EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915575
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.
Weatherford Drilling International Aust Pty Ltd applied for a TCO in respect of certain drilling rigs oil gas geo on 08 May 2009.
Instrument
TCO No 0915575 was made on 31 July 2009. It declares that those certain drilling rigs oil gas geo 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. 0915575 is taken to have come into force on 08 May 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. 0915575, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods by providing a mechanism for reduced customs duties. This legislation was introduced to facilitate the importation of certain drilling rigs oil gas geo, for which Weatherford Drilling International Aust Pty Ltd applied on 8 May 2009. The instrument, effective from the same date, was made on 31 July 2009, following the Chief Executive Officer of Customs' determination that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The primary objective of this legislation, as outlined in the explanatory statement, is to provide tariff relief to importers, ensuring they are not disadvantaged and can apply for refunds of duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0915575 under the Customs Act 1901 applies to specific goods, in this case certain drilling rigs oil gas geo, which are subject to a Tariff Concession Order (TCO). The Act allows for the application of a lower rate of customs duty to goods that are the subject of a TCO, provided the application meets the core criteria outlined in the Act. This particular TCO was applied for by Weatherford Drilling International Aust Pty Ltd on 08 May 2009 and was made on 31 July 2009, declaring that the certain drilling rigs oil gas geo are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free instead of the general rate of 5%. The application of this TCO is national in scope, extending across Australia, and it came into force on the date the application was lodged, 08 May 2009. Notably, the TCO does not affect the rights of any person other than the Commonwealth in a way that would disadvantage them or impose liabilities for actions taken prior to the registration of the TCO.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0915575, as referenced in the Customs Act 1901, pertain to the application and approval process for Tariff Concession Orders (TCOs). Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to specific goods. Section 269C stipulates that the CEO must decide whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia at the time the application was lodged, as defined by section 269D and section 269E of the Act. If the application meets these criteria, the CEO must then issue a written order under section 269P(3), effectively declaring the goods to which the TCO applies.
The Act imposes several obligations on the parties involved. Firstly, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO, as per subsection 269K(1). The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Moreover, the CEO must consider whether the goods in question are substitutable and produced in Australia, as defined by sections 269D and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they are obligated to make the TCO.
In terms of penalties and consequences for breach, the Act does not explicitly detail specific offences or penalties related to the issuance or misuse of a TCO. However, any general breach of the Customs Act 1901 could potentially result in civil or criminal consequences, depending on the nature and severity of the breach. The penalties for such breaches could include fines or imprisonment, as outlined in other relevant sections of the Customs Act 1901 or related legislation. Importantly, the TCO itself does not impose any new liabilities on any person, as stated in subsection 269S(1).