EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803235
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 seamless stainless steel casing and or tubing on 10 April 2008.
Instrument
TCO No 0803235 was made on 4 July 2008. It declares that those certain seamless stainless steel casing and or tubing 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. 0803235 is taken to have come into force on 10 April 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. 0803235 was enacted in 2008 under the Customs Act 1901 to provide tariff concessions on certain seamless stainless steel casing and tubing, addressing the gap where no substitutable goods were produced in Australia. This instrument was developed in response to an application by Woodside Energy Ltd, aiming to ensure that the import of these specific goods would not be subject to the general rate of customs duty. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who, upon verifying that the application met the core criteria as outlined in the Customs Act, made the written order declaring the goods subject to a lower rate of customs duty. The policy objective here is to support Australian industries by ensuring that tariff concessions are granted where there is no domestic production of substitutable goods, thereby potentially encouraging imports where no local alternatives exist.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods and provide for a lower rate of customs duty. The Act applies to any person or entity wishing to import goods eligible for a tariff concession, provided the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The TCO process is geographically applicable across Australia, impacting the entire Commonwealth. The Act's application may be extended or restricted through subordinate instruments, although the primary legislation sets out the core criteria for eligibility. In the case of TCO No. 0803235, the CEO determined that seamless stainless steel casing and tubing met the criteria, resulting in the goods being subject to a duty rate of free, down from the general rate of 5%. This TCO came into effect on 10 April 2008, the date the application was lodged, without imposing any liabilities on persons other than the Commonwealth.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0803235 are sections 269C, 269B, and 269P of the Customs Act 1901 (the Act), as well as subsection 269S(1) of the Customs Tariff Act 1995 (the Tariff). Section 269C of the Act establishes that an application for a Tariff Concession Order (TCO) meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This definition is further explained in sections 269B and 269D of the Act, which detail the meanings of "goods produced in Australia", "ordinary course of business", and "substitutable goods". If the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets these criteria, they must make a written order (a TCO) as per subsection 269P(3) of the Act. According to subsection 269S(1) of the Tariff, the TCO is considered to have come into force on the day the application was lodged.
Under the Customs Act, parties or entities governed by the Act must ensure that they comply with the criteria set out for a TCO application. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia. If the CEO is satisfied with the application, they must make the TCO, which declares that the goods are subject to a prescribed rate of duty as specified in the Tariff. The CEO must also publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. This ensures transparency and allows for any objections to be considered.
Failure to comply with the Act's provisions could result in various consequences. However, the Explanatory Statement does not specify any specific offences, penalties, or civil or criminal consequences for breach of the TCO. The general principles of administrative law and the specific terms of the TCO would apply in cases of non-compliance. The effectiveness of any enforcement actions would depend on the specific circumstances of the breach and the applicable laws.