EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811566
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.
Halliburton Australia Pty Ltd applied for a TCO in respect of certain drilling tools interconnecting assemblies parts on 06 June 2008.
Instrument
TCO No 0811566 was made on 22 August 2008. It declares that those certain drilling tools interconnecting assemblies parts 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. 0811566 is taken to have come into force on 06 June 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 by the Australian Parliament to provide a regulatory framework for customs and excise duties, amongst other things. The act includes a provision for Tariff Concession Orders (TCOs), which reduce the customs duty on certain goods. The Tariff Concession Instrument No. 0811566, enacted in 2008, is an example of such an order. This particular instrument was introduced in response to an application by Halliburton Australia Pty Ltd for tariff concessions on certain drilling tools interconnecting assemblies parts, which were not being produced in Australia at the time. The policy objective of this instrument is to facilitate the importation of these goods by reducing their customs duty, thereby benefiting the rights of importers who can now apply for a refund of duty on goods imported since the date the TCO was taken to have come into force. The instrument does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person.
Scope and Application
The Customs Act 1901 governs the application of tariff concession orders (TCOs) for specific goods, facilitating reduced customs duties for those items. This legislation applies to any individual or entity seeking a tariff concession for goods that meet the core criteria outlined in the Act. The primary scope of the Act extends to the entire Commonwealth of Australia and encompasses the process of applying for, and granting, a TCO by the Chief Executive Officer of Customs. Notably, the Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. Once an application is accepted and processed, a TCO takes effect from the date the application was lodged, thereby offering immediate benefit to importers who can apply for refunds on duties paid prior to the concession's effective date. The Act ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by the concession.
Key Provisions
The main operative sections of this legislation (section 269C and section 269P(3)) provide the framework for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Specifically, section 269C outlines the core criteria that must be met for a TCO application to be considered, which includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that these core criteria are met, they must make a written order declaring that the goods in question are subject to a prescribed rate of duty, which in this case is free duty.
The Act imposes specific obligations on the CEO and applicants for TCOs. The CEO must ensure that a TCO application is made in respect of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they consider that there are reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received by the CEO. Furthermore, section 269S(1) specifies that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
Under this legislation, there are no explicit offences, penalties, or civil/criminal consequences for breach outlined within the provided text. However, it is implied that non-compliance with the requirements of the Act or the terms of a TCO could lead to legal repercussions. For instance, if the CEO fails to follow the statutory requirements for making a TCO, or if an applicant submits a false or misleading application, these actions could potentially lead to legal consequences under the broader provisions of the Customs Act 1901 or other relevant laws. Nonetheless, the specific penalties for such breaches are not detailed in the provided explanatory statement.