EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700018
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 multiphase subsea pumps on 02 January 2007.
Instrument
TCO No 0700018 was made on 23 March 2007. It declares that those certain multiphase subsea pumps 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. 0700018 is taken to have come into force on 02 January 2007.
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 Parliament of Australia, provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain goods through the issuance of Tariff Concession Orders (TCOs). This legislative framework was introduced to address the need for reducing customs duties on specific goods, thereby promoting economic efficiency and competitiveness in the Australian market. This is particularly relevant in cases where Australian-made substitutes do not exist, allowing for the concession of tariff rates on imported goods that meet the specified criteria. The policy objective is to facilitate the importation of goods that are essential for certain industries while ensuring that such concessions do not unfairly impact Australian producers or consumers. In line with these objectives, TCO No. 0700018 was issued to Woodside Energy Ltd for certain multiphase subsea pumps, granting them a zero-duty rate as of 2 January 2007.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs), which can be applied for by individuals or entities seeking to have certain goods exempted from customs duty under specific conditions. This mechanism is overseen by the Chief Executive Officer of Customs (CEO), who evaluates applications to ensure they meet the core criteria stipulated under section 269C of the Act. Specifically, the CEO must be convinced that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The application process also involves public consultation, as outlined in section 269K(1) of the Act, where interested parties have the opportunity to lodge submissions against the proposed concession. The application for a TCO by Woodside Energy Ltd in respect of certain multiphase subsea pumps was accepted and resulted in Instrument TCO No 0700018, which came into force on the date of application, 02 January 2007. This instrument effectively reduced the duty on these specific pumps from the general rate of 5% to free, thereby benefiting importers who could apply for duty refunds for imports made since the effective date of the TCO. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession, nor are any liabilities imposed on them in respect of actions taken prior to the concession's registration.
Key Provisions
The Tariff Concession Instrument No. 0700018, as per the Customs Act 1901, establishes a framework whereby the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs). Section 269F allows individuals to apply to the CEO for a TCO concerning specific goods, with the CEO required to determine if the application complies with the core criteria set forth in section 269C. This criterion mandates that on the date of the application, no substitutable goods must be produced in Australia in the ordinary course of business. 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. If the CEO finds that the application meets these criteria, they are obligated under section 269P(3) to issue a written order that specifies the goods subject to the TCO.
The obligations under this Act include the CEO's responsibility to publish a notice in the Gazette inviting submissions from any party that believes the TCO should not proceed, as outlined in subsection 269K(1). This provision ensures a level of transparency and opportunity for public input. Furthermore, section 269S(1) stipulates that the TCO is considered to come into force on the day the application is lodged, which in the case of TCO No. 0700018, is 02 January 2007. Importantly, this legislation ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO as of the date of registration, and it does not impose any liabilities on any person in respect of actions taken prior to the registration date.
In terms of enforcement and penalties, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the issuance or compliance with a TCO. However, the broader Customs Act 1901 and associated regulations do provide for various offences and penalties related to customs violations. For instance, under the Customs Act, failure to comply with customs regulations can lead to civil penalties, criminal prosecutions, or both, depending on the severity of the breach. While the specific penalties for breaches directly related to TCOs are not detailed in the explanatory statement, they would likely fall under the general customs enforcement framework, where penalties can include substantial fines and potential imprisonment.