EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703237
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.
Apache Energy Ltd applied for a TCO in respect of certain injecting fluid screens on 19 December 2007.
Instrument
TCO No 0703237 was made on 7 March 2008. It declares that those certain injecting fluid screens 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. 0703237 is taken to have come into force on 19 December 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 Commonwealth Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The objective of these TCOs is to provide tariff concessions for certain goods, thereby reducing the customs duty on those goods. The explanatory statement for Tariff Concession Instrument No. 0703237, made on 7 March 2008, clarifies the process and conditions for making such concessions. In this case, Apache Energy Ltd applied for a TCO for certain injecting fluid screens, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. Consequently, a TCO was issued, resulting in a reduction of the duty on these screens from 5% to free. The TCO came into effect on the date of the application, 19 December 2007, and does not disadvantage any person or impose liabilities, while potentially benefiting importers by allowing them to apply for a refund of duty.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the application and administration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to entities and individuals seeking a lower rate of customs duty on goods, provided the goods are not specified in section 269SJ of the Act and the application meets the core criteria set out in section 269C. The application process requires that on the date of lodging, no substitutable goods are being produced in Australia in the ordinary course of business. The geographic and jurisdictional reach of this Act is Commonwealth-wide, as it pertains to federal customs duties and the authority of the CEO in making these orders. Exclusions from the application of a TCO include goods specified in section 269SJ of the Act, and the Act does not disadvantage or impose liabilities on persons for actions taken before the registration of the TCO. The application of the Act may be extended or restricted through subordinate instruments, which provide further detail on the implementation and administration of TCOs.
Key Provisions
The Tariff Concession Instrument No. 0703237 (TCO No. 0703237) amends the Customs Act 1901 (Act) by providing for a tariff concession order (TCO) in respect of certain injecting fluid screens. According to section 269F of the Act, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in relation to goods. If the CEO is satisfied that the application meets the core criteria under section 269C of the Act, they must make a written order 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 applies (section 269P(3)). In this case, Apache Energy Ltd applied for a TCO in respect of certain injecting fluid screens on 19 December 2007 and the CEO made the TCO No. 0703237 on 7 March 2008.
The TCO imposes specific obligations on the parties it governs. Firstly, the CEO must assess whether the application for a TCO meets the core criteria under section 269C of the Act. If satisfied, the CEO must make the written TCO order under section 269P(3). Secondly, as per section 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. If the CEO receives no submissions in response to this invitation, they may proceed with making the TCO.
Failure to comply with the requirements of the Customs Act 1901 and the TCO may result in offences and penalties. However, the explanatory statement does not provide specific information on the offences, penalties, or civil/criminal consequences for breach. The maximum penalties for offences under the Customs Act 1901 may vary depending on the nature and severity of the offence. It is important for parties governed by the Act to familiarise themselves with the relevant sections and seek legal advice if necessary to ensure compliance with the legislation.