EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613388
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 applied for a TCO in respect of certain electric resistance welded casing on 11 August 2006.
Instrument
TCO No 0613388 was made on 03 November 2006. It declares that those certain electric resistance welded casing are goodsis a product 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. 0613388 is taken to have come into force on 11 August 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, enacted by the Australian Parliament, provides a framework for the imposition of customs duties on imported goods. To address specific economic needs and promote fair trade practices, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA. These orders enable the Chief Executive Officer of Customs to grant reduced customs duty rates on certain goods, provided specific criteria are met. One such concession was introduced via TCO No. 0613388, which was made on 3 November 2006 in response to an application by Woodside Energy for tariff relief on certain electric resistance welded casing. The policy objective is to facilitate the import of goods that are not produced domestically, thereby promoting competitive market conditions and supporting industries reliant on imported materials. This approach ensures that Australian businesses can access necessary materials at reduced costs, fostering economic growth and efficiency.
Scope and Application
The Customs Act 1901, as amended, encompasses a comprehensive framework for the regulation of customs and excise duties in Australia, and specifically, Part XVA provides for Tariff Concession Orders (TCOs) that can be applied for by any person to the Chief Executive Officer of Customs. The TCO process allows for the reduction or elimination of customs duty on certain goods if it is determined that there are no substitutable goods produced in Australia at the time of the application. The instrument in question, TCO No. 0613388, applies to certain electric resistance welded casing as designated by Woodside Energy, with the duty rate reduced from the general rate of 5% to free. This legislation applies on a Commonwealth level and its scope extends to any goods that meet the specified criteria of not having substitutable goods produced in Australia. The application of TCOs is further refined through subordinate instruments and regulations, ensuring a structured and methodical approach to granting tariff concessions. Notably, the Act ensures that the implementation of a TCO does not retroactively affect the rights of any person, thus protecting the interests of parties involved in transactions prior to the issuance of the TCO.
Key Provisions
The Tariff Concession Order No. 0613388 (section 269P(3)) operates to provide a tariff concession on certain electric resistance welded casing, as applied by the Customs Act 1901 (the Act). Specifically, this Order allows for the application of a zero duty rate on these goods, rather than the general 5% duty rate (section 269S(1)). This tariff concession was made after Woodside Energy submitted an application on 11 August 2006, and it came into force on the same day, as per subsection 269S(1) of the Act.
The key requirement for the concession is that, on the date of application, no substitutable goods were produced in Australia (section 269C). Substitutable goods are defined in section 269D as those produced in Australia that can be used in a manner similar to the goods for which the tariff concession is sought. The CEO of Customs must be satisfied that no such goods exist in Australia, which was the case for this application. Once this core criterion is met, the CEO is mandated to issue a written order (section 269P(3)). The CEO’s decision-making process also involves publishing a notice in the Gazette, inviting any interested parties to submit objections if they believe the tariff concession should not proceed (subsection 269K(1)). In this instance, no submissions were received.
Under the Act, the obligations of the CEO include verifying the application against the specified criteria and making a decision based on this verification. The CEO must also publish a notice in the Gazette, inviting objections from any interested parties (subsection 269K(1)). The CEO did not receive any submissions in response to the published notice for this application. Additionally, the Act ensures that the tariff concession does not adversely affect the rights of any person as at the date of registration and does not impose any liabilities on any person (subsection 269S(1)).
The Act does not specify any particular offences or penalties for breach of the provisions relating to Tariff Concession Orders. However, breaches of other sections of the Customs Act 1901 may result in penalties. For instance, offences under the Customs Act can incur penalties of up to $22,000 for individuals and $110,000 for corporations, as stipulated in section 247 of the Act. Additionally, section 248A imposes a penalty of 25 penalty units, which translates to approximately $5,250 at the time of writing, for each day an offence continues. These penalties underline the importance of compliance with the Act’s requirements.