EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804345
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.
Santos Limited applied for a TCO in respect of certain guide post extensions subsea oil and gas on 17 April 2008.
Instrument
TCO No 0804345 was made on 11 July 2008. It declares that those certain guide post extensions subsea oil and gas 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. 0804345 is taken to have come into force on 17 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. 0804345, enacted in 2008, operates under the Customs Act 1901 and is designed to address the issue of providing tariff concessions for specific goods. This instrument was introduced by the Chief Executive Officer of Customs (CEO) in response to an application by Santos Limited for tariff concessions on certain guide post extensions for subsea oil and gas. The CEO, after ensuring that the application complied with the core criteria stipulated in the Act, approved the tariff concession, making it effective from the date the application was lodged, 17 April 2008. This legislative measure aims to benefit importers by allowing them to apply for refunds of duties on goods imported since the effective date of the concession, without imposing any new liabilities on any person.
The Australian Parliament enacted this legislation to streamline the process of applying for tariff concessions, ensuring that goods which are not substitutable and not produced in Australia can benefit from reduced customs duties. By establishing clear criteria for such concessions, the Act aims to facilitate smoother trade operations and provide economic benefits to importers without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislative provision allows for reduced rates of customs duty on specific goods, subject to certain conditions and applications. A TCO may be applied for by any person in respect of goods, provided that the application does not pertain to goods that are ineligible under section 269SJ of the Act. The CEO evaluates the application against the core criteria outlined in section 269C, specifically checking whether the goods are substitutable and produced in Australia in the ordinary course of business, as defined by sections 269D and 269E respectively. If the application meets these criteria, the CEO is obligated to issue a written order, making the specified goods subject to a lower rate of duty as prescribed in the Customs Tariff Act 1995. This process was exemplified in the case of TCO No 0804345, concerning Santos Limited's application for tariff concessions on certain subsea oil and gas guide post extensions. The CEO issued this TCO on 11 July 2008, effectively reducing the duty on these goods to free from the general rate of 5%. The TCO's commencement date aligns with the date of the application, 17 April 2008, and it does not retroactively disadvantage any person or impose liabilities for actions prior to its issuance.
Key Provisions
The Tariff Concession Instrument No. 0804345 under the Customs Act 1901 (the Act) provides a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) for certain goods, effectively reducing the customs duty on those goods. Section 269F of the Act allows an application to be made to the CEO for a TCO concerning specific goods, provided these goods are not excluded as per section 269SJ. The CEO must assess whether the application meets the core criteria outlined in section 269C, which requires the goods not to have substitutable alternatives produced in Australia at the time the application was lodged.
The obligations imposed by the Act on the parties involve ensuring that the goods specified in a TCO application are not substitutable by any goods produced in Australia as defined by section 269D, and that the production of these goods is not in the ordinary course of business as per section 269E. The CEO has a duty to consider and respond to any submissions received under subsection 269K(1) of the Act, which mandates the publication of a notice in the Gazette inviting objections to the TCO. In this case, no submissions were received, indicating a smooth pathway for the TCO to proceed.
In terms of legal consequences, the Act does not specify penalties for failing to comply with the TCO provisions; however, any breaches of the conditions under which the TCO was granted could potentially lead to the revocation of the concession. The Act ensures that the TCO does not retroactively disadvantage any person other than the Commonwealth, nor does it impose liabilities on anyone for actions taken before the TCO's effective date. Importers of the goods affected by the TCO may apply for a refund of duty under paragraph 126(1)(r) of the Regulations, which is a civil remedy available to them.