EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935393
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.
Halliburton applied for a TCO in respect of certain storage trailers on 21 September 2009.
Instrument
TCO No 0935393 was made on 04 December 2009. It declares that those certain storage trailers 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. 0935393 is taken to have come into force on 21 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. 0935393, made under the Customs Act 1901, was introduced to provide tariff concessions on certain goods, specifically certain storage trailers, to address a gap in the availability of locally produced substitutable goods. Enacted by the Chief Executive Officer of Customs, the instrument aims to provide relief on customs duty rates for goods not produced in Australia in the ordinary course of business, thereby potentially stimulating importation and market availability of such goods. The instrument was enacted to ensure that the application process for tariff concessions is transparent and allows for public input, although in this instance, no submissions were received. The tariff concession, effective from the date of application, benefits importers by potentially reducing their duty liabilities and allowing for duty refunds on previously imported goods.
Scope and Application
The Tariff Concession Instrument No. 0935393 under the Customs Act 1901 applies to the specific case of certain storage trailers that Halliburton sought to have tariff concessions for. This legislation is pertinent to entities or individuals who import these particular goods into Australia, thereby granting them a reduced rate of customs duty. The Act operates under the Commonwealth jurisdiction, and its reach is confined to the customs duty aspect of imported goods. The Act excludes any goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The Act allows for further extension or restriction of its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the prescribed items in the Customs Tariff. Importantly, the Act does not disadvantage or impose liabilities on any person in respect of actions taken prior to its registration.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0935393, are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria, they are mandated under section 269C to make a TCO, which provides for a lower rate of customs duty on the specified goods. Under section 269P(3), the CEO must then issue a written order that declares the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For this specific instrument, item 50 of Schedule 4 to the Tariff applies, reducing the duty rate to free from the general rate of 5% for certain storage trailers.
The Customs Act 1901 imposes several obligations on both the CEO and applicants for a TCO. For the CEO, the obligations include determining whether an application meets the core criteria by confirming that no substitutable goods were produced in Australia on the day the application was lodged, as specified in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as required by subsection 269K(1). Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on such persons in respect of actions taken prior to the TCO's registration.
For applicants, the primary obligation is to ensure that their application for a TCO is complete and meets the core criteria outlined in the Act. This includes providing sufficient evidence that no substitutable goods are produced in Australia. Failure to meet these obligations may result in the CEO denying the TCO application.
The legislation does not explicitly outline specific offences, penalties, or consequences for breaches within the TCO process itself. However, general provisions of the Customs Act 1901 and associated regulations may apply to breaches of customs law, which could include both civil and criminal penalties. For example, knowingly providing false information in an application for a TCO could potentially lead to penalties under sections 275 or 276 of the Customs Act 1901, which address offences involving false statements and fraud. Penalties for such offences can include fines and imprisonment, depending on the severity of the breach.