EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808251
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 rotary pumps on 15 May 2008.
Instrument
TCO No 0808251 was made on 08 August 2008. It declares that those certain rotary pumps 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. 0808251 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 Parliament of Australia, provides for a scheme under which Tariff Concession Orders (TCOs) may be made to lower the rate of customs duty on specified goods. This Act allows the Chief Executive Officer of Customs to grant TCOs to ensure that certain goods, which are not produced in Australia and have no substitutable goods domestically available, benefit from a reduced customs duty rate. The Tariff Concession Instrument No. 0808251, made on 8 August 2008, is an example of this scheme in action, addressing the specific case of certain rotary pumps by Schlumberger Oilfield Australia Pty Limited, which were granted a concession to have their customs duty reduced to free, effective from 15 May 2008. The process involves satisfying core criteria, such as the absence of substitutable goods produced in Australia, and undergoing a consultation period where no objections were raised. The objective of this legislation is to facilitate the import of goods that are not produced domestically, thereby encouraging trade and economic activity without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities seeking tariff concessions for imported goods, which must not fall under the restricted categories specified in section 269SJ. The core criteria for granting a TCO are outlined in sections 269C, 269B, and 269E, stipulating that the goods must not have Australian substitutes produced in the ordinary course of business. Once an application meets these criteria, the CEO is mandated to issue a TCO, which in turn lowers the customs duty on the specified goods. For instance, Schlumberger Oilfield Australia Pty Limited successfully applied for a TCO for certain rotary pumps on 15 May 2008, which became effective on that date, and the duty on these goods was set to free. The CEO is required to publish notices in the Gazette to invite public submissions, although in this instance, no objections were received. The TCO does not adversely affect existing rights or impose liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main provisions of the Tariff Concession Instrument No. 0808251 (Instrument) are found in Part XVA of the Customs Act 1901 (the Act). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria outlined in sections 269B, 269C, and 269D, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this instance, the CEO declared that the certain rotary pumps are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the CEO when processing a TCO application. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions. Additionally, the CEO must determine whether the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. Finally, under section 269P(3), if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Tariff.
The Act does not outline specific offences, penalties, or consequences for breach of the TCO provisions. However, it is implied that any failure to comply with the requirements of the Act, such as submitting false information in a TCO application, could lead to legal action. For instance, if the CEO makes an order based on incorrect information provided by the applicant, they could be held liable for any financial losses incurred as a result. Additionally, section 126(1)(r) of the Regulations allows importers to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, which may have implications for non-compliance with the TCO provisions.