EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516775
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 0516775 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. 0516775 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 Tariff Concession Instrument No. 0516775 was enacted in 2006 under the Customs Act 1901 to provide tariff concessions for certain goods, specifically addressing the issue of applying reduced customs duties to imported goods where no substitutable goods are produced in Australia. This instrument was introduced to facilitate trade by reducing the financial burden on importers of specific goods, thereby encouraging their importation and potentially stimulating economic activity. The instrument was developed and authorised by the Chief Executive Officer of Customs, in accordance with the legislative framework established by the Customs Act, which allows for the creation of Tariff Concession Orders under certain conditions. The overarching policy objective is to support Australian businesses by making imported goods more competitive, without disadvantaging existing producers or imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0516775 under the Customs Act 1901 applies to specific goods, in this case, certain weld test rings, and is relevant to the industry involved in their importation and use. The act allows for a lower rate of customs duty on these goods as specified in the Instrument, provided that the application for tariff concession meets certain core criteria. These criteria include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The geographic reach of the Act is national, impacting all importers and exporters of goods across Australia. The Act extends its application through subordinate instruments such as the Tariff Concession Orders, which provide specific details about the goods and the applicable duty rates. There are no stated exclusions or exemptions in this particular Instrument, and it does not disadvantage any person other than the Commonwealth by imposing liabilities for actions taken before its registration.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer (CEO) of Customs. Section 269F allows a person to apply for a TCO in respect of specific goods, provided that the application does not pertain to goods excluded under section 269SJ. If the application is deemed valid, the CEO must determine whether it meets the core criteria outlined in section 269C, which stipulates that no substitutable goods were produced in Australia at the time of application. Substitutable goods, defined under section 269D, are those that can replace the goods in question in terms of use or design.
The CEO is required to make a written order if satisfied that the application meets the core criteria, as per section 269P(3). This order specifies that the goods in question are subject to a prescribed rate in Schedule 4 of the Customs Tariff Act 1995. In this instance, TCO No. 0516775 was issued for certain weld test rings, reducing their duty rate from 5% to 0%. The CEO must also publish a notice in the Gazette inviting submissions on the application, although in this case, no submissions were received.
Compliance with the Act imposes certain obligations on the parties involved. The CEO must ensure that the application meets the core criteria and, if so, proceed to make the TCO. Importers, on the other hand, must be aware of the conditions under which the TCO applies and can benefit from it, such as applying for duty refunds on imports made since the TCO's effective date. The rights of third parties are protected, ensuring that the TCO does not disadvantage or impose liabilities on anyone except the Commonwealth.
The Act also delineates the consequences of non-compliance. While specific offences and penalties are not detailed in this instance, violations of the Customs Act can generally result in both civil and criminal penalties. Civil penalties may include fines up to a certain amount, while criminal penalties can lead to imprisonment, depending on the severity and nature of the breach. It is crucial for all parties to adhere to the Act's provisions to avoid these potential repercussions.