EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824442
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 steam heat exchangers on 01 August 2008.
Instrument
TCO No 0824442 was made on 31 October 2008. It declares that those certain steam heat exchangers 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. 0824442 is taken to have come into force on 01 August 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 for the implementation of a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This scheme was introduced to address the problem of ensuring that Australian businesses have access to necessary goods at reduced rates of customs duty, provided that no substitutable goods are produced in Australia. The Act allows for a lower rate of customs duty to apply to goods that are the subject of a TCO. Schlumberger Oilfield Australia applied for a TCO in respect of certain steam heat exchangers, and following the application's acceptance by the CEO, TCO No. 0824442 was issued on 31 October 2008. The instrument declares that these steam heat exchangers are subject to a duty rate of free, as the CEO was satisfied that no substitutable goods were produced in Australia. The TCO was taken to have come into force on the day the application was lodged, which was 1 August 2008, and it does not affect the rights of persons to disadvantage them or impose liabilities for actions taken prior to the registration date.
Scope and Application
The Tariff Concession Instrument No. 0824442 applies to certain steam heat exchangers and is made under Part XVA of the Customs Act 1901. It specifically pertains to goods for which Schlumberger Oilfield Australia applied for a Tariff Concession Order (TCO) on 1 August 2008. The Act empowers the Chief Executive Officer of Customs to grant such orders if no substitutable goods are produced in Australia and if the application meets the core criteria set out in the Act. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901 which is a Commonwealth Act. The TCO, once made, applies retroactively to the date of the application, which in this case is 1 August 2008. Importantly, the TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth and does not impose any new liabilities. Importers of the specified goods can benefit from this order by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation concern the process and criteria for making Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Specifically, section 269F allows for the application of a TCO by a person to the Chief Executive Officer of Customs (CEO). The CEO must then determine if the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, a TCO is made under section 269P(3), effectively granting a lower rate of customs duty on the specified goods.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that applications for TCOs are assessed against the core criteria outlined in the Act. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why a TCO should not be made (subsection 269K(1)). The CEO must also consider any submissions received in response to this notice before making a decision on the application. Furthermore, the Act ensures that the TCO does not affect the rights of any person adversely, as per subsection 269S(1), meaning that no existing liabilities or rights are imposed retroactively.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences or penalties for failing to comply with the provisions related to TCOs. However, non-compliance with the conditions set out in the Act could potentially lead to disputes or challenges regarding the validity of the TCO. Importers who benefit from a TCO may be required to adhere to the terms and conditions specified in the order, and any failure to do so could result in legal actions or penalties as outlined in other sections of the Customs Act 1901 or related legislation. The specific penalties for such breaches would depend on the nature of the non-compliance and any relevant regulations or subsequent legislative provisions.