EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716474
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.
Schlumberger Oilfield Australia Pty Ltd applied for a TCO in respect of certain cementer skid mount on 28 September 2007.
Instrument
TCO No 0716474 was made on 14 December 2007. It declares that those certain cementer skid mount 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. 0716474 is taken to have come into force on 28 September 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, provides a framework for the imposition and management of customs duties, including the ability to grant tariff concessions on certain goods through Tariff Concession Orders (TCOs). The Act was introduced to address the need for a flexible and responsive system that could adapt to the economic and trade environment. In particular, it seeks to provide relief from customs duties for goods that cannot be produced domestically, thereby supporting the importation of these goods and potentially lowering costs for businesses and consumers. The explanatory statement for Tariff Concession Instrument No. 0716474, made under the Customs Act, outlines the process for granting a TCO to Schlumberger Oilfield Australia Pty Ltd for certain cementer skid mounts, where it was determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a concession. The instrument was made on 14 December 2007, and it came into effect on 28 September 2007, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0716474, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, namely certain cementer skid mounts. This Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty for specific goods, provided the application for a TCO meets certain criteria, such as the absence of substitutable goods produced in Australia. The legislation applies to entities and individuals importing these specific goods, thereby directly affecting their customs duty liabilities. Geographically, this Act operates under the national jurisdiction of Australia, as it is an instrument of the Commonwealth. The Act excludes certain goods from eligibility for a TCO as specified in section 269SJ of the Customs Act 1901. The application and effect of the TCO are further governed by the Customs Tariff Act 1995 and the Customs Regulations 1996, which may extend or detail the application of the primary Act through subordinate legislation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0716474 under the Customs Act 1901 (the Act) are outlined in sections 269C, 269F, and 269P. Section 269F (3) enables a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning specific goods, provided the application is not in respect of goods specified in section 269SJ, which excludes certain goods from TCO eligibility. If the CEO determines that the application meets the core criteria set out in section 269C, they must issue a TCO under section 269P (3). This order declares that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995 (the Tariff), thereby reducing the rate of duty on those goods.
Under this legislation, the CEO is obligated to assess whether a TCO application meets the core criteria as per section 269C. This includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, with definitions for 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied with the application, they must issue a written order declaring the goods subject to the TCO. The CEO is also required to publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons, as per subsection 269K(1).
The Act does not specify any direct offences or penalties for breaches related to TCOs. However, the consequences for non-compliance with the conditions set out in a TCO or the procedures for applying for one would likely fall under general administrative and customs regulations. Importers who fail to comply with the terms of the TCO or the application process may face administrative penalties, such as fines or the loss of tariff concessions, which would need to be assessed under the broader customs and administrative frameworks. The rights of importers are protected under the legislation to ensure they are not disadvantaged by the TCO if it is registered after they have already imported the goods.