EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708677
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.
M-I Australia Pty Ltd applied for a TCO in respect of certain shale shaker screens on 07 June 2007.
Instrument
TCO No 0708677 was made on 17 August 2007. It declares that those certain shale shaker 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 10%. 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. 0708677 is taken to have come into force on 07 June 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for reduced customs duty rates on specified goods, which is a mechanism designed to address economic and trade policy objectives. The introduction of TCOs aims to facilitate the importation of goods that are not domestically produced, thereby supporting economic efficiency and competitive pricing. In line with this, M-I Australia Pty Ltd's application for a TCO concerning certain shale shaker screens was approved, resulting in Tariff Concession Instrument No. 0708677, which was registered on 17 August 2007. This instrument was enacted to ensure that the importation of these screens would be tariff-free, aligning with the policy of encouraging trade where local production does not occur. The instrument took effect from 07 June 2007, the date the application was lodged, without any adverse impact on existing rights or liabilities.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0708677, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby providing lower rates of customs duty on specified goods. The Act applies to any person or entity that imports goods and may seek a TCO for those goods, provided the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The scope of the legislation extends nationally, as it is a Commonwealth Act, and it applies to all states and territories within Australia. The application process for a TCO involves submitting an application to the CEO, who then assesses whether the goods are substitutable by any produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. If the CEO determines that the application meets the core criteria, they are mandated to issue a TCO, which was the case with M-I Australia Pty Ltd's application for shale shaker screens. The TCO instrument specifies the application of item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in the goods being exempt from the general rate of duty of 10% and instead subject to a free rate. This concession does not retroactively affect the rights of any party other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to the TCO's registration date.
Key Provisions
The main operative sections of the Customs Act 1901, as outlined in Tariff Concession Instrument No. 0708677, involve the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An applicant may submit an application for a TCO, provided the goods are not specified in section 269SJ of the Act (s 269C, s 269SJ). The CEO must then determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business (s 269C, s 269P(3)). If the core criteria are met, the CEO issues a TCO, specifying the reduced rate of customs duty applicable to the goods (s 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that applications are assessed against the core criteria and that appropriate TCOs are issued when necessary (s 269C, s 269P(3)). Additionally, the CEO is required to publish notices in the Gazette inviting submissions on TCO applications and must consider any submissions received (s 269K(1)). The applicant must ensure that the application is valid and meets the criteria outlined in the Act. The Act also requires that importers who benefit from the TCO can apply for a refund of duty on goods imported since the effective date of the TCO (reg 126(1)(r)).
In terms of penalties and consequences, the Act does not explicitly detail penalties for non-compliance with TCO provisions. However, failure to comply with the Act's requirements or making a false statement in an application could potentially lead to civil or criminal consequences under other sections of the Customs Act 1901. The maximum penalties for such offences can include fines and imprisonment, depending on the severity of the breach and the discretion of the court. The specifics of these penalties are not outlined in the explanatory statement but would be governed by the broader provisions of the Customs Act 1901.