EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516773
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 0516773 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. 0516773 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 Australian Parliament, facilitates the implementation of Tariff Concession Orders (TCOs) to provide tariff reductions on specific goods. This mechanism was introduced to address the need for targeted customs duty reductions to support certain industries by making imported goods more competitive with locally produced alternatives. The Tariff Concession Instrument No. 0516773, issued under this Act, aims to provide a zero percent customs duty on certain weld test rings, as no substitutable goods were produced in Australia at the time of the application. This policy objective is to encourage the importation of these goods, thereby benefiting importers and potentially the broader industry by reducing costs associated with customs duties.
Scope and Application
The Tariff Concession Instrument No. 0516773 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been issued. In this instance, the TCO applies to certain weld test rings, and it is issued by the Chief Executive Officer of Customs (CEO) upon application and subject to meeting the core criteria as outlined in the Act. This particular TCO was issued in response to an application by Woodside Energy Ltd on 8 December 2005, and it became effective on the same date. The geographic reach of the Act and the TCO is national, applying across Australia as a Commonwealth initiative. The TCO does not apply to goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and it does not impose any liabilities or disadvantage any person other than the Commonwealth, thereby ensuring that the rights of importers are beneficially affected. The TCO can be extended or restricted through subordinate instruments, although this specific TCO does not appear to rely on any additional legislative measures.
Key Provisions
The Tariff Concession Order (TCO) No. 0516773 under the Customs Act 1901 (section 269F) provides a mechanism for reducing customs duty on specific goods, in this case, certain weld test rings. The main operative sections, notably sections 269C and 269P, establish the criteria for a TCO, which requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The CEO must make a written order if these conditions are met, as was the case with this TCO for the weld test rings, which now have a duty rate of 0% instead of the general rate of 5% (section 269P(3)).
The obligations imposed by this Act on the parties, particularly the CEO, include assessing whether a TCO application meets the specified criteria and publishing a notice in the Gazette inviting objections if any exist. In this instance, the CEO was satisfied that the application met the criteria and no objections were received, leading to the issuance of TCO No. 0516773 (subsection 269K(1)). The CEO also ensures that the TCO does not retroactively affect the rights of any person, except the Commonwealth, or impose any liabilities prior to the TCO's effective date (subsection 269S(1)).
In terms of penalties and consequences for breach, the Act does not explicitly outline specific offences or penalties for failing to comply with a TCO. However, any breach of the Customs Act 1901 may lead to civil or criminal consequences, depending on the nature and severity of the breach. Penalties can range from fines to imprisonment, as governed by the broader framework of the Customs Act and associated regulations. For instance, any misrepresentation or fraudulent activity in applying for or utilising a TCO could attract significant penalties under the general provisions of the Customs Act.