EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808249
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 applied for a TCO in respect of certain pumping and blending mixers on 15 May 2008.
Instrument
TCO No 0808249 was made on 04 August 2008. It declares that those certain pumping and blending mixers 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. 0808249 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties, and aims to facilitate and regulate the movement of goods across Australia's borders. One of its significant provisions is Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders enable a lower rate of customs duty to be applied to certain goods, provided they meet specific criteria. The primary objective of this legislative framework is to encourage the import of goods that are not produced domestically, thereby promoting competition and economic efficiency.
The Tariff Concession Instrument No. 0808249 was introduced to address Schlumberger Oilfield Australia's application for tariff concessions on certain pumping and blending mixers. The instrument was enacted on 4 August 2008, following the satisfaction of the CEO that no substitutable goods were produced in Australia. This decision aligns with the core criteria set out in the Customs Act, particularly sections 269C and 269P. The instrument effectively grants a tariff concession, reducing the duty on these mixers from 5% to free, effective from the date of the application, 15 May 2008. The instrument was published in the Gazette, inviting public submissions, none of which were received. This measure is intended to benefit importers by allowing them to apply for duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0808249 under the Customs Act 1901 applies to entities that seek to import specific goods, namely certain pumping and blending mixers, for which they can claim tariff concessions. The instrument targets these goods by granting a concession that results in a reduction of the customs duty from the general rate of 5% to free. This concession is applicable from the date of the application, 15 May 2008, as stipulated in the Act, meaning that the benefits commence immediately upon application without awaiting the formal issuance of the TCO. The Act applies nationally across Australia, operating under the Commonwealth jurisdiction, and it extends its reach to any entity seeking to import the specified goods and benefit from the tariff concession. The CEO of Customs must ensure that the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia at the time of application. The instrument does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth, and it operates without disadvantaging any party under existing conditions.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0808249 under the Customs Act 1901 (section 269F) permit the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for certain goods, allowing for a lower rate of customs duty. Schlumberger Oilfield Australia applied for a TCO for certain pumping and blending mixers, which was subsequently granted (section 269P(3)). The TCO, made on 4 August 2008, specifies that these mixers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, compared to the general rate of 5% (section 269P(3)). The TCO is deemed to have come into force on 15 May 2008, the date the application was lodged (section 269S(1)).
The obligations imposed by the Act on the parties include the requirement for the CEO to assess applications for TCOs against the core criteria outlined in sections 269C and 269SJ. The CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269C). Schlumberger Oilfield Australia must also ensure that their application for a TCO complies with all relevant criteria and provides sufficient evidence to support the concession. Furthermore, the CEO is required to publish a notice in the Gazette, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received.
The Act outlines potential consequences for non-compliance with the TCO provisions. Breaches of the Customs Act 1901 can result in both civil and criminal penalties. Civil penalties may include fines up to the maximum prescribed by law, depending on the severity and intent of the breach. Criminal penalties can include imprisonment, with the maximum penalties varying according to the specific offence under the Act. Importers are also granted rights under paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the TCO came into force. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person in respect of actions taken before the TCO was registered.