EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804348
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 debris cap subsea oil and gas on 17 April 2008.
Instrument
TCO No 0804348 was made on 11 July 2008. It declares that those certain debris cap 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. 0804348 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. 0804348, enacted in 2008, amends the Customs Act 1901 by providing a tariff concession on certain debris cap subsea oil and gas, reducing the duty rate from the general rate of 5% to free. This instrument was introduced to address the issue of applying a concessional tariff rate to specific goods that Santos Limited sought to import, ensuring that these goods would benefit from a tariff reduction. Enacted by the Chief Executive Officer of Customs under the authority provided by the Customs Act, the policy objective of this instrument is to facilitate the import of goods that are not produced domestically and for which no suitable substitutes are available, thereby supporting industries that rely on such imports.
The Tariff Concession Instrument No. 0804348 was implemented following Santos Limited's application for tariff concessions on 17 April 2008. The CEO of Customs, satisfied that no substitutable goods were produced in Australia, issued the order on 11 July 2008, effective from the date of the application. The instrument was published in the Gazette with an invitation for submissions, although none were received. The tariff concession does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth and benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0804348 under the Customs Act 1901 applies to entities such as Santos Limited seeking tariff concessions on specific goods, in this instance certain debris cap subsea oil and gas, which are subject to the Customs Tariff Act 1995. The instrument was enacted to provide relief by reducing the duty on these goods from the general rate of 5% to free, provided the application meets the core criteria outlined in the Customs Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The instrument applies nationally within Australia and its provisions are effective from the date the application for the tariff concession was made, which is 17 April 2008. The application of this instrument is subject to the exclusions and conditions specified in the Customs Act and does not affect any pre-existing rights or liabilities incurred before the registration date. Furthermore, the application process requires public notice to be given, inviting submissions from interested parties, although in this case, no submissions were received. The scope and impact of the instrument can be further defined or adjusted through subordinate instruments, ensuring its application aligns with broader legislative intent and economic policies.
Key Provisions
The Tariff Concession Instrument No. 0804348 under the Customs Act 1901 (section 269F) primarily addresses the application process for Tariff Concession Orders (TCOs) for specific goods, namely certain debris cap subsea oil and gas. According to section 269C, a TCO application is valid if, on the day it is lodged, no substitutable goods are produced in Australia in the ordinary course of business. The CEO must then make a written order (section 269P(3)) declaring that the goods subject to the TCO application are those to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, in this case, item 50. This results in a change from a general duty rate of 5% to a free rate for these goods.
The obligations under this legislation are clearly defined. The CEO has a responsibility to assess the validity of a TCO application by ensuring that no substitutable goods are produced in Australia at the time of application (section 269C). Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not proceed (subsection 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person for actions taken before the TCO's effective date (subsection 269S(1)).
There are no explicit offences or penalties mentioned within the text regarding the breach of provisions in this particular Tariff Concession Instrument. However, any general contraventions of the Customs Act 1901 could attract civil or criminal penalties as per other sections of the Act. For instance, knowingly making a false statement or document could lead to fines or imprisonment, depending on the severity of the breach. It is also worth noting that the TCO is designed to ensure that importers can apply for a refund of duty on goods imported since the TCO's effective date, highlighting the importance of compliance with the procedural requirements.
In summary, the Tariff Concession Instrument No. 0804348 under the Customs Act 1901 facilitates the reduction of customs duties for specific goods, provided no substitutable goods are produced in Australia at the time of application. The CEO's role is pivotal in assessing applications and publishing notices to allow for potential objections. Although the specific penalties for breaches of this instrument are not detailed, general penalties under the Customs Act 1901 may apply, emphasizing the importance of compliance with the statutory requirements.