EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828156
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 steering assembly on 26 August 2008.
Instrument
TCO No 0828156 was made on 14 November 2008. It declares that those certain steering assembly 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. 0828156 is taken to have come into force on 26 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, as amended, includes provisions for the issuance of Tariff Concession Orders (TCOs) under Part XVA, which was enacted to streamline the process of applying for lower rates of customs duty on certain imported goods. The Tariff Concession Instrument No. 0828156 was introduced on 14 November 2008 by the Chief Executive Officer of Customs, pursuant to the authority granted under section 269F of the Act. This specific instrument was prompted by an application from Schlumberger Oilfield Australia for a TCO on certain steering assemblies, which was submitted on 26 August 2008. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria stipulated in section 269C of the Act. As a result, the instrument declares that the steering assemblies are subject to a zero rate of duty, down from the general rate of 5%. The instrument became effective on the date of the application, 26 August 2008, without imposing any liabilities on any person and preserving the rights of importers who can apply for duty refunds for goods imported since the effective date.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0828156, outlines a mechanism through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs). These orders apply to specific goods, lowering their customs duty rate to zero, provided that no substitutable goods are produced in Australia. The Act applies to any individual or entity that imports goods subject to a TCO, granting them the benefit of the reduced duty rate. The application of this legislation is federal, extending across the Commonwealth of Australia. However, it explicitly excludes certain goods, as detailed in section 269SJ of the Act, which cannot be the subject of a TCO. The scope of the Act may be further defined and expanded through subordinate instruments, ensuring that the application of tariff concessions is managed effectively and transparently. The TCO in question, concerning steering assemblies, came into force on the date the application was lodged, 26 August 2008, and does not retroactively disadvantage any party or impose new liabilities.
Key Provisions
The Tariff Concession Instrument No. 0828156, under the Customs Act 1901, establishes a lower customs duty rate for certain steering assemblies. Specifically, section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO), which can result in a tariff concession if certain criteria are met. In this case, Schlumberger Oilfield Australia applied for the concession on 26 August 2008 and, upon satisfaction that no substitutable goods were produced in Australia (section 269C), the CEO made the TCO on 14 November 2008, effective retroactively to the date of the application (subsection 269S(1)). This means that the steering assemblies in question now have a duty rate of free, down from the general rate of 5%.
Under the Customs Act 1901, the CEO is obligated to assess whether an application for a TCO meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO must also publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received, leading to the issuance of the TCO. Additionally, the Act stipulates that the TCO does not affect the rights of any person as at the date of registration (subsection 269S(2)), and thus, it does not impose any liabilities on any person.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil or criminal consequences for breaching the terms of a TCO. However, any breach of the general provisions of the Customs Act 1901 or associated regulations could lead to penalties as outlined elsewhere in the Act. For instance, general contraventions under the Act can result in fines and imprisonment, with specific penalties depending on the severity and nature of the breach. It is essential for entities subject to the Act to adhere to the specified procedures and conditions to avoid potential legal repercussions.