EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516770
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 0516770 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. 0516770 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 Parliament of Australia, establishes a framework for the administration of customs and excise, including provisions for Tariff Concession Orders (TCOs). TCOs provide a lower rate of customs duty on specified goods, facilitating trade by reducing costs for importers. In particular, section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for such concessions, subject to criteria outlined in sections 269C and 269SJ. The Tariff Concession Instrument No. 0516770, made on 3 March 2006, was introduced to address Woodside Energy Ltd's application for a TCO concerning certain weld test rings, granted due to the absence of substitutable goods produced in Australia. This concession reduces the duty rate on these goods from 5% to 0%, effective from the date of application, 8 December 2005. The instrument ensures that the rights of importers are protected and potentially benefits them by allowing duty refunds for imports since the concession's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that may be eligible for a lower rate of customs duty as per a TCO. The Act is of Commonwealth jurisdiction, meaning it applies across Australia uniformly. The primary exclusion outlined in the Act pertains to goods specified in section 269SJ, which are ineligible for a TCO. The process involves an application to the CEO, which must meet the core criteria set out in section 269C, ensuring that no substitutable goods are produced in Australia. This Act's scope extends through subordinate instruments such as the Customs Tariff Act 1995, which details the applicable duty rates. The application and approval process involves public notice and consultation as mandated by section 269K(1) of the Customs Act 1901. The TCO does not retroactively affect any existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, and 269P of the Customs Act 1901, which outline the criteria for making a Tariff Concession Order (TCO) (section 269C). According to section 269C, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are essential terms for determining eligibility for a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a prescribed tariff item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Customs Act 1901 imposes several obligations and requirements on the parties involved. Firstly, any person who wishes to apply for a TCO must do so in accordance with section 269F. The CEO must then assess whether the application meets the core criteria as outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they are obligated to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions, which indicates compliance with the procedural requirement.
The legislation also outlines the consequences for breaches or non-compliance. While the explanatory statement does not detail specific offences, the Customs Act 1901 generally provides for both civil and criminal penalties for breaches related to customs duties and regulations. These may include fines, imprisonment, or both, depending on the severity of the offence. The exact penalties would be determined in accordance with the relevant sections of the Customs Act 1901 and any subsidiary legislation. In this specific case, however, the focus is on the issuance of the TCO and the tariff concession it provides, rather than on penalties for non-compliance.