EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919562
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 oil and gas well workover system valves on 10 June 2009.
Instrument
TCO No 0919562 was made on 04 September 2009. It declares that those certain oil and gas well workover system valves 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. 0919562 is taken to have come into force on 10 June 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. 0919562, enacted in 2009, is a legislative instrument under the Customs Act 1901, designed to address the need for tariff concessions on specific goods that are not produced in Australia. This instrument was introduced to provide relief on customs duties for goods that are essential but not domestically manufactured, ensuring they are more affordable and accessible. The instrument was made by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act 1901, which allows for the application and consideration of tariff concession orders. The policy objective is to facilitate the importation of these essential goods without the burden of duty, thereby promoting economic efficiency and supporting industries reliant on such imports. The instrument came into force on the date of application, 10 June 2009, and provides duty-free treatment for certain oil and gas well workover system valves, benefiting importers by potentially allowing for duty refunds on imports made since the effective date.
Scope and Application
The Customs Act 1901, as amended and extended by the Tariff Concession Instrument No. 0919562, applies to goods specified in the instrument, which, in this case, are certain oil and gas well workover system valves. These goods benefit from a tariff concession order (TCO) when imported into Australia, meaning that they are subject to a lower rate of customs duty, specifically zero percent, as opposed to the general rate of five percent. The Act and its associated instrument apply to any entity or person involved in the importation of these specified goods, thereby impacting their customs duty obligations. The Act is a Commonwealth law, meaning it has a national reach across Australia.
Section 269F of the Act allows any person to apply for a TCO provided the goods are not those specified in section 269SJ, which are ineligible for such concessions. The CEO of Customs must then determine if the application meets the core criteria outlined in section 269C, which includes assessing whether no substitutable goods were produced in Australia at the time of application. Once satisfied, the CEO issues a TCO, as seen with TCO No. 0919562 made on 4 September 2009 for Woodside Burrup Pty Ltd. The application process involves publishing a notice in the Gazette inviting public submissions, although in this instance, none were received. The TCO applies from the date the application was lodged, 10 June 2009, and benefits importers by potentially entitling them to duty refunds for imports since that date, without imposing any new liabilities on them or affecting their existing rights.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269B, 269D, 269E, and 269P, lay the groundwork for the process of applying for and making a Tariff Concession Order (TCO). Section 269C requires that an application for a TCO meets core criteria, primarily that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B and its related sections provide definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are crucial for determining eligibility for a TCO. Once these criteria are satisfied, Section 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must issue a written order (TCO) that applies a specified rate of duty, which in this case is free, to the goods in question.
The obligations imposed by the Act on the parties involved are straightforward yet crucial for the effective implementation of the TCO scheme. The CEO is tasked with assessing whether an application meets the core criteria outlined in Section 269C. This involves verifying that no substitutable goods were produced in Australia and that the goods in question are not those prohibited by Section 269SJ. The CEO must also ensure that a notice is published in the Gazette inviting submissions from the public regarding the proposed TCO, as stipulated in Section 269K(1). This transparency step allows interested parties to voice any concerns or objections before a TCO is finalized.
In terms of consequences for non-compliance, the legislation does not explicitly outline offences, penalties, or civil/criminal consequences for breaching the terms of a TCO or failing to comply with the application process. However, the Customs Act 1901 and associated regulations do provide a framework for addressing non-compliance with customs regulations in general. This could potentially include fines, legal action, or other penalties as determined by the relevant authorities. It is also worth noting that the TCO itself does not retroactively impose liabilities on any person and does not disadvantage anyone who has acted in reliance on prior customs duties.
Overall, the legislation is designed to ensure that the process for granting tariff concessions is fair, transparent, and in line with the objectives of the Customs Act 1901. By clearly defining the criteria for a TCO and the obligations of the CEO, the Act provides a robust framework for managing tariff concessions effectively. The inclusion of a public consultation process further enhances the accountability and transparency of the TCO scheme.