EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932259
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.
Esso Australia Resources applied for a TCO in respect of certain fluid subsea flying leads on 01 September 2009.
Instrument
TCO No 0932259 was made on 20 November 2009. It declares that those certain fluid subsea flying leads 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. 0932259 is taken to have come into force on 01 September 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. 0932259, enacted in 2009, is a measure under the Customs Act 1901 designed to address the need for tariff concessions on specific goods. This legislation allows the Chief Executive Officer of Customs to reduce the customs duty on certain imported goods, providing economic benefits to businesses and consumers. The primary objective of this instrument is to provide a tariff concession for certain fluid subsea flying leads, which were the subject of an application by Esso Australia Resources. By granting this concession, the Act aims to ensure that the goods in question are subject to a lower rate of customs duty, thus promoting economic efficiency and fair trade practices.
The instrument was introduced by the Australian Parliament and aims to streamline the process of applying for tariff concessions, ensuring that the application meets specific criteria as outlined in the Customs Act. The process involves a review by the CEO to determine whether the application for a tariff concession meets the core criteria, which include ensuring that no substitutable goods are produced in Australia. Once the CEO is satisfied with the application, a written order is made, and the tariff concession becomes effective. This legislative measure ensures that the rights of importers are protected and that no individual or entity, other than the Commonwealth, is disadvantaged by the imposition of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0932259, made under the Customs Act 1901, applies to the specific goods known as certain fluid subsea flying leads and is applicable to the entity that applied for the concession, Esso Australia Resources. This instrument facilitates a tariff concession order (TCO) whereby the goods in question are granted a duty-free status, altering their tariff treatment from the general rate of 5% to a zero rate. The instrument extends to the Commonwealth jurisdiction and its enactment does not affect the rights of any person other than the Commonwealth as at the date of registration, ensuring no one is disadvantaged or imposed with liabilities for actions prior to the registration date. Notably, importers stand to benefit from this concession as they can apply for a refund of duty on goods imported since the TCO came into effect on 1 September 2009. The Act does not specify any exclusions or exemptions to the application of this TCO, although it is subject to the criteria outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application for Tariff Concession Orders (TCOs) by individuals or entities seeking to reduce customs duty rates on specific goods. An application must be made to the Chief Executive Officer of Customs (CEO) if the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. Section 269C requires that the application meets core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, with "substitutable goods" defined in section 269D, "ordinary course of business" in section 269E, and the broader terms in section 269P(3). If the CEO is satisfied that these criteria are met, they must issue a written order (section 269P(3)) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on parties applying for a TCO are straightforward. Firstly, applicants must ensure that their application is lodged with the CEO and that it pertains to goods not excluded by section 269SJ of the Act. They must also demonstrate that on the day the application was lodged, no substitutable goods were produced in Australia, in accordance with sections 269C and 269D. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). The CEO must then consider any such submissions before making a decision.
Under the Customs Act 1901, failure to comply with the provisions governing TCOs may result in various consequences. If an entity does not meet the core criteria specified in section 269C, the CEO is not obligated to issue a TCO, and the applicant may not receive the tariff concession they sought. Additionally, if the CEO fails to publish a notice in the Gazette as required by subsection 269K(1), or if the CEO does not adequately consider valid submissions, these actions could be subject to review or challenge. Although the explanatory statement does not specify particular penalties for non-compliance, breaches of the Customs Act 1901 may lead to legal actions, including fines and other civil or criminal consequences as prescribed by the Act. The specific penalties would depend on the nature and severity of the breach, but they could include substantial fines or even imprisonment for serious violations.