EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516768
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 0516768 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. 0516768 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. 0516768, enacted in 2006, addresses the need for a streamlined process to grant tariff concessions on specific goods under the Customs Act 1901. This instrument was introduced by the Commonwealth Parliament to facilitate the application for and approval of Tariff Concession Orders (TCOs) which provide a lower rate of customs duty for particular goods. The primary policy objective of this instrument is to encourage the importation of goods that are not produced domestically, thereby supporting industries that rely on imported materials. The instrument ensures that the application process is transparent and allows for public consultation, as mandated by the Act, although in this instance, no submissions were received against the application. The instrument provides beneficial tariff adjustments for importers of specified goods, effective from the date the application was lodged, without imposing any new liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the issuance of Tariff Concession Orders (TCOs) which apply to goods that are subject to a lower rate of customs duty than what is generally prescribed. The Act applies to individuals and entities that seek to benefit from a tariff concession for goods they import. The geographic reach of this legislation is national, as it applies to all goods imported into Australia, and the concessions are determined by the Chief Executive Officer of Customs (CEO). Applications for a TCO must not pertain to goods specified in section 269SJ of the Act, which excludes certain types of goods from eligibility for a concession. The CEO's decision to grant a TCO is contingent on satisfying the core criteria outlined in the Act, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act allows for the CEO to make TCOs through subordinate instruments, thus extending its application to specific goods as determined on a case-by-case basis.
Key Provisions
The Tariff Concession Order No. 0516768, established under section 269F of the Customs Act 1901, sets forth specific conditions under which certain weld test rings are eligible for a tariff concession. This means that these goods are subject to a reduced customs duty rate, which is a benefit for those who import these items. Section 269C stipulates that the application for a tariff concession order will meet the core criteria if, at the time of application, there are no substitutable goods produced in Australia in the ordinary course of business. This is further clarified by section 269D, which defines what is meant by goods produced in Australia, and section 269E, which defines ordinary course of business. According to subsection 269P(3), if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order, or tariff concession order, is issued.
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for an application to be submitted by a person to the CEO for a tariff concession order in respect of specified goods, as outlined in section 269F. The CEO must then determine whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application is valid, they must make a written order that declares the goods to which the tariff concession applies. Section 269K(1) further requires that the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe there are reasons why the tariff concession should not be made. In this case, the CEO did not receive any submissions.
Section 269S(1) of the Act outlines that a tariff concession order is considered to have come into force on the day the application for the order was lodged. Therefore, Tariff Concession Order No. 0516768 is deemed to have commenced on 8 December 2005. Additionally, this order does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the date of registration. Importers of the affected goods can benefit from this order by applying for a refund of duty on goods imported since the order came into force, as provided under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 also stipulates penalties and consequences for breaches. While the Explanatory Statement does not specify the exact nature of these penalties, it is known that breaches of the Act can lead to civil and criminal consequences. The maximum penalties can vary depending on the nature and severity of the breach. For instance, civil penalties may include fines, while criminal penalties could involve imprisonment. However, specific details regarding these penalties are not provided in the explanatory statement, and one would need to refer to the full text of the Act or relevant case law for precise information.