EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721745
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 offshore logging cabin on 17 December 2007.
Instrument
TCO No 0721745 was made on 28 March 2008. It declares that those certain offshore logging cabins 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. 0721745 is taken to have come into force on 17 December 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 administration of customs and excise through the establishment of various mechanisms, including Tariff Concession Orders (TCOs). The Act was introduced to address the need for a streamlined process to reduce customs duties on specific imported goods under certain conditions. The explanatory statement for Tariff Concession Instrument No. 0721745, made under the Customs Act 1901, details the application and approval process for a TCO by Schlumberger Oilfield Australia Pty Limited for certain offshore logging cabins. This instrument was introduced to provide tariff concessions where no substitutable goods were being produced in Australia, thus ensuring the competitiveness of Australian businesses without unfairly disadvantaging importers. The policy objective is to facilitate trade and economic efficiency by allowing duty-free imports of goods where domestic alternatives do not exist.
Scope and Application
The Tariff Concession Instrument No. 0721745, made under the Customs Act 1901, applies to specific goods identified in the instrument, namely certain offshore logging cabins. The Act allows for the application of a lower rate of customs duty to goods that are the subject of a Tariff Concession Order (TCO), provided certain criteria are met. This legislation pertains to any entity or person seeking tariff concessions for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. The geographic reach of this Act is national, as it applies across Australia in accordance with the Customs Act 1901. The instrument excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act allows for the extension of its application through subordinate instruments, which may further define terms such as "substitutable goods" and "ordinary course of business." The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before the TCO's effective date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F enables an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO), while section 269C sets out the core criteria that must be met for the CEO to consider making such an order. Specifically, there must be no substitutable goods produced in Australia on the day the application is lodged. If these criteria are satisfied, section 269P requires the CEO to make a written TCO, and this is then published in the Gazette under section 269K.
The obligations and requirements imposed by the Act primarily concern the CEO. The CEO must assess whether an application for a TCO meets the core criteria as set out in section 269C. If satisfied, the CEO must make a written TCO under section 269P and publish a notice in the Gazette inviting submissions from any interested parties, as per section 269K. The CEO must also ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor impose any liabilities on such persons in respect of anything done or omitted to be done before the date of registration. This is specified in subsection 269S(1). The Act further ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the text for breaches of this legislation. However, the Act ensures that the TCO does not disadvantage any person or impose liabilities on any person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. This implies that any action taken under the TCO must comply with the stipulations of the Act to avoid potential legal repercussions. Importers, for instance, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO is taken to have come into force. Any failure to comply with the requirements of the Act may result in legal challenges or other consequences as determined by relevant authorities.