EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516776
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 0516776 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. 0516776 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, introduced a framework for Tariff Concession Orders (TCOs) to provide relief from customs duties for certain imported goods under specific circumstances. This Act aims to address the problem of ensuring that Australian industries remain competitive by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duties on goods that are not produced domestically, thus encouraging their importation. The Tariff Concession Instrument No. 0516776, made under this Act, is a practical application of this policy, granting a zero percent duty rate on certain weld test rings as of 8 December 2005, the date the application was lodged. This measure was introduced to benefit importers by reducing their duty obligations, without imposing any new liabilities or disadvantaging existing rights of any party other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) that provide reduced rates of customs duty on certain goods. The Act applies to any person or entity that may apply for a TCO in respect of goods, as long as the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO of Customs is responsible for deciding whether an application meets the core criteria, which is primarily based on whether substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The geographic and jurisdictional reach of the Act is national, as it operates under the Commonwealth of Australia. The Act may be extended or restricted through subordinate instruments, but the primary focus is on the application and processing of TCOs as outlined in the Act itself. The Explanatory Statement for Tariff Concession Instrument No. 0516776 clarifies that the TCO does not affect existing rights or impose liabilities on any person for actions taken before the TCO was registered, while importers may benefit from the duty reduction and apply for refunds on duties paid before the TCO's effective date.
Key Provisions
The Tariff Concession Order (TCO) No. 0516776, made under section 269F of the Customs Act 1901, applies a zero per cent duty rate to certain weld test rings, as opposed to the general rate of five per cent (s. 269P(3)). The order was made on 3 March 2006 by the Chief Executive Officer of Customs (CEO) after an application by Woodside Energy Ltd on 8 December 2005 (s. 269K(1)). The TCO is considered effective from 8 December 2005 (s. 269S(1)). This means that importers of these goods can now benefit from a reduced duty rate and may apply for a refund of duties paid on imports since that date (Reg. 126(1)(r)).
Under the Act, the CEO is required to assess whether a TCO application meets the core criteria as outlined in section 269C. Specifically, the CEO must determine if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s. 269C). The definitions of terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are provided in sections 269D, 269E, and 269F respectively. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO.
The Act imposes several obligations on the parties involved. Woodside Energy Ltd, as the applicant, must ensure that their application for a TCO is complete and meets the criteria set out in the Act. The CEO, on the other hand, is required to assess the application, publish a notice in the Gazette inviting submissions from interested parties, and decide on the application based on the provided information and any submissions received (s. 269K(1)). In this case, no submissions were received by the CEO, and the TCO was granted accordingly.
There are no specific offences or penalties mentioned in the Act or the Explanatory Statement for the failure to comply with the provisions of a TCO. However, general legal obligations and penalties applicable to breaches of the Customs Act 1901 may still apply. These can include fines and imprisonment for serious offences. The exact penalties would depend on the nature and severity of the breach, as well as the relevant provisions of the Customs Act and other applicable legislation.