EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808248
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.
Schlumberger Oilfield Australia Pty Limited applied for a TCO in respect of certain skid stimulation on 15 May 2008.
Instrument
TCO No 0808248 was made on 04 August 2008. It declares that those certain skid stimulations 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. 0808248 is taken to have come into force on 15 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 Tariff Concession Instrument No. 0808248, enacted on 4 August 2008 under the Customs Act 1901, was introduced to provide a lower rate of customs duty on certain skid stimulations, following an application by Schlumberger Oilfield Australia Pty Limited. The Act allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs when specific criteria are met, such as the absence of substitutable goods produced in Australia. In this instance, the CEO determined that no such substitutable goods existed, thereby enabling the issuance of TCO No. 0808248. The policy objective is to benefit importers by potentially allowing them to claim refunds on duties paid on imported goods since the effective date of the TCO, without imposing any liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0808248 under the Customs Act 1901 applies to specific goods subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). This legislation allows for a lower rate of customs duty on goods that meet the criteria for a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of the Act extends to any person or entity that applies for a TCO in respect of particular goods, with the primary focus on those goods that are not specified in section 269SJ of the Act, which lists items ineligible for TCOs. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901, a Commonwealth Act. The application of the Act may be extended or restricted through subordinate instruments, which can further define the criteria and processes for TCO applications. Notably, the TCO does not affect the rights of any person as at the date of registration to their disadvantage nor impose liabilities for actions taken before the registration date, thereby safeguarding the interests of importers who can apply for refunds of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) under section 269F. Section 269C sets out the criteria for a TCO application, requiring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must issue a written TCO under section 269P(3), as seen in TCO No. 0808248 for skid stimulations, specifying that these goods are subject to a 5% duty rate instead of the general rate.
The obligations under the Act are primarily on the CEO, who must assess TCO applications against the core criteria and decide whether to issue an order. For applicants, the primary obligation is to ensure that the application meets the criteria, including proving that no substitutable goods were produced in Australia. The CEO is also required to publish a notice in the Gazette under subsection 269K(1) after accepting a TCO application as valid, inviting submissions from any interested parties. The CEO must then consider these submissions before making a final decision on the TCO.
Failure to comply with the requirements of the Act or to adhere to the conditions of a TCO can lead to various consequences. While the explanatory statement does not specify the exact nature of these consequences, breaches of customs regulations generally can result in civil and criminal penalties. Civil penalties can include fines and the confiscation of goods, while criminal penalties may involve imprisonment, reflecting the seriousness with which the law treats non-compliance. The maximum penalties for breaches are determined by the specific provisions of the Customs Act and related regulations, which may vary depending on the nature and severity of the offence.