EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511817
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 Weld Test Rings on 7 September 2005.
Instrument
TCO No 05111817 was made on 16 January 2006. It declares that those certain Weld Test Rings 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. 0511817 is taken to have come into force on 7 September 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 by the Australian Parliament to establish a framework for managing customs duties and other charges on goods entering or leaving Australia. The Act provides for the imposition of customs duty on imported goods and the refund or remission of duty under certain circumstances. The Tariff Concession Instrument No. 05111817 was introduced to address the issue of tariff concessions for specific goods, providing a mechanism for the Chief Executive Officer of Customs to grant lower rates of customs duty where appropriate. The policy objective behind this legislation is to support Australian industries by reducing the cost of imported goods that have no local substitutes, thereby encouraging domestic production and consumption of such goods.
The Tariff Concession Order (TCO) No. 05111817 was made on 16 January 2006 for certain Weld Test Rings, following an application by Woodside Energy Ltd. The CEO determined that the goods in question did not have substitutable goods produced in Australia, thus meeting the core criteria for a tariff concession. The order reduces the duty on these goods from 5% to 0%, effective from the date of the application, 7 September 2005. This concession is expected to benefit importers by potentially reducing their costs and increasing their competitiveness. The order does not impose any new liabilities on individuals or entities other than the Commonwealth and does not disadvantage anyone who had rights as of the registration date.
Scope and Application
The Tariff Concession Instrument No. 0511817 under the Customs Act 1901 applies to the specific goods—certain Weld Test Rings—submitted by Woodside Energy Ltd for tariff concession. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet the core criteria outlined in the legislation, including the absence of substitutable goods produced in Australia. This particular TCO, effective from the date of the application on 7 September 2005, reduces the duty on the specified Weld Test Rings from the general rate of 5% to 0%. The application of this TCO does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth, though it does benefit importers by potentially allowing them to claim a refund for duties paid on the goods since the TCO's effective date. The Act's reach is national, and its application can be extended or clarified through subordinate instruments, although this specific TCO does not indicate any such extensions or restrictions.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ (269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, 269SJ). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, and the goods are not specified in section 269SJ, a TCO will be issued. This process ensures that the goods for which the TCO is made do not have substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269B and 269E.
The Act imposes specific obligations on the parties involved in the TCO process. For instance, an applicant must ensure that their application complies with the criteria outlined in section 269C and is not in respect of goods specified in section 269SJ. The CEO, on the other hand, must evaluate the application to determine if it meets the core criteria and, if so, issue a TCO. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. This ensures transparency and provides an opportunity for public input.
Breach of the provisions outlined in the Customs Act 1901 can result in various consequences. While the Act does not explicitly state penalties for non-compliance with the TCO provisions, it is understood that any misuse of the concessions could lead to civil or criminal actions. For example, if a person knowingly imports goods that should have a higher tariff rate but has been granted a TCO, they could face penalties under other sections of the Customs Act, which could include fines or imprisonment. The specific penalties would depend on the nature and extent of the breach.
In summary, the Customs Act 1901 provides a framework for the issuance of Tariff Concession Orders through the CEO, with specific criteria and obligations to ensure fair application. While the Act does not detail specific penalties for TCO breaches, general provisions within the Act and related legislation could apply to those who misuse the concessions, leading to potential civil or criminal consequences.