EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922724
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 applied for a TCO in respect of certain subsea christmas tree running tools on 02 July 2009.
Instrument
TCO No 0922724 was made on 18 September 2009. It declares that those certain subsea christmas tree running tools 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. 0922724 is taken to have come into force on 02 July 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 Parliament of Australia, facilitates a framework for the application of Tariff Concession Orders (TCOs) through Part XVA. These orders, managed by the Chief Executive Officer of Customs, provide a lower rate of customs duty on specified goods, contingent on the absence of substitutable goods produced domestically. The act aims to enhance the competitive edge of Australian businesses by reducing the cost of imported goods that are not domestically produced, thereby encouraging trade and economic growth. In line with this objective, TCO No. 0922724, issued on 18 September 2009, applies to certain subsea Christmas tree running tools, granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995, as the CEO determined there were no substitutable goods produced in Australia. This instrument reflects the act’s policy objective to support Australian industry by reducing import costs where domestic alternatives do not exist.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This act applies to persons who seek a lower rate of customs duty on specific goods, provided these goods meet the criteria outlined in the Act. The Act allows for applications to the CEO for a TCO if the goods in question are not specified in section 269SJ, which lists goods that are ineligible for a TCO. The application is subject to the core criteria stipulated in sections 269C, 269B, and 269D, which respectively define when an application meets the core criteria, the meaning of goods produced in Australia, and the ordinary course of business, among other things. Once the CEO is satisfied that the application meets these criteria, they must issue a written order declaring the applicable duty rate. This particular legislation has a Commonwealth jurisdictional reach, and the TCOs can extend their application through subordinate instruments, such as the Customs Tariff Act 1995. Notably, the rights of importers are beneficially affected, and no liabilities are imposed on any person under this TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0922724 (TCO No 0922724) under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to make a written order granting a tariff concession (section 269P(3)). The application for a tariff concession order (TCO) must meet the core criteria, which include ensuring that no substitutable goods are produced in Australia on the day the application was lodged (section 269C). The TCO is effective from the date the application was made (section 269S(1)), which in this case is 02 July 2009.
The Act imposes certain obligations on the CEO when considering a TCO application. The CEO must publish a notice in the Gazette, inviting submissions from any interested parties who believe the TCO should not be granted (section 269K(1)). The CEO must also ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia (section 269C). Once the CEO is satisfied that the application meets these criteria, they must issue a TCO (section 269P(3)).
Breaching the requirements of the Customs Act 1901 can result in both civil and criminal consequences. For instance, providing false information in an application for a TCO could be considered an offence under section 269R of the Act, potentially resulting in criminal charges. The maximum penalty for such offences can be significant, including substantial fines and imprisonment, depending on the severity of the breach. Civil penalties may also apply, which could include financial penalties for non-compliance with the Act's requirements.