EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806481
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 pipeline internal inspection system on 05 May 2008.
Instrument
TCO No 0806481 was made on 01 August 2008. It declares that those certain pipeline internal inspection system 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. 0806481 is taken to have come into force on 05 May 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, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to apply a lower rate of customs duty on specified goods. The 2008 Tariff Concession Instrument No. 0806481, declared under this Act, addresses the problem of ensuring that certain pipeline internal inspection systems, for which Woodside Energy Ltd applied for tariff concessions, are not subject to customs duty if no substitutable goods are produced in Australia. The policy objective of the Act, as evidenced in the creation of TCOs, is to support Australian industries by providing tariff relief on goods where domestically produced alternatives do not exist, thereby promoting the use of locally manufactured products. The instrument was introduced without any submissions opposing the concession, indicating a general acceptance of the policy's alignment with broader economic interests.
Scope and Application
The Tariff Concession Instrument No. 0806481 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). This applies to any person who has applied for such a concession, provided their application meets the core criteria as outlined in the Act. The legislation enables a lower rate of customs duty for certain goods, specifically those pipeline internal inspection systems for which Woodside Energy Ltd applied on 05 May 2008. The instrument was made on 01 August 2008, and it specifies that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the rate of duty reduced from the general 5% to free. The application of the TCO is governed by the Commonwealth and extends to any goods fitting the specified criteria. The instrument does not affect the rights of any person adversely and does not impose any liabilities on any person other than the Commonwealth, including the rights of importers who can apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901 provides a framework for the imposition of tariffs on imported goods, with certain provisions allowing for tariff concessions on specific goods through Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO must determine whether the application meets the core criteria, which are outlined in section 269C. The application must be assessed against the criteria that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
For the purposes of this Act, a TCO application meets the core criteria if it is established that no goods which are functionally equivalent or substitutable to those being sought for concession were being produced in Australia at the time of the application. This is a significant threshold, as it ensures that the concession is granted only where there is a genuine need for it due to a lack of local production. The CEO must make a written order, or TCO, if satisfied that the application meets these criteria, effectively granting the concession by applying a specified item from Schedule 4 of the Customs Tariff Act 1995 to the goods. In the case of TCO No. 0806481, certain pipeline internal inspection systems are subject to this concession, reducing their duty from a general rate of 5% to free.
The Act imposes certain obligations on the CEO and other parties involved in the process of granting TCOs. Under section 269K, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This ensures transparency and provides an opportunity for interested parties to voice their concerns. In the instance of TCO No. 0806481, no submissions were received in response to the notice, indicating that there were no objections to the concession being granted.
The Customs Act 1901 also outlines consequences for non-compliance with the provisions relating to TCOs. While the explanatory statement does not explicitly state the penalties for breach, under the general terms of the Act, any person who contravenes the provisions may be subject to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines, while criminal penalties can include imprisonment. The specifics of these penalties would be determined by the relevant courts based on the circumstances of the breach.