EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617294
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 workover control systems on 15 September 2006.
Instrument
TCO No 0617294 was made on 8 December 2006. It declares that those certain workover control systems 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. 0617294 is taken to have come into force on 15 September 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 Tariff Concession Instrument No. 0617294, enacted in 2006, is a regulation made under the Customs Act 1901 with the aim of facilitating tariff concessions for certain goods. This legislation was introduced to address the need for a streamlined process to apply for and grant tariff concessions on goods that are not produced domestically, thereby promoting trade efficiency and economic benefits. The instrument was developed by the Commonwealth of Australia and is administered by the Chief Executive Officer of Customs, who is mandated to assess applications and make written orders for tariff concessions if specific criteria are met. The policy objective of this regulation is to provide a mechanism for reducing customs duty on imported goods, which can enhance competitiveness and accessibility of such goods in the Australian market.
The instrument was enacted to ensure that the process for obtaining tariff concessions is transparent and fair, allowing interested parties to provide input before a decision is made. In the case of Instrument TCO No. 0617294, Woodside Energy Ltd applied for a tariff concession on certain workover control systems, and following a review, the CEO determined that no substitutable goods were produced in Australia. Consequently, the CEO issued the order, effective from the date of application, thereby setting the duty rate for these systems at 0%. This regulation ensures that the rights of importers are protected and that no existing liabilities are imposed retroactively, aligning with the overarching goals of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 0617294, made under the Customs Act 1901, applies to entities or individuals seeking a tariff concession order (TCO) for specified goods, in this case, certain workover control systems, from Woodside Energy Ltd. This instrument is specifically designed to reduce the customs duty on these goods to zero percent, provided that the CEO of Customs is satisfied that no substitutable goods were produced in Australia at the time of the application and that the application meets the core criteria outlined in the Act. The instrument's geographic reach is effectively national, as it pertains to goods entering Australia and affects the customs duties applicable under the Customs Tariff Act 1995. The Act excludes certain goods as specified in section 269SJ of the Customs Act, which details goods that cannot be subject to a TCO. The instrument's application may be extended or restricted through subordinate instruments, although no such amendments are noted in the provided text.
Key Provisions
The key operative sections of the Customs Act 1901, particularly as it pertains to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they are required to make a written order declaring that the goods are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995. The core criteria, as stipulated in section 269C, include the condition that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes several obligations on the parties involved. For instance, the CEO must assess whether an application meets the core criteria outlined in section 269C. Additionally, upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit any reasons why the TCO should not be made (subsection 269K(1)). Failure to adhere to these obligations could result in the TCO not being validly made, potentially leaving the applicant without the tariff concession they sought.
The Act also provides for specific consequences in the event of breaches. While the explanatory statement does not detail specific civil or criminal penalties for non-compliance with the TCO provisions, it is reasonable to infer that any failure to meet the obligations could result in the TCO being invalidated or not granted. Furthermore, any party adversely affected by a TCO could seek legal recourse, although this would depend on the specific circumstances and any applicable laws. For general breaches of the Customs Act, penalties could include fines and imprisonment, although the exact penalties would be determined by the severity of the breach and other relevant factors.