EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913169
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 Resources applied for a TCO in respect of certain offshore vertical truss element on 21 April 2009.
Instrument
TCO No 0913169 was made on 10 July 2009. It declares that those certain offshore vertical truss element 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. 0913169 is taken to have come into force on 21 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 administration of customs and excise duties, and also establishes a mechanism for tariff concession orders. The Tariff Concession Instrument No. 0913169, made on 10 July 2009, aims to address the gap in providing relief on customs duties for specific goods that are not produced in Australia and for which there are no substitutable domestic goods. This instrument was introduced to facilitate the application process by Esso Australia Resources for a tariff concession on certain offshore vertical truss elements, ensuring that the application met the core criteria set out in the Customs Act 1901. The policy objective is to provide relief on customs duties for goods that are not produced domestically and for which there are no substitutable Australian-made alternatives, thereby supporting the importer's rights and potentially benefiting the industry by reducing the cost of imported goods.
Scope and Application
The Customs Act 1901, as amended and administered through Tariff Concession Orders (TCOs), applies to entities seeking tariff reductions on imported goods under certain conditions. Specifically, a TCO can be applied for by any person, but the Chief Executive Officer of Customs (CEO) must determine if the goods in question meet the core criteria set forth in the Act, which includes verifying that no substitutable goods are produced in Australia. The application process involves submitting a request for tariff concessions, and if approved, the goods specified in the TCO are granted a reduced duty rate, as illustrated in TCO No. 0913169 for certain offshore vertical truss elements. The Act's jurisdictional reach is national, and it extends to any goods imported into Australia, provided they comply with the statutory conditions and exclusions outlined in sections 269SJ and 269P of the Act. The application of the TCO is retroactive to the date of the application, but it does not impose liabilities on individuals or entities for actions taken prior to the registration date.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269P, and 269S of the Customs Act 1901, which establish the framework for Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269E). Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (a TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S outlines the commencement date of a TCO, which is the same as the date on which the application was lodged.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must assess applications for TCOs to determine if they meet the core criteria (section 269C). If the CEO is satisfied, they must issue a written order specifying the goods to which the TCO applies (section 269P(3)). Furthermore, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice.
The legislation includes provisions for offences and penalties for breaches, although specific penalties are not detailed in the explanatory statement. Generally, under Australian law, breaches of customs regulations can lead to both civil and criminal consequences. Civil penalties may include financial penalties or administrative actions, while criminal penalties can result in fines or imprisonment, depending on the severity of the breach. The maximum penalties for breaches of customs regulations can vary widely, but typically, serious offences can result in significant financial penalties and lengthy prison sentences.
The Tariff Concession Order (TCO) No. 0913169, made on 10 July 2009, provides a tariff concession for certain offshore vertical truss elements. The order declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods. The TCO came into effect on 21 April 2009, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth or disadvantage any person's rights as at the date of registration. Importers of these goods can apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.