EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825351
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 vertical surge tanks on 06 August 2008.
Instrument
TCO No 0825351 was made on 24 October 2008. It declares that those certain vertical surge tanks 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. 0825351 is taken to have come into force on 06 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 was enacted to establish a comprehensive framework for the administration of customs and excise duties in Australia, addressing the need for streamlined and regulated processes surrounding the importation and exportation of goods. A specific feature of this Act is the establishment of Tariff Concession Orders (TCOs) under Part XVA, which allows for reduced customs duty rates on certain goods. This legislative instrument was introduced to address the issue of facilitating trade and economic efficiency by providing tariff concessions on specific goods, thus promoting competitive advantages for businesses that rely on importing certain products.
The Tariff Concession Instrument No. 0825351, enacted by the Chief Executive Officer of Customs in accordance with the Customs Act 1901, aims to provide tariff concessions to Schlumberger Oilfield Australia for certain vertical surge tanks. The policy objective is to ensure that these goods, which are not produced in Australia and for which no suitable substitutes are available domestically, benefit from a reduced customs duty rate. The instrument was introduced following an application by Schlumberger Oilfield Australia and after no objections were raised during the consultation period, as required by the Act. The TCO was effective from the date of the application, ensuring that no existing rights or liabilities of non-Commonwealth entities were adversely affected.
Scope and Application
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs), which apply lower rates of customs duty to specified goods. These orders are made by the Chief Executive Officer of Customs and apply to goods that are not substitutable by Australian-produced goods and do not fall under the exclusions listed in section 269SJ of the Act. The Act's application is national in scope, covering the entire Commonwealth of Australia. Schlumberger Oilfield Australia's application for a TCO in respect of certain vertical surge tanks was approved, resulting in Instrument TCO No. 0825351, which reduces the duty rate from 5% to free, effective from 6 August 2008. This TCO does not disadvantage or impose liabilities on any person except the Commonwealth and provides benefits to importers by allowing them to apply for refunds of duties paid on the specified goods imported since the effective date. The Act's application can be further detailed or restricted through subordinate instruments, though none are specified in this instance.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows an individual to apply to the CEO for a TCO concerning specific goods, provided these goods are not listed in section 269SJ, which details goods ineligible for TCOs. The CEO evaluates whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the application date. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) respectively. If the CEO determines that the application meets these criteria, they are mandated to issue a written TCO, as outlined in section 269P(3), specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
Entities or individuals applying for a TCO must ensure their application complies with the requirements outlined in sections 269C and 269F. The CEO is obligated to evaluate each application against the criteria in section 269C and to make a decision based on this evaluation. If a TCO is granted, the CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions against the TCO, as per subsection 269K(1). The TCO’s effective date is the date on which the application was lodged, as per subsection 269S(1). The TCO does not affect the rights of any person except the Commonwealth, ensuring that no one is disadvantaged or imposed with new liabilities for actions taken before the TCO’s registration date.
The Act does not explicitly detail specific offences or penalties for non-compliance with the TCO provisions. However, the overarching legal framework under which the Customs Act operates includes various provisions that could apply to breaches of customs regulations. For instance, under the Crimes Act 1914, serious breaches of customs laws may result in criminal penalties, including fines and imprisonment. Civil penalties might also apply depending on the nature and severity of the breach, potentially involving significant fines or other monetary penalties. These penalties would be determined based on the specific circumstances of the breach and the relevant legal provisions in other statutes.
In summary, the Customs Act 1901, through its TCO provisions, provides a structured process for applying for and granting tariff concessions on specific goods, ensuring compliance with stringent criteria. The obligations on the CEO include evaluating applications, publishing notices in the Gazette, and issuing TCOs when appropriate. While specific penalties for non-compliance are not detailed in the TCO provisions themselves, general provisions within the legal framework provide for criminal and civil penalties for breaches of customs regulations.