EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516767
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 0516767 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. 0516767 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, introduced to address specific economic or industrial policy objectives, allow for the reduction or elimination of customs duties on certain goods under particular conditions. The legislation allows the Chief Executive Officer of Customs to make a TCO if an application is received and the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The objective of this mechanism is to support certain industries by reducing their costs without affecting the rights of other stakeholders or imposing new liabilities. TCO No 0516767, made in 2006 in response to an application from Woodside Energy Ltd, is an example of this process, providing a zero per cent duty rate on certain weld test rings previously subject to a 5% duty.
Scope and Application
The Customs Act 1901, through its Part XVA, outlines a scheme under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislation applies to persons or entities seeking a reduction in customs duty on specific goods through the application for a TCO. The Act applies nationally across Australia, as it is a Commonwealth Act. It specifically targets the importation of goods that meet certain criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. This criterion is pivotal in determining whether the application for a TCO can be approved by the CEO. In the instance of TCO No. 0516767, the CEO determined that no substitutable goods were produced in Australia for certain weld test rings, thereby approving the application and resulting in a zero percent duty rate for these goods. The Act ensures that the commencement of such orders aligns with the date of application, as seen in the case of TCO No. 0516767, which was taken to have commenced on 8 December 2005. The application of this Act is further extended through subordinate instruments, which may provide additional clarifications or specific details regarding the application and scope of TCOs.
Key Provisions
The Tariff Concession Instrument No. 0516767, which pertains to the Customs Act 1901, outlines the process and conditions under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Specifically, section 269F of the Act allows a person to apply for a TCO in respect of certain goods, provided those goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria set out in section 269C and that no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D and section 269E, then the CEO must issue a TCO. This order declares that the goods in question are subject to a lower rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. In the case of TCO No. 0516767, this order was made on 3 March 2006 and applies a 0% duty rate on certain weld test rings, which otherwise carry a 5% duty rate.
Entities and individuals subject to this Act must comply with the core criteria set out in section 269C to be eligible for a TCO. This involves ensuring that on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO has the responsibility of verifying this information and making a decision based on the evidence provided. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received. The TCO is deemed to have come into force on the date the application was lodged, which is 8 December 2005 for TCO No. 0516767, and it does not impose any liabilities or disadvantage any person other than the Commonwealth.
Failure to comply with the requirements outlined in the Act or any subsequent TCO could result in legal consequences. While the Explanatory Statement does not explicitly detail specific offences or penalties for breaches, the general legal framework suggests that non-compliance with customs regulations could lead to penalties under the Customs Act 1901 or other relevant legislation. These penalties may include fines and, in more severe cases, criminal charges. The exact penalties would depend on the nature and severity of the breach, but they could range from monetary fines to imprisonment. Importers, however, may benefit from the TCO by applying for a refund of duty on goods imported since the TCO came into force, as outlined in paragraph 126(1)(r) of the Regulations.