EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514782
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.
Schlumberger Oilfield Australia Pty Ltd applied for a TCO in respect of certain Separators on 20 October 2005.
Instrument
TCO No 0514782 was made on 16 January 2006. It declares that those certain Separators 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. 0514782 is taken to have come into force on 20 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. 0514782, enacted in 2006, is an instrument under the Customs Act 1901, designed to address the need for tariff concessions for specific goods. This Act, overseen by the Parliament of Australia, aims to facilitate trade by allowing for reduced customs duty rates on goods that are not produced in Australia and for which there are no substitutable domestic products. The instrument in question was introduced following an application by Schlumberger Oilfield Australia Pty Ltd for tariff concessions on certain Separators, which resulted in a concession reducing the duty rate from 5% to 0%. The process for enacting this instrument involved satisfying core criteria, including publication of the application in the Gazette to allow for public consultation, none of which received any submissions opposing the concession. The tariff concession took effect from the date the application was lodged, thereby ensuring that the rights of importers are protected and potentially benefiting them through duty refunds for goods imported since the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0514782 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions on goods imported into Australia, with the application being processed by the Chief Executive Officer of Customs. The legislation targets specific goods, such as the Separators applied for by Schlumberger Oilfield Australia Pty Ltd, which are not produced in Australia and thus qualify for a lower customs duty rate. The Act's application is national in scope, as it is a Commonwealth Act. The exclusions specified in section 269SJ of the Act outline the types of goods that cannot be subject to a tariff concession order, and these are the primary exclusions from the application of this legislation. Additionally, the Act allows for further clarification and extension of its application through subordinate instruments such as regulations.
Key Provisions
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs (sections 269C and 269F). A TCO allows for a reduced rate of customs duty on specified goods, provided certain criteria are met. Specifically, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. "Substitutable goods" are defined in section 269D as goods produced in Australia that could be used in place of the goods in question, considering their design and uses (section 269B).
The obligations imposed on parties by the Act include ensuring that any goods for which a TCO is sought are not substitutable by goods produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties when a TCO application is accepted as valid (subsection 269K(1)). In this instance, Schlumberger Oilfield Australia Pty Ltd applied for a TCO for certain Separators, and no submissions opposing the TCO were received.
The Act does not specify particular offences or penalties for breaches related to the TCO process itself. However, the Act does provide for potential legal actions regarding the application and enforcement of TCOs. If a TCO is not correctly applied or if there is an improper designation of goods, it could lead to disputes that might be addressed through civil or administrative processes. The absence of specific penalties in the Act implies that any breaches would be subject to the broader legal remedies available under the Customs Act 1901 and associated regulations.