EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516769
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 0516769 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. 0516769 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties in Australia. The Act introduced the scheme for Tariff Concession Orders (TCOs) to address the need for reducing customs duties on certain goods under specific circumstances, aiming to support industries by lowering the cost of importing necessary goods. The policy objective is to encourage the development of local industries by ensuring that goods that cannot be produced domestically are subject to lower customs duties. In the case of Tariff Concession Instrument No. 0516769, the Chief Executive Officer of Customs determined that certain weld test rings, for which Woodside Energy Ltd applied for a concession, could benefit from a reduced duty rate due to the absence of domestic production, thereby fostering a competitive environment and potentially stimulating local production in the future.
Scope and Application
The Tariff Concession Instrument No. 0516769, established under Part XVA of the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. This instrument allows the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that provides a lower rate of customs duty on goods not produced in Australia, provided the application meets the core criteria outlined in the Act. The geographic reach of this legislation is national, as it applies across all states and territories of Australia, impacting the importation of goods into the country. The instrument came into effect on the day the application was lodged, 8 December 2005, and does not impose any liabilities on persons other than the Commonwealth nor affect their rights prior to the date of registration. This Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed rates of duty applicable to the goods in question.
Key Provisions
The primary operative sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) include sections 269C (269C), 269B, 269D, 269E, 269F, and 269P. These sections outline the criteria for applying for a TCO, the definition of "substitutable goods," and the process for making a TCO if the application meets the criteria. Specifically, section 269F allows an applicant to seek a TCO for certain goods, while section 269C mandates that the Chief Executive Officer of Customs (CEO) must make a TCO if no substitutable goods are produced in Australia on the date the application is lodged.
The Act imposes several obligations on the parties involved. The applicant, such as Woodside Energy Ltd in this case, must ensure that their application for a TCO is valid and meets the criteria specified in section 269C (269C). Once an application is accepted, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. The CEO must also decide whether the application meets the core criteria based on the definitions provided in sections 269B, 269D, and 269E. If the CEO is satisfied that the application meets the criteria, they must make a written TCO order specifying the applicable tariff item.
Failure to comply with the provisions of the Customs Act 1901 or the regulations could lead to various civil or criminal consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of customs legislation generally can result in substantial fines, imprisonment, or both. The exact penalties would depend on the nature and severity of the breach, but they could include fines of up to $22,200 per offence for individuals and significantly higher amounts for corporations, as well as potential imprisonment terms.
Overall, TCO No. 0516769 effectively reduces the customs duty on certain weld test rings from 5% to 0%, effective from 8 December 2005, the date the application was lodged. This reduction benefits importers who can apply for a refund of duty on goods imported since that date under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth.