EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835793
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.
Helix Energy Solutions applied for a TCO in respect of certain hot stab connector assenblies on 16 October 2008.
Instrument
TCO No 0835793 was made on 14 January 2009. It declares that those certain hot stab connector assenblies 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. 0835793 is taken to have come into force on 16 October 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 Tariff Concession Instrument No. 0835793 under the Customs Act 1901, enacted in 2009, addresses the issue of facilitating trade by providing tariff concessions for specific goods that are not produced domestically, thus ensuring competitive market conditions. This instrument was introduced to support the policy objective of fostering economic efficiency and competitiveness by allowing the importation of goods at reduced customs duty rates when no suitable Australian-made alternatives exist. The Customs Act 1901 allows the Chief Executive Officer of Customs to issue Tariff Concession Orders if certain criteria are met, including the absence of substitutable goods produced in Australia. The instrument was made in response to an application by Helix Energy Solutions for tariff concessions on certain hot stab connector assemblies, which were granted as no similar goods were being produced in Australia at the time. The instrument effectively reduced the duty on these goods from 5% to free, thereby benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession's enactment.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that provide a lower rate of customs duty on certain goods. The Act applies to any individual or entity seeking to import goods that qualify for a tariff concession, provided these goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The core criteria for a TCO are outlined in sections 269C, 269B, and 269D, which require that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. The instrument in question, TCO No 0835793, was made on 14 January 2009 and applies to certain hot stab connector assemblies, reducing the duty from 5% to free, effective from 16 October 2008. The TCO was issued after it was determined that no substitutable goods were produced in Australia, and it does not affect any pre-existing rights or impose liabilities on anyone other than the Commonwealth. The CEO is mandated to publish a notice in the Gazette inviting submissions against the TCO, although none were received in this instance.
Key Provisions
The Tariff Concession Order No. 0835793, made under the Customs Act 1901, pertains to the application of a lower rate of customs duty to certain hot stab connector assemblies. Specifically, section 269P(3) of the Act mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order that applies a prescribed item of Schedule 4 to the Customs Tariff Act 1995 to the goods in question. In this case, the TCO was made on 14 January 2009, and it specifies that the hot stab connector assemblies are subject to item 50 of Schedule 4, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes certain obligations on the parties involved. Under section 269C, an application for a TCO is deemed to meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms “substitutable goods” and “ordinary course of business” are defined in sections 269D and 269E, respectively. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. Although no submissions were received in response to this notice, the process ensures transparency and opportunity for input.
Entities governed by this legislation face specific requirements. Importers of the affected goods can benefit from a refund of duty on goods imported since the TCO was taken to have come into force on 16 October 2008, as per paragraph 126(1)(r) of the Regulations. This refund provision is beneficial for importers, while the TCO does not impose any liabilities on any person, ensuring that the rights of those other than the Commonwealth are not disadvantaged.
There are no explicit offences or penalties outlined in this particular TCO; however, breaches of the Customs Act 1901, such as making false statements or evading duty, can lead to significant civil and criminal consequences. Under the Act, penalties for such offences can include fines of up to $22,200 for individuals and up to $111,000 for corporations, depending on the severity and intent of the breach. These provisions ensure compliance and enforcement of the tariff concession scheme.