EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840470
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.
Smith International Pty Ltd applied for a TCO in respect of certain oil and gas well fishing grapple on 20 November 2008.
Instrument
TCO No 0840470 was made on 27 February 2009. It declares that those certain oil and gas well fishing grapple 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. 0840470 is taken to have come into force on 20 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. 0840470 was enacted under the Customs Act 1901 to address the need for a lower rate of customs duty for specific goods, in this case, certain oil and gas well fishing grapples. The instrument was introduced to facilitate tariff concessions for goods that meet certain criteria, specifically when no substitutable goods are produced in Australia. This concession aims to provide relief to importers by reducing the customs duty from the general rate of 5% to free of charge, thereby promoting economic efficiency and competitiveness. The instrument was created by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act 1901, and it came into effect on the date the application was lodged, 20 November 2008. The instrument ensures that no pre-existing rights or liabilities are adversely affected, thus maintaining legal certainty and fairness.
Scope and Application
The Tariff Concession Instrument No. 0840470 applies to certain oil and gas well fishing grapples, providing a lower rate of customs duty as specified in the Customs Act 1901. This Act applies to persons who are eligible to apply for tariff concessions under section 269F, provided the goods in question are not those specified in section 269SJ, which are ineligible for such concessions. The application process involves a review by the Chief Executive Officer of Customs to determine whether the goods in question can be considered substitutable with any goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. If no such substitutable goods exist, a Tariff Concession Order (TCO) is issued, as per section 269P(3). This particular TCO, effective from 20 November 2008, was made in response to an application by Smith International Pty Ltd on 27 February 2009, and it applies the general rate of duty of 5% to the specified goods. The Act also mandates the publication of the TCO application in the Gazette, inviting any interested party to lodge a submission, although in this case, no submissions were received. The TCO does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0840470 under the Customs Act 1901 (the Act) sets out the specific requirements and conditions for the application and granting of a Tariff Concession Order (TCO). According to section 269F, any person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application is deemed valid, the CEO must determine whether it meets the core criteria outlined in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on parties involved in the TCO process include the CEO's responsibility to publish a notice in the Gazette as soon as practicable after accepting a valid TCO application, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No. 0840470, no submissions were received in response to this invitation. Additionally, section 269S(1) mandates that a TCO is deemed to come into force on the day the application was lodged, which for TCO No. 0840470 was 20 November 2008. This commencement date ensures that the rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date.
The Act also includes provisions to protect the rights of persons other than the Commonwealth. Specifically, section 269S(1) stipulates that a TCO does not affect the rights of such persons as at the date of registration so as to disadvantage them or impose any liabilities in respect of actions taken before the registration date. This ensures that the rights of importers will be beneficially affected, while no liabilities will be imposed on any person, including the Commonwealth, under this TCO. In terms of duty rates, the general rate for the specified goods is 5%, but the rate for goods subject to the TCO is free.
In terms of potential breaches and the consequences thereof, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, any failure to adhere to the conditions set out in the TCO or the Act could result in legal challenges or administrative actions. For instance, if a TCO is found to have been improperly granted or if there is evidence of fraud or misrepresentation in the application process, legal action could be taken against the party responsible. The exact penalties or consequences would depend on the nature and severity of the breach, and could potentially involve fines, penalties, or other legal sanctions as determined by the relevant authorities.