EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915620
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.
Woodside Burrup Pty Ltd applied for a TCO in respect of certain parts workover system subsea on 08 May 2009.
Instrument
TCO No 0915620 was made on 31 July 2009. It declares that those certain parts workover system subsea 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. 0915620 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise in Australia. In particular, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This allows for a lower rate of customs duty to apply to goods that are the subject of a TCO. The Tariff Concession Instrument No. 0915620 was introduced to address a specific gap in the duty rates for certain parts of a workover system subsea, which were not being produced in Australia at the time of the application. The policy objective is to ensure that Australian industries remain competitive by providing tariff concessions for goods that cannot be produced domestically, thereby encouraging import and use of such goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0915620, applies to any person or entity seeking a reduction in customs duty on specific goods through a Tariff Concession Order (TCO). This instrument primarily affects the import sector, particularly those importing parts for workover systems used in subsea operations, as evidenced by the application from Woodside Burrup Pty Ltd. The Act operates at a national level, governing the process by which the Chief Executive Officer of Customs can approve such tariff concessions. A TCO is applicable only if certain conditions are met, including the absence of substitutable goods produced in Australia, as defined under the Act. The instrument’s jurisdictional reach is nationwide, impacting all parties involved in the importation of the specified goods. There are no stated exclusions within the confines of this particular TCO; however, it does not affect the rights of any person other than the Commonwealth, ensuring that no pre-existing liabilities or disadvantages arise from its implementation.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0915620 (TCO No. 0915620) are contained within Part XVA of the Customs Act 1901. This section provides the framework under which the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) (s 269F). If an application for a TCO is made and it meets the specified criteria, the CEO is required to issue a TCO (s 269C). This particular TCO, No. 0915620, was issued on 31 July 2009 and applies to certain parts of a workover system subsea, granting them a free rate of duty (item 50 of Schedule 4 to the Customs Tariff Act 1995) as opposed to the general rate of 5% (s 269P(3)).
The Customs Act 1901 imposes several obligations on both the CEO and applicants for TCOs. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a TCO (s 269F). If the application is valid, the CEO must then determine if it meets the core criteria set out in section 269C, which includes verifying that no substitutable goods were produced in Australia at the time of application (s 269B, s 269C, s 269D, s 269E). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (s 269K(1)). For the applicant, the obligation is to provide a valid application and any necessary supporting information to meet the core criteria. In this case, Woodside Burrup Pty Ltd applied for the TCO on 8 May 2009, and no submissions were received in response to the CEO's notice.
Failure to comply with the requirements set out in the Customs Act 1901 may result in both civil and criminal consequences. While the explanatory statement does not explicitly detail the penalties for non-compliance, under the Customs Act 1901, breaches of the Act can lead to fines and imprisonment. The maximum penalties for serious offences can be significant, with the exact penalties depending on the nature and severity of the breach. Furthermore, the Act provides for the imposition of pecuniary penalties for breaches of the regulations, which can include substantial fines for both individuals and corporations. Given the importance of adhering to these regulations, it is crucial for all parties involved to ensure full compliance with the requirements of the Customs Act 1901 and any associated TCOs.