EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909920
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 Pty Ltd applied for a TCO in respect of certain winch drum chain drive on 24 March 2009.
Instrument
TCO No 0909920 was made on 12 June 2009. It declares that those certain winch drum chain drive 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. 0909920 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0909920 was enacted under the Customs Act 1901, aiming to provide tariff concessions for specific goods that are not produced domestically. The instrument was introduced to address the problem of imported goods for which no suitable Australian-made alternatives exist, thereby ensuring that Australian consumers and businesses have access to competitively priced goods. The instrument was developed and approved by the Chief Executive Officer of Customs, as mandated by the Customs Act. The policy objective underpinning this legislation is to facilitate the importation of goods at a lower customs duty rate, thereby encouraging trade and supporting economic growth without disadvantaging existing rights or imposing new liabilities on individuals or entities.
The process of implementing this tariff concession involves an application by interested parties, followed by an assessment by the CEO to determine if the application meets the core criteria outlined in the Act. If the CEO is satisfied that the application complies with these criteria, a Tariff Concession Order is issued, which comes into effect from the date the application was lodged. In this instance, Schlumberger Oilfield Pty Ltd successfully applied for a tariff concession on certain winch drum chain drives, resulting in a reduction of the duty rate from 5% to free. The legislation ensures that the rights of importers are preserved and that they can apply for duty refunds for goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0909920, made under the Customs Act 1901, applies to specific winch drum chain drives, as requested by Schlumberger Oilfield Pty Ltd. The instrument facilitates tariff concessions, allowing for a lower rate of customs duty on these goods, with the rate effectively being free, as opposed to the general rate of 5%. This concession is contingent on the Chief Executive Officer of Customs determining that no substitutable goods were produced in Australia at the time the application was lodged, as stipulated in section 269C of the Act. The instrument extends to the entirety of Australia and its application is not restricted by geographic or jurisdictional boundaries. However, it excludes certain goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The instrument, which came into effect on the date the application was lodged, does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0909920, under the Customs Act 1901, specifies that certain winch drum chain drives are eligible for a tariff concession order (TCO) (section 269P(3)). This means that these goods are subject to a lower rate of customs duty as stipulated in the TCO. The general duty rate for these goods is 5%, but under the TCO, the rate is set to free (section 269P(3)). This change was made because, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C).
The obligations imposed by the Act on the parties involved require the Chief Executive Officer of Customs (CEO) to evaluate TCO applications to determine if they meet the core criteria. If an application is deemed to meet the criteria, the CEO must issue a written TCO order (section 269P(3)). Additionally, upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be granted (subsection 269K(1)). In this case, no submissions were received, indicating that no objections were lodged against the application.
Breaches of the provisions of the Customs Act 1901, including failure to comply with the conditions of a TCO, can result in various consequences. Specifically, any person who contravenes the provisions of the Act may be subject to penalties as prescribed under the Act. For instance, section 271 of the Act outlines potential penalties for breaches, which could include fines or imprisonment depending on the severity of the offence. It is essential for all parties involved to adhere to the requirements set out in the Act to avoid any legal repercussions.