EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840348
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 Pty Ltd applied for a TCO in respect of certain drill collars on 19 November 2008.
Instrument
TCO No 0840348 was made on 27 February 2009. It declares that those certain drill collars 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. 0840348 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0840348, issued in 2009, is a regulation under the Customs Act 1901, designed to facilitate tariff concessions for specific goods. This legislation addresses the need for streamlined processes in granting tariff concessions, ensuring that the Customs Act's provisions are effectively implemented. Enacted by the relevant authority in accordance with the Act, the primary objective of this instrument is to provide a clear and efficient pathway for businesses to apply for and obtain tariff concessions, thereby supporting economic activities by reducing customs duties on specified goods. The Tariff Concession Order No. 0840348, applied to certain drill collars, exemplifies this objective by granting a tariff concession that lowers the duty from 5% to free, provided no substitutable goods are produced in Australia. This order came into force on the date the application was lodged, aligning with the statutory requirements for prompt implementation of tariff concessions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty to certain goods. This act applies to entities and individuals seeking tariff concessions for goods not produced in Australia and not specified in section 269SJ of the Act, which outlines goods ineligible for such concessions. The geographic scope of this legislation is national, as it is a Commonwealth Act, and it applies to all entities and individuals engaged in importing goods into Australia. The Act does not specify exclusions or thresholds but requires the CEO to ensure that the application meets core criteria, particularly that no substitutable goods are produced in Australia on the day the application was lodged. The application process includes a public consultation phase where interested parties can submit objections, although in this instance, no submissions were received. The TCO does not disadvantage any person by affecting their rights as at the date of registration or impose liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0840348, as outlined in the explanatory statement, focus on the process and requirements for applying for and issuing a Tariff Concession Order (TCO). Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. The CEO must then determine if the application meets the core criteria, particularly whether the goods in question are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application meets these criteria, as per section 269C, the CEO is required to issue a written TCO. This TCO declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centred around the application and approval process for a TCO. The applicant must ensure that their goods do not fall within the exclusions listed in section 269SJ and that they provide sufficient evidence to the CEO that no substitutable goods are produced in Australia. The CEO, in turn, must assess the application against the core criteria, consult with relevant stakeholders as required by subsection 269K(1), and issue the TCO if the criteria are met. The explanatory statement indicates that Atlas Drilling Pty Ltd applied for a TCO on 19 November 2008 for certain drill collars, and the CEO issued TCO No. 0840348 on 27 February 2009 after confirming that no substitutable goods were produced in Australia.
The Customs Act 1901 and related instruments also specify the consequences of non-compliance with the provisions governing TCOs. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act could generally lead to enforcement actions by Customs officers, including the imposition of fines or other penalties as stipulated by the Act. Additionally, failure to adhere to the conditions set forth in a TCO could result in the revocation of the concession or other administrative penalties. The explanatory statement confirms that the TCO does not impose any liabilities on any person and that importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.