EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804802
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 offshore accommodation modules on 25 March 2008.
Instrument
TCO No 0804802 was made on 13 June 2008. It declares that those certain offshore accommodation modules 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. 0804802 is taken to have come into force on 25 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 Customs Act 1901, enacted by the Parliament of Australia, introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The aim of this Act is to provide a mechanism for reducing customs duty on certain goods, thereby addressing the gap in facilitating trade and economic activity by lowering costs for businesses that import specific types of goods. In line with the policy objective of supporting trade, Tariff Concession Instrument No. 0804802, made on 13 June 2008, provides a concession for certain offshore accommodation modules by applying a duty rate of free instead of the general rate of 5%. This legislative instrument was introduced following an application by Woodside Energy Ltd, and it came into force on 25 March 2008, the date the application was lodged. The instrument ensures that no person other than the Commonwealth is disadvantaged or subjected to new liabilities as a result of its implementation.
Scope and Application
The Tariff Concession Instrument No. 0804802 applies to goods specified in the instrument, namely certain offshore accommodation modules, and is issued under the authority of the Customs Act 1901. This instrument is applicable to the Commonwealth and extends to any entities or individuals importing the specified goods into Australia. The geographic scope of the Act is national, as it pertains to customs duties applied across Australia. The instrument does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person. The CEO of Customs must decide whether an application for a Tariff Concession Order meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is made, which in this case, declares that the goods in question are subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring flexibility in its implementation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0804802 under the Customs Act 1901 (the Act) involve the application and approval process for Tariff Concession Orders (TCOs). Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria under section 269C, which require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this legislation on the parties involved are primarily on the CEO of Customs. They must carefully evaluate the TCO application against the criteria outlined in the Act. Upon determining that the application meets the core criteria, the CEO is required to issue a written TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application. In this instance, no submissions were received, and the TCO was issued accordingly.
Regarding offences, penalties, or consequences, the Act does not specify civil or criminal penalties for failing to comply with the requirements of a TCO. However, the instrument itself ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO. In this case, the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any new liabilities on any person.