EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516609
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 freefall lifeboats on 25 November 2005.
Instrument
TCO No 0516609 was made on 6 February 2006. It declares that the certain freefall lifeboats are good 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. 0516609 is taken to have come into force on 25 November 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 Parliament of Australia, provides a framework for the administration of customs duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA of the Act. This legislative instrument addresses the gap by enabling the reduction or exemption of customs duties on specified goods, provided certain criteria are met. Specifically, a TCO can be issued if the goods in question are not produced in Australia in the ordinary course of business and no substitutable goods exist domestically. The primary policy objective is to facilitate the importation of goods that are not manufactured locally, thereby promoting trade and potentially lowering costs for importers and consumers. The Tariff Concession Instrument No. 0516609, enacted on 6 February 2006, exemplifies this process by granting a tariff concession to Woodside Energy Ltd for certain freefall lifeboats, setting their duty rate to free, which was the general rate prior to the concession.
Scope and Application
The Tariff Concession Instrument No. 0516609 under the Customs Act 1901 applies to goods specified in the instrument, in this case, certain freefall lifeboats, which are eligible for a lower rate of customs duty. This concession is applicable to Woodside Energy Ltd, the entity that applied for the Tariff Concession Order (TCO), and to any other importers of these specific goods. The application of the Act is national in scope, given its foundation under Commonwealth legislation. The instrument specifies that the general rate of duty on these goods is 5%, but under the TCO, the rate is reduced to free, effective from the date the application was lodged, which was 25 November 2005. The Act does not specify exclusions or exemptions for the particular goods in question but does exclude certain goods from the TCO scheme altogether, as outlined in section 269SJ of the Act. The CEO of Customs must ensure that no substitutable goods were produced in Australia on the date of application to meet the core criteria for a TCO, as per sections 269C and 269D of the Act. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, as per subsection 269S(1) of the Act. The instrument is supported by the Customs Tariff Act 1995 and its subordinate regulations, which provide further detail on the application and administration of the TCO.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) (s 269F). A TCO allows for a lower rate of customs duty on certain goods. If an applicant submits a request for a TCO, the CEO must determine if it complies with the core criteria set out in the Act (s 269C). For the application to meet these criteria, no substitutable goods must have been produced in Australia in the ordinary course of business on the day the application was submitted (s 269C). If the CEO is satisfied that the application meets the core criteria, they are required to issue a written order, a TCO, declaring that the goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (the Tariff) (s 269P(3)).
In this instance, TCO No 0516609 was issued on 6 February 2006 for certain freefall lifeboats (s 269S(1)). The CEO made this decision after being satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria. The TCO specifies that these lifeboats are subject to item 50 of Schedule 4 of the Tariff, resulting in a duty rate of free, down from the general rate of 5% (s 269P(3)). The TCO does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth as at the date of registration (s 269S(1)).
The CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This must be done as soon as practicable after accepting a TCO application as valid (s 269K(1)). In this case, no submissions were received in response to the notice published by the CEO. The TCO is taken to have come into force on the date the application for the TCO was lodged, which in this case was 25 November 2005 (s 269S(1)). The rights of importers will be beneficially affected as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Reg 126(1)(r)).
The Act does not specify any offences, penalties, or consequences for failure to comply with the provisions regarding TCOs. However, any breach of the Customs Act 1901 or the Customs Regulations 1993 could result in civil or criminal penalties. For example, knowingly or recklessly making a false statement in a customs document could lead to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both (s 246AC). Additionally, failure to comply with the Act or Regulations could result in the imposition of fines, the seizure of goods, or other enforcement actions by Customs.