EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0830154
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.
Sides Drilling Contractors Pty Ltd applied for a TCO in respect of certain self elevating platforms on 08 September 2008.
Instrument
TCO No 0830154 was made on 28 November 2008. It declares that those certain self elevating platforms 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. 0830154 is taken to have come into force on 08 September 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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. The Act aims to provide a mechanism for reducing customs duty on certain goods, facilitating trade by lowering the financial burden on importers. Specifically, section 269F of the Act allows for applications to be made for TCOs on goods not specified in section 269SJ, which lists goods ineligible for such concessions. A TCO application is deemed to meet the core criteria if no substitutable goods are produced in Australia on the date the application is lodged, as stipulated in section 269C. The policy objective is to encourage the importation of goods by making them more cost-effective, thereby supporting economic activity and market access without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods, contingent on certain criteria being met. An application for a TCO can be made by any person, and if the CEO determines that the application is valid and pertains to goods not explicitly excluded by section 269SJ, they must then assess whether the application meets the core criteria outlined in section 269C of the Act. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. If these conditions are satisfied, a TCO is issued, declaring that the specified goods will be subject to a lower rate of duty as prescribed in the Customs Tariff Act 1995. The TCO applies from the date the application is lodged, and it does not affect any pre-existing rights or impose liabilities on any party except the Commonwealth. Importers of the goods in question can apply for a refund of duties paid since the TCO's effective date.
Key Provisions
The key operative sections of the Customs Act 1901, as detailed in Tariff Concession Instrument No. 0830154, involve provisions that allow for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ as ineligible for such concessions. Section 269C outlines the core criteria that the CEO must be satisfied with for the application to proceed, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a zero rate of duty instead of the general rate.
The obligations imposed on the parties by this legislation include the requirement for applicants to ensure their applications meet the core criteria specified in sections 269C and 269F of the Customs Act 1901. The CEO, on the other hand, is obligated to review applications, determine whether they meet the necessary criteria, and make a decision on whether to issue a TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons against the making of the TCO. This transparency measure ensures that all stakeholders have the opportunity to voice their concerns or objections before a decision is made.
Should there be any breaches of the provisions outlined in the Customs Act 1901 or the Tariff Concession Instrument, there are potential civil and criminal consequences. For instance, providing false information in an application could lead to penalties under the general laws of the Commonwealth, including fines and imprisonment. The specific penalties are not detailed in the Explanatory Statement but typically align with the severity of the offence, as per the Commonwealth's legal framework. The Tariff Concession Instrument itself does not impose additional liabilities on any person and does not affect the rights of individuals or entities as at the date of registration, except to beneficially affect the rights of importers who can apply for duty refunds on goods imported since the TCO came into force.