EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922726
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 release tools on 02 July 2009.
Instrument
TCO No 0922726 was made on 18 September 2009. It declares that those certain subsea christmas tree release 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. 0922726 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 Australian Parliament, provides a framework for the regulation of customs and excise duties. The Act was introduced to establish a systematic approach to managing customs and excise duties, ensuring that revenue is collected efficiently and fairly while facilitating trade. Part XVA of the Act, in particular, details the process for Tariff Concession Orders (TCOs), which allow for the application of lower customs duty rates on certain goods. This was designed to address the need for flexibility in duty rates to support industry competitiveness and economic growth. The explanatory statement for Tariff Concession Instrument No. 0922726, made under the Customs Act, illustrates this process by detailing how Woodside Burrup successfully applied for a TCO for specific subsea Christmas tree release tools, resulting in a reduction of customs duty from 5% to free. This was achieved as no substitutable goods were produced in Australia, satisfying the core criteria for a TCO as outlined in section 269C of the Act.
Scope and Application
The Tariff Concession Instrument No. 0922726 under the Customs Act 1901 applies to any person or entity seeking a tariff concession order (TCO) for specified goods that are not produced in Australia in the ordinary course of business. The application of the Act is primarily concerned with the criteria under which the Chief Executive Officer of Customs can grant a TCO, leading to a reduction in customs duty for the specified goods. The geographic reach of the Act is national, applying across Australia under the federal framework established by the Customs Act 1901. The Act does not impose any new liabilities or disadvantage any person other than the Commonwealth in relation to actions taken before the TCO is registered. The TCO affects the rights of importers beneficially, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The application of the Act can be extended or restricted through subordinate instruments, which may further define the operational parameters of tariff concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0922726 (TCO No. 0922726) under the Customs Act 1901 (section 269F) provide the mechanism for applying for and granting tariff concessions on specific goods. A person may apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods if they are not specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269F). If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations and requirements on the parties involved. The CEO must review the application to ensure it does not pertain to goods that are specifically excluded under section 269SJ. The CEO must also determine if the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written TCO, which will declare the applicable prescribed item (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as a valid application (subsection 269K(1)).
Under the Act, there are no specific offences, penalties, or civil/criminal consequences outlined for breaches of the TCO provisions. However, the Act ensures that the rights of persons (other than the Commonwealth) will not be adversely affected by the TCO, and no liabilities will be imposed on any person in respect of actions taken before the TCO's effective date (subsection 269S(1)). Importers of the affected goods can apply for a refund of duty paid on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
The TCO does not disadvantage any person or impose any liabilities on any person other than the Commonwealth, as outlined in the Act. It ensures that the rights of importers will be beneficially affected, providing them the opportunity to apply for a refund of duty on goods imported since the TCO's effective date.