EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717342
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 Limited applied for a TCO in respect of certain pressurised cabin on 12 October 2007.
Instrument
TCO No 0717342 was made on 31 January 2008. It declares that those certain pressurised cabin 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. 0717342 is taken to have come into force on 31 January 2008.
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. 0717342 was enacted in 2008 under the Customs Act 1901 to address a specific need for tariff concessions on certain goods imported into Australia. This instrument was introduced to provide relief to importers by offering a reduced customs duty rate on specific goods, in this case, certain pressurised cabins, provided that no substitutable goods were being produced in Australia. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act, which allows for the creation of Tariff Concession Orders (TCOs) to facilitate trade and reduce the financial burden on importers. The policy objective of this instrument was to ensure that importers of specified goods could benefit from reduced tariffs, thereby encouraging trade and potentially lowering the costs associated with importing these goods into Australia. The process involved in creating this TCO included a mandatory public notice and consultation period, although in this instance, no submissions were received in response to the published notice.
Scope and Application
The Tariff Concession Instrument No. 0717342 under the Customs Act 1901 pertains to the application and administration of tariff concessions for specific goods, in this case, certain pressurised cabins. This legislation applies to any person or entity seeking to import these specified goods into Australia and thereby benefit from a concessional rate of customs duty. The application of the Act is national in scope, as it falls under the purview of the Commonwealth and impacts all states and territories within Australia. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which lists items ineligible for tariff concessions, and it applies only if the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business. The application process involves the CEO evaluating whether the applicant's goods meet the core criteria, which include the absence of Australian-produced substitutable goods, and subsequently issuing a Tariff Concession Order if satisfied. The geographic and jurisdictional reach of this legislation is broad, affecting all entities involved in the importation of the specified goods across Australia. The Act extends its application through subordinate instruments, which provide further details on the specific goods eligible for tariff concessions and the procedures for application and review.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P(3), and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria (section 269C), which requires that no substitutable goods were produced in Australia in the ordinary course of business (sections 269B and 269E), the CEO must make a written order (section 269P(3)). This order (the TCO) declares 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. The TCO specifies the rate of duty for the goods subject to the order.
The obligations and requirements imposed by the Act include the CEO's duty to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). The Act also requires that 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 (subsection 269S(1)). The rights of importers will be beneficially affected, as they 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 (paragraph 126(1)(r) of the Regulations).
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, the CEO’s decision to issue a TCO is contingent upon meeting specific criteria, and failure to do so could result in the TCO being challenged or revoked. The Act ensures that the rights of individuals and entities are protected, and that no new liabilities are imposed by the TCO on any person other than the Commonwealth. The focus is on ensuring that the tariff concession process is fair and transparent, with due consideration given to the potential impact on all stakeholders.