EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839269
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.
Atlas Drilling applied for a TCO in respect of certain drill pipes on 11 November 2008.
Instrument
TCO No 0839269 was made on 06 February 2009. It declares that those certain drill pipes 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. 0839269 is taken to have come into force on 11 November 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 provide for the collection of customs duties and other charges on goods imported into Australia, amongst other purposes. The Customs (Tariff Concession Instrument No. 0839269) Order 2009 was made under the Customs Act to address the problem of ensuring that tariff concessions are granted appropriately to support the efficient import of goods that are not produced in Australia. The order was made by the Chief Executive Officer of Customs, acting under the authority granted by the Customs Act, and aims to facilitate the import of certain goods by granting tariff concessions. This order is designed to benefit importers by potentially reducing the duty on specific goods, in this case certain drill pipes, when no suitable substitute goods are produced in Australia. The order came into force on 11 November 2008, the date the application was lodged, and does not affect any existing rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically through Part XVA, allows for the implementation of Tariff Concession Orders (TCOs) which apply lower rates of customs duty to certain goods. These orders are administered by the Chief Executive Officer of Customs and are subject to certain conditions and criteria set out in the Act. Any person can apply for a TCO, provided that the goods in question are not specified in section 269SJ of the Act as those ineligible for such concessions. The application process requires the CEO to verify that no substitutable goods are produced in Australia at the time of application, as defined by sections 269C and 269D of the Act. This instrument applies nationally, covering all entities involved in the importation of the specified goods. The TCO in question, No. 0839269, was made effective on 11 November 2008, when Atlas Drilling applied for the concession on certain drill pipes, resulting in a reduction of duty from 5% to free. The TCO does not affect any existing rights or liabilities incurred before its effective date, but it does allow for potential duty refunds for importers of these goods since that date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0839269, under the Customs Act 1901, establish the framework for the application and granting of Tariff Concession Orders (TCOs) (s 269C, s 269F, s 269K(1)). These sections require that a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (s 269F). The CEO must then decide whether 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 (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) that declares the goods subject to the application (s 269P(3)). This particular TCO No. 0839269, made on 6 February 2009, applies to certain drill pipes and declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5% (s 269P(3)).
The obligations and requirements imposed by the Customs Act 1901 on the parties or entities it governs include ensuring that any application for a TCO is made in accordance with the provisions outlined in the Act (s 269F). The CEO must assess whether the application meets the core criteria, particularly focusing on whether substitutable goods were produced in Australia on the day the application was lodged (s 269C). Additionally, the CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made (s 269K(1)). In the case of TCO No. 0839269, no submissions were received in response to this invitation. The TCO also stipulates that it does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose any liabilities (s 269S(1)).
Any breach of the provisions outlined in the Customs Act 1901 may result in civil or criminal consequences. While specific offences, penalties, or consequences are not detailed in the explanatory statement, general provisions of the Act would apply. These could include fines, imprisonment, or other penalties as prescribed by the relevant laws. The maximum penalties for breaches of customs-related offences can vary, but they often include significant fines and potential imprisonment terms, depending on the severity and nature of the breach.
The Tariff Concession Instrument No. 0839269, under the Customs Act 1901, provides a clear pathway for the application and granting of TCOs for certain goods, ensuring that these goods are subject to a lower rate of customs duty. The obligations placed on applicants and the CEO are clearly defined, with a focus on ensuring that no substitutable goods are produced in Australia at the time of application. The Act also outlines the process for publication and potential submissions, ensuring transparency and fairness in the TCO process. Any breach of these provisions may result in significant civil or criminal penalties, reinforcing the importance of compliance with the Act’s requirements.