EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824211
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 Ltd applied for a TCO in respect of certain line pipe on 31 July 2008.
Instrument
TCO No 0824211 was made on 24 October 2008. It declares that those certain line pipe 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. 0824211 is taken to have come into force on 31 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. Part XVA of the Act specifically addresses the mechanism by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This mechanism was introduced to address the gap in providing relief from customs duties on goods that are not produced domestically or for which suitable domestic alternatives do not exist. The policy objective is to facilitate the import of goods essential for industries where local production is not viable or efficient. Woodside Energy Ltd’s application for a TCO in respect of certain line pipe in July 2008 was processed under this scheme, resulting in Instrument TCO No. 0824211, which lowered the duty on these goods to zero, effective from the date of application. This legislative framework ensures that the CEO’s decision-making process includes opportunities for public consultation, although in this case, no submissions were received opposing the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to grant lower rates of customs duty on certain goods. This Act applies to any person who can apply for a TCO for goods not specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. The Act requires that the CEO must be satisfied that the application meets the core criteria, namely that no substitutable goods were produced in Australia on the date of the application. Once these criteria are met, a TCO is made, which provides a tariff concession to the specified goods. The application of the Act is national in scope, administered by the Commonwealth and impacting entities and individuals involved in the importation of goods affected by TCOs. The Act does not specify exclusions or thresholds within its primary text but allows for further details through subordinate instruments, ensuring flexibility in application. This legislation ensures that any person, other than the Commonwealth, will not be disadvantaged or imposed liabilities by the application of a TCO, thereby safeguarding the rights of importers and ensuring they can benefit from duty refunds on eligible goods imported after the TCO's effective date.
Key Provisions
The primary operative sections of the Customs Act 1901, as relevant to this Tariff Concession Order, include sections 269C, 269F, 269K, and 269S (1). Section 269F allows for the application of a Tariff Concession Order (TCO) for goods by any interested party, such as Woodside Energy Ltd in this case. Section 269C outlines the core criteria for the CEO to consider when determining whether an application for a TCO meets the necessary requirements, specifically whether no substitutable goods are produced in Australia on the day the application is lodged. Section 269K mandates the publication of a notice in the Gazette inviting submissions from any interested parties who may oppose the granting of the TCO, although in this instance, no submissions were received. Section 269S (1) states that a TCO is considered to have come into effect on the date the application for the TCO was lodged. In this scenario, TCO No. 0824211 is effective from 31 July 2008, the date Woodside Energy Ltd lodged their application.
The Customs Act 1901 imposes specific obligations on the CEO when handling a TCO application. The CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ, which excludes certain goods from TCO eligibility. The CEO must then determine whether the application meets the core criteria specified in section 269C. If satisfied, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted, as per section 269K. Additionally, the CEO must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 if the application meets the criteria. In the case of TCO No. 0824211, the CEO was satisfied that no substitutable goods were produced in Australia and, therefore, issued the order on 24 October 2008.
Failure to comply with the requirements and obligations set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not explicitly outline specific offences or penalties for breaches related to TCO applications, the general framework of the Customs Act 1901 provides for both civil and criminal penalties. Civil penalties may include fines, and in more severe cases, criminal penalties could apply, including imprisonment, depending on the nature and severity of the breach. The exact penalties are not detailed in this specific explanatory statement but are governed by the broader provisions of the Customs Act 1901 and related regulations.