EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900638
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.
Schlumberger Oilfield Australia Pty Ltd applied for a TCO in respect of certain gas well & oil burners on 13 January 2009.
Instrument
TCO No 0900638 was made on 14 April 2009. It declares that those certain gas well & oil burners 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. 0900638 is taken to have come into force on 13 January 2009.
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. 0900638 was enacted in 2009 under the Customs Act 1901 to address the issue of granting tariff concessions for specific imported goods, thereby facilitating trade and reducing the financial burden on businesses importing these goods. This instrument was introduced to streamline the application process for tariff concessions, ensuring that the Chief Executive Officer of Customs could effectively assess and grant requests for lower customs duty rates on goods not produced in Australia. The policy objective behind this legislation is to support economic efficiency and competitiveness by allowing duty-free importation of certain goods that are not domestically produced, thus benefiting businesses and consumers alike.
The instrument was developed and authorised by the Parliament of Australia, reflecting a commitment to fostering a conducive environment for international trade. The Customs Act 1901 provides the legislative framework within which the CEO can make Tariff Concession Orders, ensuring that the process is transparent and subject to public scrutiny. The explanatory statement highlights that Schlumberger Oilfield Australia Pty Ltd successfully applied for a tariff concession on specific gas well and oil burners, which now enjoy a zero percent duty rate instead of the general 5 percent. This concession came into effect on 13 January 2009, the date the application was lodged, and no submissions were received in opposition to the concession, indicating broad acceptance of the measure.
Scope and Application
The Customs Act 1901, as outlined in the Tariff Concession Instrument No. 0900638, pertains to the process of applying for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on specific goods. This Act applies to individuals and entities that seek to import goods that are not produced in Australia in the ordinary course of business and which meet the core criteria set out in the legislation. The Act allows the Chief Executive Officer of Customs to make these concession orders, thus facilitating the importation of certain goods with reduced duty rates. The geographic and jurisdictional reach of this Act is national, as it applies across Australia in accordance with the provisions of the Customs Act 1901. The Act does not specify exclusions or exemptions; however, it does exclude certain goods as per section 269SJ. The Act also provides for the extension of its application through subordinate instruments, such as regulations, which may further detail the criteria and processes for applying for and granting TCOs.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ of the Customs Act 1901. These sections establish the criteria for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). Section 269F allows a person to apply for a TCO in respect of goods, while section 269C sets out the core criteria that must be met for the CEO to grant such an order. The CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269B, 269D, and 269E. If the CEO determines that the application meets the core criteria, they are required by section 269P to issue a written order (a TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by this Act on parties and entities include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. The CEO must also ensure that the TCO does not affect the rights of a person, other than the Commonwealth, in a way that disadvantages that person or imposes liabilities in respect of anything done or omitted to be done before the date of registration. Importers of the 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, under paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly state any offences, penalties, or civil or criminal consequences for breach. However, it is implied that any failure to comply with the obligations set out in the Act, such as the CEO not publishing the required notice in the Gazette or the improper granting of a TCO, could potentially result in legal challenges or administrative penalties. The maximum penalties for breaches of the Customs Act 1901 are generally set out in other parts of the Act and may include fines and imprisonment, depending on the nature and severity of the offence.