EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800156
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.
Halliburton Australia Pty Ltd applied for a TCO in respect of certain hydraulic cementer on 03 January 2008.
Instrument
TCO No 0800156 was made on 28 March 2008. It declares that those certain hydraulic cementers 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. 0800156 is taken to have come into force on 03 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the regulation of customs and excise within Australia. One aspect of this regulation involves the application of customs duty on imported goods. To address specific economic needs and facilitate trade, the Act allows for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. These orders can reduce the rate of customs duty on certain goods, provided certain criteria are met. The explanatory statement for Tariff Concession Instrument No. 0800156 outlines the process and rationale for granting a TCO to Halliburton Australia Pty Ltd for certain hydraulic cementers, effective from 3 January 2008. This concession was granted after it was determined that no substitutable goods were being produced in Australia, thereby meeting the core criteria for a TCO. The policy objective is to potentially stimulate economic activity by reducing the cost of importing these goods.
Scope and Application
The Tariff Concession Instrument No. 0800156 under the Customs Act 1901 applies to specific goods, in this instance certain hydraulic cementers, and is directed at entities or individuals seeking tariff concessions on these goods. The Act applies on a Commonwealth level, and it provides a mechanism through which the Chief Executive Officer of Customs can grant concessions, reducing or eliminating customs duty on certain imported goods. The legislation specifically excludes goods listed in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order (TCO). The instrument’s application can be extended or modified through subordinate instruments, ensuring flexibility and responsiveness to changing economic or trade conditions. The geographic reach of this Act is national, impacting all importers across Australia who deal with the specified goods. The TCO No. 0800156, made on 28 March 2008, declared that the concerned hydraulic cementers would be subject to a free rate of duty, effective from 03 January 2008, the date of the initial application.
Key Provisions
The Customs Act 1901, specifically under Part XVA, governs the establishment and administration of Tariff Concession Orders (TCOs) as stated in section 269F. These orders allow for a reduced rate of customs duty on specified goods. An application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO), who then assesses whether the application meets the core criteria outlined in section 269C. If the CEO determines that no substitutable goods are produced in Australia and that the application does not pertain to goods listed in section 269SJ, the CEO is obligated to make a written order, which is the TCO.
Entities and individuals applying for a TCO must ensure that their application adheres to the criteria set out in the Act. They must demonstrate that the goods in question do not have substitutable counterparts produced domestically, as defined by sections 269D and 269E. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO within a specified period. This transparency measure ensures that all relevant stakeholders have an opportunity to voice their concerns.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can lead to significant consequences. The Act does not explicitly state penalties for non-compliance with TCO applications, but general provisions under the Customs Act and related statutes could apply. These might include fines or other penalties for inaccurate declarations or fraudulent activities related to customs duties. Additionally, civil or criminal liability could arise for those who deliberately circumvent the provisions of the Act, potentially leading to legal action by the Commonwealth.
The commencement of TCO No. 0800156, as stated in subsection 269S(1), is effective from the date the application was lodged, in this case, 03 January 2008. Importantly, this TCO does not retroactively affect the rights of any party except the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the TCO's effective date. Importers of the specified goods can benefit from this concession by applying for duty refunds under paragraph 126(1)(r) of the Regulations for goods imported since the effective date of the TCO.