EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0822669
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 applied for a TCO in respect of certain marine fenders on 21 July 2008.
Instrument
TCO No 0822669 was made on 10 October 2008. It declares that those certain marine fenders 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. 0822669 is taken to have come into force on 21 July 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. 0822669 was enacted under the Customs Act 1901 to provide a lower rate of customs duty for certain marine fenders, as requested by Woodside Energy. This instrument was introduced to address the problem of potentially higher import costs for these specific goods, which could otherwise impede their availability and use within Australia. The instrument was developed in response to an application by Woodside Energy on 21 July 2008, and it was registered on 10 October 2008. The policy objective is to ensure that the application of tariff concessions does not disadvantage any party while potentially benefiting importers by reducing their duty costs. The instrument came into effect on the date the application was lodged, as per the provisions of the Customs Act.
Scope and Application
The Customs Act 1901, as detailed in the Tariff Concession Instrument No. 0822669, applies to the application process for Tariff Concession Orders (TCOs) concerning specific goods for which a lower rate of customs duty is sought. This legislation empowers the Chief Executive Officer of Customs to assess and grant applications for tariff concessions provided the goods do not fall under the exclusions listed in section 269SJ and meet the core criteria outlined in section 269C. The scope of the Act encompasses entities or individuals who apply for these concessions, focusing on the production and substitution of goods within Australia. The Act's jurisdiction is national, operating under the Commonwealth's authority. Notably, the Act does not impose any new liabilities or disadvantage existing rights of any person, other than the Commonwealth, and it allows for the refund of duties on goods imported since the TCO's effective date. The application of this legislation can be further refined or expanded through subordinate instruments, thereby extending or restricting its application as necessary.
Key Provisions
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The main operative sections, such as section 269C and section 269F, require that an application for a TCO must meet core criteria, including that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This provision means that if the CEO determines the application meets these criteria, they must issue a TCO, effectively reducing the customs duty on the specified goods. For example, TCO No. 0822669 was issued on 10 October 2008 for certain marine fenders, lowering their duty rate to free from 5% (section 269P(3)).
The obligations imposed by the Act include ensuring that the CEO publishes a notice in the Gazette inviting submissions regarding the TCO application, as stipulated in subsection 269K(1). Additionally, the CEO must assess whether the application meets the core criteria for issuing a TCO, such as the absence of substitutable goods produced in Australia on the day the application was lodged (section 269C). In this case, the CEO did not receive any submissions opposing the TCO for marine fenders.
Under the Customs Act 1901, breaches of the requirements for issuing TCOs can lead to civil or criminal consequences. While the explanatory statement does not detail specific penalties, breaches of customs regulations can generally result in fines or imprisonment. For instance, the maximum penalties for customs-related offences can be substantial, depending on the severity and intent of the breach. Importers can also apply for a refund of duty on goods imported since the TCO came into force, without any new liabilities imposed (section 126(1)(r) of the Regulations).
The TCO does not affect the rights of persons (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected by the reduced duty rate. In this case, the TCO does not impose any liabilities on any person and the rights of importers will be beneficially affected.