EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718308
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 oil and gas drill rig top drives on 25 October 2007.
Instrument
TCO No 0718308 was made on 30 January 2008. It declares that those certain oil and gas drill rig top drives 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. 0718308 is taken to have come into force on 25 October 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise duties and to facilitate international trade. It introduced a framework for the administration of tariffs and provided mechanisms for the concession of tariff rates on certain goods under specific conditions. Tariff Concession Orders (TCOs) allow for the reduction or elimination of customs duty on goods that are not produced in Australia, thereby promoting fair trade practices and supporting industries that rely on imported components. The explanatory statement for Instrument No. 0718308, made under the Customs Act 1901, details a Tariff Concession Order granted to Woodside Energy Ltd for certain oil and gas drill rig top drives. This concession was introduced to address the absence of Australian production of these goods, ensuring that the industry could access necessary components at a reduced cost, thereby maintaining competitiveness and facilitating the efficient operation of the sector.
Scope and Application
The Tariff Concession Instrument No. 0718308 under the Customs Act 1901 applies to goods for which an application has been made and approved by the Chief Executive Officer of Customs. Specifically, this legislation pertains to oil and gas drill rig top drives as applied for by Woodside Energy Ltd, granting them tariff concessions, thereby reducing the customs duty rate from the general 5% to free. The Act applies to any entity or person seeking to import these goods into Australia, thereby potentially benefiting importers who can apply for duty refunds on imports since the effective date of the tariff concession. The scope of the Act is national, given it operates under the Commonwealth's customs framework, and it does not disadvantage any existing rights or impose liabilities on persons for actions prior to the concession's registration. The Act does not specify exclusions or exemptions beyond what is stipulated in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a tariff concession. The application of the Act may be extended or modified through subordinate instruments, but the primary focus remains on providing tariff relief for specified goods under defined conditions.
Key Provisions
The Tariff Concession Instrument No. 0718308, pursuant to the Customs Act 1901 (the Act), pertains to the application and implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F of the Act allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning particular goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ of the Act, which outlines goods ineligible for a TCO, the CEO must then determine if the application meets the core criteria (section 269C). This involves ensuring that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D, 269E, and 269P(3) of the Act.
Section 269B further defines ‘goods produced in Australia’ and ‘ordinary course of business,’ while section 269D specifies that ‘substitutable goods’ are those produced in Australia and capable of being used in a manner corresponding to the use of the goods in the TCO application. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to issue a written order, the TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular TCO No. 0718308, made on 30 January 2008, pertains to certain oil and gas drill rig top drives, which are now subject to a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure that their applications are valid and meet the core criteria, as outlined in section 269C. The CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons against the TCO being made, as stated in subsection 269K(1). Additionally, the CEO must decide whether the application meets the core criteria and make a TCO if satisfied, as per sections 269C and 269P(3). The TCO is deemed to come into force on the day the application is lodged (subsection 269S(1)). Furthermore, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, and does not impose any liabilities on any person, as per the instrument.
The Act also outlines the consequences for breaches of its provisions. However, the Explanatory Statement does not provide specific details on offences, penalties, or civil/criminal consequences for breach. The focus is on the procedural aspects of TCO applications and the obligations of the CEO. It is implied that compliance with the Act is necessary to avoid any potential legal ramifications, though the exact penalties or consequences for non-compliance are not specified within this context.