EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801079
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 cable spoolers on 18 January 2008.
Instrument
TCO No 0801079 was made on 4 April 2008. It declares that those certain cable spoolers 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. 0801079 is taken to have come into force on 18 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. 0801079, enacted in 2008, operates under the Customs Act 1901 to address the issue of granting tariff concessions for specific goods that are not produced in Australia. This instrument is designed to facilitate the application process for tariff concessions by the Chief Executive Officer of Customs, ensuring that the application meets certain core criteria before proceeding. The instrument was introduced in response to a need for a streamlined process to grant tariff concessions, thereby promoting trade and reducing the financial burden on importers of specific goods.
The instrument was enacted by the relevant authority under section 269F of the Customs Act 1901, aiming to ensure that the tariff concessions are granted fairly and transparently. Schlumberger Oilfield Australia Pty Ltd's application for a tariff concession on certain cable spoolers exemplifies this process, where the Chief Executive Officer determined that the application met the necessary criteria, resulting in a tariff concession that provided significant benefits to the relevant importers. The policy objective is to encourage the importation of goods that are not locally produced, thereby supporting economic efficiency and consumer interests.
Scope and Application
The Tariff Concession Instrument No. 0801079 under the Customs Act 1901 applies to goods specified in the instrument, namely certain cable spoolers, for which Schlumberger Oilfield Australia Pty Ltd made an application. The instrument targets entities or individuals involved in the importation of these specific goods, providing them with tariff concessions. This Act operates on a Commonwealth level, with the Chief Executive Officer of Customs having the authority to make Tariff Concession Orders. The scope of this legislation is limited to goods that are subject to a TCO application and are not specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concessions. The geographic reach of this legislation is national, as it applies to imports into Australia. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken prior to the commencement of the TCO. The application of this Act may be further extended or restricted through subordinate instruments, although no such modifications are noted in the provided text.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to this Tariff Concession Order (TCO) are sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, 269K, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business as defined by sections 269B and 269E, the CEO must make a written order, a TCO, declaring that the goods in question are subject to a lower rate of customs duty as specified in the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as required by section 269K.
The Act imposes several obligations on the parties it governs. Firstly, any person wishing to apply for a TCO must do so in accordance with section 269F and must ensure that the application meets the core criteria outlined in section 269C. The CEO, on receiving a valid application, has the duty to assess whether the application meets the specified criteria and to make a written order if it does, as per section 269P. The CEO must also publish a notice in the Gazette inviting any person who might have reasons to oppose the TCO to lodge a submission, in line with section 269K. If no submissions are received, the CEO must proceed to make the TCO.
The Act also outlines specific consequences and penalties for breaches. Although the explanatory statement does not detail specific penalties, it is implied that any failure to comply with the provisions of the Act, such as making a false application for a TCO or providing misleading information, could result in civil or criminal penalties. These penalties may include fines or other sanctions as determined by the relevant authorities under the Customs Act 1901 or other applicable legislation. Additionally, section 269SJ specifies goods that cannot be subject to a TCO, and any application concerning these goods would be invalid, potentially leading to refusal and possibly further legal consequences for the applicant.