EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911064
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 applied for a TCO in respect of certain spanner joints on 01 April 2009.
Instrument
TCO No 0911064 was made on 19 June 2009. It declares that those certain spanner joint 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. 0911064 is taken to have come into force on 01 April 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 Australian Parliament, provides a framework for the regulation of customs duties and the administration of customs and excise in Australia. The Act was introduced to address the need for streamlined and effective customs duty processes to facilitate international trade. Part XVA of the Customs Act 1901 facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for reduced customs duty rates on certain goods, provided they meet specific criteria. The policy objective of this legislative framework is to encourage economic efficiency and international competitiveness by ensuring that certain goods can be imported at a lower duty rate, thereby reducing costs for businesses and consumers. The Tariff Concession Instrument No. 0911064, made on 19 June 2009, is an example of such an order that was introduced to provide tariff concessions on certain spanner joints, effectively reducing their duty rate from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0911064 applies to goods specified in the instrument, namely certain spanner joints, and is subject to the provisions of the Customs Act 1901. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which effectively lowers the rate of customs duty for the goods specified in the TCO. This instrument was created following an application by Schlumberger Oilfield on 01 April 2009, and it came into force on the same date. The application of the TCO is limited to the goods specified in the instrument and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. The TCO allows for a refund of duty on the specified goods imported since the date the TCO is taken to have come into force. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269B, 269D, 269E, 269F, and 269P(3) of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). Section 269F enables an application for a TCO to be made to the Chief Executive Officer of Customs (CEO). If the application is deemed valid, the CEO is required under section 269C to assess whether it meets the core criteria. This assessment hinges on whether substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as outlined in sections 269B, 269D, and 269E. If the application fulfils these criteria, the CEO must then make a written order, or TCO, declaring that the goods in question are subject to a specific rate of duty as specified in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act are primarily on the CEO, who must assess the validity of TCO applications and make decisions based on the statutory criteria. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be granted. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person, apart from the Commonwealth, as of the date of registration. This includes ensuring that the TCO does not impose any liabilities on any person other than the Commonwealth for actions taken before the TCO was registered.
Failure to comply with the requirements set out in this Act can lead to significant consequences. While the explanatory statement does not explicitly detail the penalties for breaches, under Australian law, breaches of the Customs Act 1901 can result in both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment, reflecting the seriousness with which such breaches are treated. The specific penalties would depend on the nature and severity of the breach, as well as any relevant case law or additional statutory provisions.