EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516772
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 0516772 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. 0516772 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, provides for the regulation of customs and excise, including the imposition of duties and the facilitation of trade. The Act established a framework for Tariff Concession Orders (TCO), which offer reduced customs duties on specified goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0516772, issued under the authority of the Customs Act, aims to address the problem of ensuring that Australian industries remain competitive by reducing the duty on certain imported goods where there are no domestic alternatives. This particular TCO, effective from 8 December 2005, pertains to certain weld test rings, reducing their duty from 5% to 0% as determined by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia in the ordinary course of business. The policy objective of this measure is to support the importer’s rights and promote fair trade practices without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0516772 under the Customs Act 1901 applies to the specific case of certain weld test rings for which Woodside Energy Ltd submitted an application. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which reduce the rate of customs duty on specified goods. The TCO applies only to goods for which the application criteria are met, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies throughout Australia, with the TCO affecting the importation duties on the specified goods. Any person can apply for a TCO, but certain goods as outlined in section 269SJ of the Act are excluded from this concession. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which details the prescribed duty rates and schedules. The commencement of the TCO is effective from the date the application was lodged, without imposing any liabilities or affecting pre-existing rights of any party other than the Commonwealth.
Key Provisions
The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) through section 269F, which enables an application to the Chief Executive Officer (CEO) of Customs. Once an application is submitted and deemed valid under section 269SJ, the CEO must determine if the core criteria set out in section 269C are met. Specifically, section 269C requires that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. For these purposes, section 269D defines 'goods produced in Australia', section 269E defines 'ordinary course of business', and section 269D again defines'substitutable goods', which are goods produced in Australia that could serve the same use as the goods in question. If the CEO is satisfied that the application meets these criteria, a TCO must be made under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed by the Act on the CEO include ensuring that any TCO application is reviewed against the core criteria and that a TCO is made if these criteria are met. The CEO is also required to publish a notice in the Gazette under subsection 269K(1) as soon as practicable after accepting an application as valid, inviting any interested parties to submit objections. In this case, no objections were received in response to the notice. Additionally, the Act mandates that a TCO comes into force on the date the application is lodged, as specified in subsection 269S(1). The TCO does not affect any rights or impose liabilities on persons other than the Commonwealth in respect of actions taken before the TCO registration date.
Breach of the requirements set out in the Customs Act 1901 could result in various civil or criminal consequences. For instance, if an application for a TCO is found to be invalid or if the CEO fails to comply with the statutory obligations, this could lead to legal action. The Act does not explicitly outline specific offences or penalties for such breaches, but general provisions within the Customs Act and associated regulations may apply. These could include fines or other penalties as prescribed under relevant sections of the Customs Act, which may vary depending on the nature and severity of the breach.