EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904324
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.
Esso Australia applied for a TCO in respect of certain electrical umbilical cables on 10 February 2009.
Instrument
TCO No 0904324 was made on 08 May 2009. It declares that those certain electrical umbilical cables 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. 0904324 is taken to have come into force on 10 February 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. 0904324 was enacted in 2009 as a measure under the Customs Act 1901 to address the issue of applying tariff concessions on specific goods, in this case certain electrical umbilical cables, imported into Australia. This legislative instrument was introduced to provide relief by allowing a lower rate of customs duty for these particular goods, facilitating more cost-effective imports and potentially boosting economic activity related to these goods. The instrument was created by the Chief Executive Officer of Customs, following an application by Esso Australia, and was made in accordance with the provisions outlined in Part XVA of the Customs Act 1901. The objective of this legislation is to ensure that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria necessary for the tariff concession to be granted. This approach aligns with the broader policy goal of supporting import activities by reducing financial burdens through duty concessions where appropriate.
Scope and Application
The Tariff Concession Instrument No. 0904324, made under the Customs Act 1901, applies to the specific category of electrical umbilical cables for which Esso Australia applied on 10 February 2009. This instrument, which came into force on the same date, allows for a lower rate of customs duty for these goods, effectively reducing the duty from the general rate of 5% to free. The Act facilitates the application process for tariff concessions by allowing individuals or entities to apply to the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act. The instrument’s creation hinges on the CEO’s determination that no substitutable goods were produced in Australia at the time of application, ensuring the concession does not undermine local production. The geographical scope of this Act is national, as it operates within the framework of the Customs Act 1901, impacting trade and customs duties across Australia. There are no exclusions or exemptions specified for this particular instrument, though the general criteria under the Act must be met. The application of this concession does not retroactively affect the rights or liabilities of any person other than the Commonwealth, meaning any existing duties or rights remain unaffected by the concession's implementation.
Key Provisions
The Tariff Concession Instrument No. 0904324 under the Customs Act 1901 provides a framework for the granting of Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods (s 269F). If a person applies for a TCO in respect of goods and the Chief Executive Officer of Customs (CEO) is satisfied that the application does not pertain to goods specified in section 269SJ of the Act, the CEO must assess whether the application meets the core criteria (s 269C). These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business on the date the application was lodged (s 269D, s 269E, s 269B). If the CEO determines that the application meets these criteria, they are required to make a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (s 269P(3)).
Entities and individuals subject to the provisions of the Customs Act 1901 have specific obligations when applying for a TCO. They must ensure that their application for a TCO is valid and that it pertains to goods not specified in section 269SJ of the Act. Additionally, they must provide any relevant information or evidence to support their application. The CEO, on their part, is obligated to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be granted (s 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice. Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO.
Failure to comply with the provisions of the Customs Act 1901 regarding the application and issuance of a TCO may result in civil or criminal consequences. The Act does not specify particular offences or penalties for non-compliance in this context. However, general provisions within the Act and related legislation may apply, including fines and imprisonment for offences involving the importation or exportation of goods. The specific penalties would depend on the nature and severity of the breach, as outlined in other relevant sections of the Customs Act 1901 and associated regulations.