EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513456
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.
BP Refinery (Bulwer Island) Limited applied for a TCO in respect of certain non-contacting seals on 4 October 2005.
Instrument
TCO No 0513456 was made on 23 December 2005. It declares that those certain non-contacting seals 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.0513456 is taken to have come into force on 4 October 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. 0513456 was enacted in 2005 under the Customs Act 1901 to address the need for providing tariff concessions on specific goods. This instrument, created by the Chief Executive Officer of Customs, applies to certain non-contacting seals, for which the general duty rate of 5% was reduced to free duty. The Customs Act 1901 provides the framework for such tariff concessions, and the CEO was mandated to assess applications against core criteria to determine eligibility. In this instance, BP Refinery (Bulwer Island) Limited's application was assessed and approved as no substitutable goods were produced in Australia. This legislative measure ensures that importers can benefit from reduced customs duty on these specified goods, effective from the date of the application, without imposing any liabilities on non-Commonwealth entities. The process involved public consultation, although no submissions were received in response to the published notice in the Gazette.
Scope and Application
The Tariff Concession Instrument No. 0513456 under the Customs Act 1901 applies to the specific goods identified as certain non-contacting seals, for which BP Refinery (Bulwer Island) Limited applied for a tariff concession order on 4 October 2005. The Act facilitates the application of a lower rate of customs duty to goods specified in a Tariff Concession Order (TCO) if the Chief Executive Officer of Customs determines that the application meets the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. This instrument was made on 23 December 2005, declaring that the certain non-contacting seals are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general rate of duty being 5% and the rate for these goods being free. The instrument's reach is national, applying across Australia, and it does not affect the rights of any person except to beneficially impact the rights of importers who may apply for a refund of duty on these goods imported since the TCO came into force on the application date. The CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received.
Key Provisions
The main operative sections of this legislation pertain to the process of applying for and obtaining Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). The key requirement for a TCO is that, on the day the application is lodged, no substitutable goods must be produced in Australia in the ordinary course of business (section 269C). If the Chief Executive Officer of Customs (CEO) is satisfied that this criterion is met, a TCO is made, declaring that the goods in question are subject to a prescribed rate of duty, which in this case is free (section 269P(3)). TCO No. 0513456, made on 23 December 2005, pertains specifically to certain non-contacting seals and specifies that these goods are to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed on the parties by this Act include the requirement for an applicant to ensure that their application for a TCO is made in accordance with the provisions of the Customs Act 1901, specifically ensuring that the application meets the core criteria stipulated in section 269C. The CEO is obligated to evaluate the application and, if satisfied, make a written order declaring the goods subject to a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made (subsection 269K(1)). The CEO in this case did not receive any submissions.
The Customs Act 1901 does not explicitly state any offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, the Act does ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). This means that the TCO is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The Act also ensures that the rights of importers will be beneficially affected, without imposing any liabilities on any person.