate of 5%, following a successful application by Woodside Energy Ltd. The commencement date of this TCO is the date of the application, 09 August 2005, and it does not disadvantage or impose liabilities on any person in respect of actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0510515, issued under section 269F of the Customs Act 1901 (the Act), pertains to a specific case where the Chief Executive Officer of Customs (the CEO) grants a Tariff Concession Order (TCO) for certain seamless line pipes. According to section 269P(3) of the Act, the CEO is required to make a written order declaring that these particular seamless line pipes are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a general duty rate of 5% reduced to free duty under this TCO. The CEO's decision to grant this TCO was based on the absence of substitutable goods produced in Australia, as mandated by section 269C of the Act.
The obligations imposed by this TCO on relevant parties are primarily concerned with ensuring compliance with the terms of the concession. Importers of the specified seamless line pipes must ensure that their goods meet the criteria outlined in the TCO to benefit from the reduced duty rate. The CEO's role involves verifying that the application for a TCO meets the core criteria and publishing a notice in the Gazette inviting submissions from any interested parties, as stipulated by subsection 269K(1) of the Act. In this case, the CEO did not receive any submissions opposing the TCO.
The Act does not specify particular offences or penalties for breaches related to TCOs. However, general legal obligations under the Customs Act 1901 would apply, including potential penalties for misrepresentation or fraudulent claims. While the TCO itself does not impose any new liabilities on individuals or entities, failure to comply with customs regulations could lead to civil or criminal consequences under other provisions of the Customs Act 1901, potentially including fines and imprisonment.
In summary, the Tariff Concession Instrument No. 0510515 provides specific relief by reducing the duty on certain seamless line pipes to zero, contingent on the absence of substitutable goods produced in Australia. The CEO's role in granting and overseeing this TCO is governed by specific criteria and procedural requirements, and while no submissions were received opposing this TCO, the rights of importers are positively affected, allowing them to apply for duty refunds.