EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0805147
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 subsea check valves on 2 April 2008.
Instrument
TCO No 0805147 was made on 20 June 2008. It declares that those certain subsea check valves 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. 0805147 is taken to have come into force on 2 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 Customs Act 1901 was enacted to provide a comprehensive framework for the administration of customs and excise in Australia. One of its functions is to facilitate tariff concession orders (TCOs), which allow for reduced customs duty rates on certain goods under specific circumstances. The Tariff Concession Instrument No. 0805147, enacted in 2008, is an instrument under this scheme, aimed at addressing the need for tariff concessions on specific goods. The instrument was introduced following an application by Woodside Energy Ltd for a tariff concession on certain subsea check valves. The instrument was created after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession. The instrument provides that these goods are subject to a free rate of duty, down from the general rate of 5%. The instrument came into force on the date the application was lodged, 2 April 2008, and does not affect any pre-existing rights or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0805147, under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been granted, thereby reducing the rate of customs duty on these goods. This Act applies to entities or individuals seeking tariff concessions for goods, primarily importers or businesses involved in the importation of specified goods. The Act operates nationally, extending across the Commonwealth of Australia, and its application is facilitated through subordinate instruments such as the Customs Tariff Act 1995. The scope of the Act excludes certain goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. In this particular case, the TCO No. 0805147 applies to certain subsea check valves, with the CEO determining that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession. The TCO provides a zero rate of duty on these specified goods, effective from the date the application was lodged, without retroactively affecting the rights of any person or imposing new liabilities.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by the Tariff Concession Instrument No. 0805147, are sections 269C, 269P, and 269S. Section 269C outlines the core criteria for a Tariff Concession Order (TCO), which must be satisfied for the lower rate of customs duty to apply. This includes the requirement that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written TCO. Section 269S specifies that a TCO is effective from the date the application was lodged, thus, TCO No. 0805147 is considered effective from 2 April 2008.
The Act imposes certain obligations on the parties involved. For instance, section 269F allows any person to apply for a TCO in respect of goods. The CEO is required to assess the application against the core criteria outlined in section 269C. If the application meets these criteria and does not pertain to goods specified in section 269SJ, which are ineligible for TCOs, the CEO must issue a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO. In this case, the CEO published such a notice but did not receive any submissions.
The Act also delineates consequences for non-compliance. While the Explanatory Statement does not explicitly list civil or criminal penalties for breaching the TCO provisions, general provisions of the Customs Act 1901 may apply. These could include fines, imprisonment, or other penalties for wilful or negligent breaches. The specific penalties would depend on the nature and severity of the breach, as well as any relevant case law or regulations. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and no new liabilities are imposed on any person as a result of the TCO.