EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704384
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 subsea manifolds on 26 March 2007.
Instrument
TCO No 0704384 was made on 15 June 2007. It declares that those certain subsea manifolds 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. 0704384 is taken to have come into force on 26 March 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 Australian Parliament, addresses the need for a structured approach to tariff concessions for specific goods entering Australia. This Act facilitates the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on goods not produced in Australia, provided certain criteria are met. Specifically, under section 269F, an application can be made for a TCO if no substitutable goods are produced in Australia, as defined under section 269D. The objective of this legislation is to encourage the import of goods that are not domestically produced, thereby supporting industries that rely on imported components or materials. The Customs Tariff Concession Instrument No. 0704384, which took effect on 26 March 2007, is an example of this process in action, as it granted a tariff concession on certain subsea manifolds following a successful application by Woodside Energy Ltd.
Scope and Application
The Tariff Concession Instrument No. 0704384 under the Customs Act 1901 applies to goods for which a Tariff Concession Order (TCO) has been approved by the Chief Executive Officer of Customs. Specifically, this instrument concerns certain subsea manifolds for which Woodside Energy Ltd applied for tariff concessions on 26 March 2007. The TCO applies to these goods by declaring that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a duty-free status as opposed to the general 5% duty rate. The application and subsequent approval of the TCO are subject to the conditions set out in section 269C of the Customs Act, requiring that no substitutable goods were produced in Australia at the time of the application. The scope of the Act is national, as it falls under the Commonwealth jurisdiction, and applies to any entity or individual importing the specified goods into Australia. There are no exclusions or exemptions outlined for this specific TCO, but general exclusions are noted in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process and its outcomes are managed under the auspices of the Customs Act, with the CEO's decision being final subject to the criteria set out in the Act.
Key Provisions
The Tariff Concession Instrument No. 0704384 under the Customs Act 1901 applies a lower rate of customs duty to certain subsea manifolds, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995, which is set at free duty as opposed to the general 5% rate (section 269F). This instrument was made in response to an application by Woodside Energy Ltd, and it came into effect on the day the application was lodged, 26 March 2007 (section 269S(1)). The instrument declares that these subsea manifolds are subject to the tariff concession because no substitutable goods were produced in Australia at the time of the application, meeting the core criteria set out in section 269C of the Act.
The obligations under the Customs Act 1901 for entities such as Woodside Energy Ltd include applying for a Tariff Concession Order (TCO) if they believe the goods they are importing meet the specified criteria (section 269F). The Chief Executive Officer of Customs (CEO) must then assess whether the application meets the core criteria, which involves determining that no substitutable goods were produced in Australia at the time of the application (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this case (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901, including making false or misleading statements in a TCO application, can result in civil or criminal penalties. Section 274 of the Customs Act 1901 provides for a penalty of up to $22,200 or imprisonment for up to two years, or both, for offences involving false statements. Additionally, the Act allows for the imposition of fines for breaches of tariff concession orders, although the specific penalties for such breaches are not detailed in the provided text. The Act also includes provisions for the recovery of any duties that were improperly remitted or not paid due to the tariff concession.