EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932317
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.
Schlumberger Oilfield Australia applied for a TCO in respect of certain cement mixer trucks on 01 September 2009.
Instrument
TCO No 0932317 was made on 20 November 2009. It declares that those certain cement mixer trucks 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. 0932317 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and the regulation of imported goods. Part XVA of the Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders reduce the customs duty for certain goods, provided the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0932317 was introduced to address Schlumberger Oilfield Australia's application for a TCO concerning specific cement mixer trucks, ensuring these goods are subject to a duty rate of free, down from the general rate of 5%. The instrument was made effective from the date the application was lodged, 1 September 2009, and the CEO published a notice inviting submissions, none of which were received. The primary policy objective of this TCO is to provide tariff relief on specific imported goods, thereby benefiting importers by potentially allowing them to claim refunds for duties paid prior to the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0932317, under the Customs Act 1901, pertains to the application of Tariff Concession Orders (TCOs) in relation to specific cement mixer trucks. The Act applies to entities such as Schlumberger Oilfield Australia that seek tariff concessions for importing goods that are not produced in Australia in the ordinary course of business. The instrument grants these entities a lower rate of customs duty for the specified cement mixer trucks, reducing the general duty rate from 5% to free. This concession is available under the conditions outlined in the Customs Act 1901, where the CEO must ensure that no substitutable goods are produced in Australia at the time of the application. The TCO does not retroactively affect the rights of any person and does not impose liabilities on anyone for actions taken prior to the registration of the concession. The instrument's scope is national, affecting customs duty across Australia and is subject to any subordinate instruments that may further define the terms and conditions of the concession.
Key Provisions
Section 269F of the Customs Act 1901 allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for goods, provided the goods are not those listed in section 269SJ, which specifies items ineligible for a TCO. The CEO is required to determine if the application meets the core criteria established in section 269C. This assessment involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E of the Act. If the application fulfils these criteria, the CEO must issue a written order, which is the TCO, under subsection 269P(3) of the Act.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred around the application process and the subsequent decision-making by the CEO. The applicant must ensure that their application is valid and meets the specified criteria. The CEO must then diligently review the application, assess the eligibility based on the core criteria, and, if satisfied, issue the TCO. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. In the case of Schlumberger Oilfield Australia’s application for TCO No. 0932317, no objections were received, allowing the CEO to proceed with the concession.
In terms of consequences for breach or non-compliance, the Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions related to TCOs. However, any misuse or fraudulent claims in the application process could potentially lead to legal actions under broader customs and trade laws, which might include fines or other penalties as prescribed by relevant legislation. The Act ensures that the rights of persons other than the Commonwealth are protected and that no new liabilities are imposed by the TCO. Importers may benefit from applying for a refund of duty on goods imported since the TCO was taken to have come into force, as stipulated in paragraph 126(1)(r) of the Regulations.