EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909915
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 applied for a TCO in respect of certain hydraulically controlled valves on 23 March 2009.
Instrument
TCO No 0909915 was made on 05 June 2009. It declares that those certain hydraulically controlled valves 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. 0909915 is taken to have come into force on 23 March 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for the imposition of customs duties on imported goods. In 2009, the Customs Act was amended to introduce Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods. This was aimed at addressing the gap in the tariff regime where certain imported goods could face prohibitively high tariffs, potentially stifling local industries and consumers. The Explanatory Statement for Tariff Concession Instrument No. 0909915 clarifies the process by which the Chief Executive Officer of Customs may grant such concessions, provided the goods are not substitutable by domestic production. The policy objective is to ensure that Australian industries and consumers benefit from tariff relief, encouraging competition and economic efficiency. The instrument in question, TCO No. 0909915, granted Schlumberger Oilfield Australia a concession on certain hydraulically controlled valves, reducing their duty from 5% to free. This was effective from the date the application was lodged, 23 March 2009.
Scope and Application
The Tariff Concession Instrument No. 0909915 under the Customs Act 1901 applies specifically to certain hydraulically controlled valves, with Schlumberger Oilfield Australia being the applicant for this concession. This instrument, effective from 23 March 2009, pertains to the Commonwealth jurisdiction and is intended to reduce the customs duty on these valves from the general rate of 5% to zero. The application of this instrument is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, in accordance with the criteria set out in the Act. Notably, the instrument does not disadvantage any person by affecting their rights as they stood on the date of registration nor does it impose any liabilities on individuals or entities other than the Commonwealth. The instrument also allows for the refund of duties paid on the specified goods imported since the effective date, thereby providing a benefit to importers. This concession does not extend to goods specified in section 269SJ of the Customs Act 1901, which are explicitly excluded from such tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0909915, under the Customs Act 1901, allows for the reduction or exemption of customs duty on certain goods. Specifically, section 269F (2) of the Act enables a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided these goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. When a TCO application is made, the CEO must assess whether it meets the core criteria as outlined in section 269C of the Act. These criteria are satisfied if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, with definitions for these terms provided in sections 269D, 269E, and 269F of the Act.
The obligations imposed on the parties by this legislation are primarily procedural. The CEO must ensure that applications for TCOs are assessed against the core criteria, and if satisfied, must make a written order declaring the goods subject to the TCO. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from interested parties, although this step does not necessarily result in submissions being received. The Act also mandates that the TCO comes into force on the day the application is lodged, as specified in subsection 269S(1), ensuring that any rights of importers are protected from retroactive disadvantage.
In terms of enforcement, the Act does not explicitly detail offences or penalties for non-compliance with TCOs or their application process. However, any breach of the conditions set by a TCO or failure to adhere to the process outlined in the Customs Act 1901 could potentially lead to legal consequences. The general legal framework under the Customs Act might impose penalties for incorrect declarations, fraud, or other breaches, but specific penalties for TCO-related breaches are not detailed in the explanatory statement. It is essential for applicants and importers to ensure compliance with the terms of their TCO to avoid any potential legal repercussions.