EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605446
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 valve actuators on 16 March 2006.
Instrument
TCO No 0605446 was made on 26 May 2006. It declares that those certain valve actuators 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 free.
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. 0605446 is taken to have come into force on 16 March 2006.
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 by the Australian Parliament to facilitate the regulation of customs and excise duties and provide a framework for the administration of these duties. The Act was introduced to address the need for a comprehensive legal structure governing the importation and exportation of goods, ensuring that the collection of customs duties is efficiently managed and that the movement of goods across borders is facilitated. Part XVA of the Customs Act 1901 specifically addresses Tariff Concession Orders (TCOs), which allow for the application of lower rates of customs duty on certain goods under specific conditions. The policy objective behind the introduction of TCOs is to support Australian industries by providing tariff relief on goods that cannot be substituted with domestically produced alternatives, thereby encouraging economic growth and competitiveness.
Scope and Application
The Customs Act 1901, as amended and applied through Tariff Concession Orders (TCOs), provides a mechanism whereby the Chief Executive Officer of Customs can grant concessions that reduce or eliminate customs duty on certain imported goods. Specifically, this Act applies to any person or entity who imports goods into Australia and seeks to benefit from a lower rate of duty. The TCO scheme under Part XVA of the Act enables the CEO to grant such concessions provided the goods in question are not specified in section 269SJ as ineligible, and no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it applies to all imports into Australia. Any exclusions are explicitly stated in section 269SJ, which lists the goods that cannot be subject to a TCO. The Act allows for the scope of the concessions to be further defined and extended through subordinate instruments, which can specify additional conditions or categories of goods. This particular TCO, No. 0605446, applies to certain valve actuators, reducing their customs duty rate from 5% to free, effective from the date of the application on 16 March 2006.
Key Provisions
The main operative sections of this legislation are Sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C sets out the core criteria that an application for a Tariff Concession Order (TCO) must meet, specifically that on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the Chief Executive Officer of Customs (the CEO) to make a written TCO if the application meets the core criteria, declaring that the goods are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995. Section 269S specifies that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations on the parties involved. The applicant, such as Woodside Energy Ltd, must submit an application to the CEO that includes sufficient details to meet the core criteria outlined in Section 269C. The CEO has the responsibility to assess whether the application meets these criteria and, if satisfied, to make the TCO as per Section 269P(3). The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who may object to the making of the TCO, in line with Subsection 269K(1). Additionally, the CEO must ensure that the TCO does not adversely affect any person’s rights as at the date of registration, as stipulated in Subsection 269S(1).
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties for non-compliance with the provisions related to TCOs. However, any failure to meet the requirements set out in the Act, such as improper application or misrepresentation of facts, could potentially lead to administrative reviews, penalties under other sections of the Customs Act 1901, or legal action if it is found that the TCO was improperly obtained. While the specific penalties are not detailed in the explanatory statement, they could include fines or other sanctions as determined by the relevant authorities.