EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516771
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 0516771 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. 0516771 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, as amended, addresses the issue of providing tariff concessions to importers of specific goods where such goods are not produced in Australia. This Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. Enacted by the Parliament of Australia, the primary objective of this legislative framework is to facilitate trade by reducing the duty burden on imported goods that have no locally produced alternatives, thereby promoting economic efficiency and competitiveness. The Tariff Concession Instrument No. 0516771, issued in 2006, is an example of this mechanism in action, as it provided a zero percent duty rate on certain weld test rings, recognising that no substitutable goods were produced in Australia. This approach ensures that importers are not disadvantaged and can benefit from duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0516771 under the Customs Act 1901 applies specifically to goods that are the subject of an application for a Tariff Concession Order (TCO). The Act facilitates a scheme where the Chief Executive Officer of Customs (CEO) can grant concessions on customs duty rates for specified goods, provided certain criteria are met. The scope of the legislation encompasses both natural and legal persons who may apply for a TCO, with the condition that the goods in question are not specified in section 269SJ of the Act, which lists those goods ineligible for tariff concessions. The Act applies to any industry that may benefit from such concessions, particularly those importing or intending to import goods that could qualify under the TCO scheme. The geographic reach of the Act is national, as it operates under the Commonwealth’s jurisdiction, affecting all states and territories in Australia. The Act includes a provision for the CEO to make written orders specifying the application of a lower duty rate on goods that meet the criteria, as demonstrated in the case of TCO No. 0516771 for certain weld test rings. Any exclusions or thresholds are determined by the criteria outlined in sections 269C, 269D, 269E, and 269SJ of the Act, ensuring that substitutable goods must not be produced in Australia in the ordinary course of business. The application of the Act may be further extended or restricted through subordinate instruments, which could detail additional conditions or specify particular goods or industries.
Key Provisions
The primary sections of the Customs Act 1901 governing Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C outlines the core criteria that an application must meet for the CEO to consider it valid, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO must make a written order (section 269P(3)), declaring that the goods are subject to a lower rate of customs duty. This concession was applied to certain weld test rings, as evidenced in TCO No. 0516771, which specifies that these goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of 0%.
The obligations imposed on the parties under this legislation are primarily on the applicant and the CEO. The applicant must ensure their application for a TCO complies with the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia, which is a key determinant in the CEO's decision-making process. Once an application is deemed valid, the CEO is obligated to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections or submissions. The CEO must consider any such submissions before making a final decision on the TCO application. In the case of TCO No. 0516771, no submissions were received, facilitating a straightforward approval process.
Any failure to comply with the requirements set out in the Customs Act 1901 may result in civil or criminal consequences. Although specific offences and penalties are not detailed in the Explanatory Statement, it is understood that breaches of the Act could lead to penalties under other sections of the Customs Act or related legislation. These could include fines or imprisonment, depending on the severity and intent of the breach. The specific penalties would be determined based on the nature of the offence and any applicable legal precedents or statutory provisions. The Act ensures that non-compliance is met with appropriate repercussions to maintain the integrity of the customs duty system.