EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516766
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 8 December 2005.
Instrument
TCO No 0516766 was made on 3 March 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. 0516766 is taken to have come into force on 8 December 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. 0516766, made under the Customs Act 1901, was enacted in 2006 to provide tariff concessions for specific goods that were previously subject to a customs duty rate. The problem this legislation sought to address was the potential economic disadvantage faced by businesses that relied on importing goods for which no Australian-made substitutes existed, thereby encouraging the importation of these goods at a reduced duty rate. The instrument was developed in response to an application by Woodside Energy Ltd for tariff concessions on certain weld test rings, which were granted as no substitutable goods were produced in Australia at the time. The Tariff Concession Order (TCO) reduces the duty rate on these goods from 5% to 0%, effective from the date of application, 8 December 2005. The policy objective of this legislation is to support the competitiveness of Australian businesses by allowing the importation of goods at a concessional duty rate, thereby facilitating the efficient operation of industries that rely on such imported items.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which apply a lower rate of customs duty on certain goods. This process is applicable to any person or entity seeking tariff concessions for goods not specified in section 269SJ of the Act, which lists goods ineligible for such concessions. The Act applies to the Commonwealth jurisdiction, and its reach is national, as it pertains to customs duties across Australia. The application for a TCO must meet core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act provides for the CEO to consult and publish notices regarding TCO applications in the Gazette, inviting submissions from any interested parties, although no submissions were received for TCO No. 0516766. The TCO itself does not retroactively affect the rights of any person, ensuring that no pre-existing rights are disadvantaged or new liabilities imposed on anyone other than the Commonwealth. The concession provided by the TCO benefits importers who can apply for duty refunds on imports since the effective date of the order.
Key Provisions
The primary sections of this legislation (sections 269C, 269B, 269D, 269E, 269P, and 269S) outline the process and criteria for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D). The terms 'ordinary course of business' (section 269E) and'substitutable goods' (section 269F) are defined in the Act, clarifying what constitutes a valid application. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (section 269P(3)). This order declares that the specified goods are subject to a lower rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995. In the specific case of TCO No. 0516766, certain weld test rings are subject to a duty rate of 0% instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO of Customs is required to determine whether an application for a TCO meets the core criteria and, if so, to issue a written order. The applicant must ensure their application complies with the requirements, including providing all necessary information to substantiate that no substitutable goods were produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received, and the TCO was issued without opposition. The rights of any person other than the Commonwealth are protected from being disadvantaged by the TCO, and no liabilities are imposed on any person by the TCO.
Breach of the obligations or requirements set out in the Customs Act 1901 can result in penalties. The Act does not specify maximum penalties but outlines that failure to comply with the terms of the TCO or any related obligations can lead to civil or criminal consequences. These may include fines, imprisonment, or both, depending on the severity and intent of the breach. The exact penalties would be determined by the courts, taking into account the specific circumstances of the case. Additionally, any misrepresentation or false information provided in the application process could also lead to legal action under relevant legislation.