EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803795
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 downhole cables on 6 March 2008.
Instrument
TCO No 0803795 was made on 9 May 2008. It declares that those certain downhole cables 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. 0803795 is taken to have come into force on 6 March 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. 0803795, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, ensuring that they are subject to a reduced rate of customs duty when no substitutable goods are produced in Australia. This instrument was established to streamline the application process for tariff concessions, allowing entities such as Schlumberger Oilfield Australia Pty Ltd to apply for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. The instrument specifies that the application meets the core criteria if no substitutable goods are produced domestically, as outlined in section 269C of the Act. The policy objective of this instrument is to facilitate the importation of goods at a lower duty rate, thereby benefiting importers and ensuring that the application process is transparent and accessible.
The instrument was enacted by the Chief Executive Officer of Customs, following the provisions of the Customs Act 1901, and came into effect on the date the application was lodged, 6 March 2008. The TCO No. 0803795 specifically applies to certain downhole cables, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as the CEO was satisfied that no substitutable goods were produced in Australia. This instrument does not affect any existing rights or impose new liabilities on persons other than the Commonwealth. Importers of the affected goods can apply for a refund of duty under the relevant regulations, thereby ensuring that the rights of importers are protected and the process remains fair and straightforward.
Scope and Application
The Tariff Concession Instrument No. 0803795, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain downhole cables, and is targeted at entities or individuals involved in importing these goods into Australia. The Act allows the Chief Executive Officer of Customs to grant tariff concessions on goods if certain criteria are met, specifically when no substitutable goods are produced in Australia in the ordinary course of business. This legislation operates on a Commonwealth level, influencing how customs duties are applied to specific imported goods, thus affecting importers directly. It is important to note that the instrument does not apply to goods specified in section 269SJ of the Customs Act, which lists items ineligible for tariff concessions. The instrument also does not disadvantage any person or impose liabilities on anyone for actions taken before its registration, ensuring that it only affects rights from the date of its effective commencement. Furthermore, the application of this Act can be extended or refined through subordinate instruments, thereby allowing for more specific regulations and adjustments to the tariff concession scheme.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0803795 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C sets out the core criteria for a Tariff Concession Order (TCO) application, requiring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a written order (a TCO) must be made. Section 269S specifies that the TCO comes into effect on the day the application was lodged, in this case, 6 March 2008.
The Customs Act 1901 imposes specific obligations on both the CEO and applicants for a TCO. The CEO must ensure that the application meets the core criteria as defined in section 269C, and if satisfied, make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The applicant, in this instance Schlumberger Oilfield Australia Pty Ltd, must provide sufficient information to demonstrate that no substitutable goods were produced in Australia, thus meeting the requirements for the concession. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the proposed TCO, although no submissions were received in this case.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for the failure to comply with the provisions of the TCO or the Customs Act 1901. However, the general legal framework within which these instruments operate includes potential penalties for fraudulent applications or misrepresentations, which could lead to civil or criminal charges under other sections of the Customs Act. The TCO itself does not impose any liabilities on any person, ensuring that it does not disadvantage those who have already engaged in transactions prior to the TCO coming into effect.
In summary, the Tariff Concession Instrument No. 0803795 provides a mechanism for reducing the customs duty on certain downhole cables to zero, provided the core criteria are met. The CEO of Customs is responsible for assessing applications and making TCOs, while applicants must furnish adequate evidence that no substitutable goods are produced in Australia. The TCO's commencement date aligns with the application date, and it does not impose any liabilities on individuals or entities, safeguarding their rights and interests as of the registration date.