EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613957
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.
Dowell Schlumberger applied for a TCO in respect of certain oil well cement fluid loss additive on 22 August 2006.
Instrument
TCO No 0613957 was made on 17 November 2006. It declares that those certain oil well cement fluid loss additive 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. 0613957 is taken to have come into force on 22 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, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This framework is designed to provide tariff concessions on certain goods, effectively reducing or eliminating customs duty for specified items. The instrument in question, Tariff Concession Instrument No. 0613957, was introduced to address the specific need for tariff concessions on certain oil well cement fluid loss additives, as requested by Dowell Schlumberger. By declaring that these additives are subject to a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, the instrument aims to meet the core criteria set forth in the Customs Act, ensuring that no substitutable goods were produced in Australia at the time of application. This legislative measure not only facilitates the importation of these goods but also aligns with the policy objective of promoting trade efficiency and competitiveness by reducing the cost burden on importers.
Scope and Application
The Tariff Concession Instrument No. 0613957 under the Customs Act 1901 applies to specific goods, in this case, certain oil well cement fluid loss additives, and is relevant to any entity or individual importing these goods into Australia. The instrument provides a concession on the rate of customs duty, reducing it from the general 5% to 0% for these goods, which were subject to an application for tariff concession made by Dowell Schlumberger on 22 August 2006. The instrument is effective from the date of the application, and it does not affect the rights of any person, including the Commonwealth, as at the date of registration. The geographic scope of the Act is national, applying across Australia, as it falls under the Commonwealth’s legislative jurisdiction. The Act excludes certain goods from being subject to a tariff concession as per section 269SJ of the Act. The application of the Act can be extended or restricted through subordinate instruments, although this specific instrument does not elaborate on such provisions.
Key Provisions
The main operative sections of this legislation involve the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F (1) allows for the application of a TCO, while section 269C (1) stipulates the core criteria that the application must meet. Section 269P(3) mandates that if these criteria are met, the CEO must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, TCO No. 0613957 was issued for certain oil well cement fluid loss additives, reducing the duty from 5% to 0%.
The Act imposes several obligations on the parties involved. The CEO is required to assess whether an application for a TCO meets the core criteria outlined in section 269C (1), which includes ensuring that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid (subsection 269K(1)). Additionally, the Act ensures that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force.
There are no explicit offences or penalties mentioned in the text regarding the breach of the TCO or the Act's provisions. However, any failure to comply with the obligations set out in the Act, such as not adhering to the core criteria for issuing a TCO or not publishing a notice in the Gazette, could potentially lead to legal consequences. The specific penalties for such breaches would need to be determined based on other relevant sections of the Customs Act 1901 and associated regulations, though these are not detailed in the provided text.