EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706084
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 oil and gas screens on 13 April 2007.
Instrument
TCO No 0706084 was made on 6 July 2007. It declares that those certain oil and gas 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 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. 0706084 is taken to have come into force on 13 April 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 Tariff Concession Instrument No. 0706084, enacted in 2007, amends the Customs Act 1901 to provide tariff concessions for certain oil and gas screens. This instrument was introduced to address the need for reduced customs duty rates on specific goods that are not substitutable by Australian-produced items, thereby facilitating trade and potentially lowering costs for businesses importing these goods. The Customs Act 1901, enacted by the Parliament of Australia, allows for the Chief Executive Officer of Customs to issue Tariff Concession Orders that apply lower customs duty rates on specified goods, provided they meet certain criteria. The policy objective behind this instrument is to ensure that the application of tariff concessions does not disadvantage any person and does not impose any new liabilities, while allowing importers to seek refunds on duties paid before the concession took effect.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a concession on customs duty for goods imported into Australia, provided the goods do not fall under the categories specified in section 269SJ of the Act, which includes certain goods that are typically not eligible for tariff concessions. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The scope of this legislation is national, applying across all jurisdictions within Australia, and it extends to any imported goods subject to the Customs Tariff Act 1995. The application of the Act is further managed through subordinate instruments, which may specify additional criteria or modify the application of the Act as necessary.
Key Provisions
The Tariff Concession Instrument No. 0706084 under the Customs Act 1901 provides for a lower rate of customs duty for certain goods, specifically oil and gas screens, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (sections 269C, 269P(3), and 269S). Under section 269C, a Tariff Concession Order (TCO) can be made if the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods were produced in Australia on the day the application was lodged. In this case, the CEO was satisfied that the application met the core criteria and therefore issued TCO No. 0706084, reducing the duty rate from the general rate of 5% to 0%.
The obligations under this legislation primarily concern the CEO, who must evaluate the application and determine whether the core criteria are met. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. Additionally, the TCO is considered to have come into force on the day the application was lodged (subsection 269S(1)), which in this case was 13 April 2007.
The legislation outlines potential consequences for non-compliance, although specific penalties are not detailed in the explanatory statement. Generally, the Customs Act 1901 includes provisions for both civil and criminal penalties for breaches related to customs duties. For civil penalties, section 196 of the Act allows for fines up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate. Criminal penalties under section 236 can result in imprisonment for up to five years for individuals and 25,000 penalty units for bodies corporate. These penalties underscore the importance of adhering to the terms of the TCO and the overall framework established by the Customs Act 1901.