EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516774
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 0516774 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. 0516774 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 was enacted to regulate the import and export of goods in Australia, providing the framework for the imposition of customs duties and other charges. The Act was introduced to address the need for a comprehensive system governing the customs process, ensuring both revenue collection and the facilitation of trade. In 2006, the Tariff Concession Instrument No. 0516774 was created under the Customs Act 1901 to provide specific tariff concessions for certain goods. This instrument was designed to alleviate the financial burden on businesses by reducing customs duties on particular items, thereby enhancing their competitiveness. The instrument was developed by the Chief Executive Officer of Customs and aims to meet the core criteria established by the Act, ensuring that no substitutable goods are produced in Australia at the time of the application. The instrument's introduction was accompanied by a publication in the Gazette inviting public submissions, though none were received in response to this particular concession.
Scope and Application
The Tariff Concession Instrument No. 0516774 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods, allowing for a lower rate of customs duty as outlined in the Customs Tariff Act 1995. This particular instrument pertains to the application made by Woodside Energy Ltd for certain weld test rings, where the Customs Act's core criteria were satisfied by the Chief Executive Officer of Customs, leading to the issuance of a Tariff Concession Order (TCO). The geographic and jurisdictional reach of this Act is national, as it operates within the framework of Australian federal law. The TCO exempts the specified goods from the general rate of duty, which is 5%, reducing it to 0% instead. The application of the TCO is effective from the date the application was lodged, in this case, 8 December 2005, and does not retroactively affect any pre-existing rights or liabilities of persons other than the Commonwealth. Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this instance, no submissions were received.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0516774, are sections 269C, 269P, and 269S. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P outlines that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. Section 269S specifies that a TCO is taken to have come into force on the day the application for the TCO was lodged.
Under this Act, the CEO has the obligation to review any TCO application to determine if it meets the core criteria as outlined in section 269C. If the application meets these criteria, the CEO must issue a TCO as per section 269P, and also publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission, as per subsection 269K(1). Additionally, the CEO must ensure that the TCO does not affect the rights of any person as at the date of registration, so as not to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration.
If any party breaches the provisions of this Act, they may be subject to various civil or criminal consequences. For example, if an entity falsely claims that no substitutable goods were produced in Australia to qualify for a TCO, they may be liable under the relevant sections of the Customs Act 1901. Although the specific penalties for breaches are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include fines and imprisonment, with the severity depending on the nature and extent of the breach.