EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944984
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.
National Oilwell Varco applied for a TCO in respect of certain shock tool oil and or gas well parts on 26 November 2009.
Instrument
TCO No 0944984 was made on 26 February 2010. It declares that those certain shock tool oil and or gas well parts 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. 0944984 is taken to have come into force on 26 November 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 for a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The 2010 Tariff Concession Instrument No. 0944984 was introduced to address the gap in the application process for TCOs, ensuring that certain goods, in this case specific shock tool oil and gas well parts, can benefit from a reduced rate of customs duty if no substitutable goods are produced in Australia. The policy objective is to support Australian industry by reducing the duty on certain imported goods, thereby making them more competitive in the domestic market without disadvantaging existing rights holders or imposing new liabilities. This instrument came into force on the date of application, 26 November 2009, and allows eligible importers to apply for a refund of duty on goods imported since that date.
Scope and Application
The Tariff Concession Instrument No. 0944984, made under the Customs Act 1901, applies to the goods specified in the instrument, namely certain shock tool oil and gas well parts. This Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on goods, subject to certain conditions. The primary condition for a TCO under this Act is that the goods in question must not have substitutable goods produced in Australia in the ordinary course of business. The Act’s application is Commonwealth-wide and extends to any goods that meet the specified criteria, irrespective of the industry or entity involved. The instrument was made on 26 February 2010 and is effective from 26 November 2009, the date the application was lodged. The instrument does not affect any pre-existing rights of parties other than the Commonwealth and imposes no liabilities on any person. The Act allows for further specification and amendment through subordinate instruments.
Key Provisions
The key operative sections of this legislation are sections 269C, 269F, 269P(3), and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application is not for goods specified in section 269SJ, which are ineligible for a TCO, they must determine whether the application meets the core criteria outlined in section 269C. This provision mandates that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these conditions are met, they must make a written order (a TCO) as stated in section 269P(3), declaring that the goods in question are subject to a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved. An applicant must submit a valid application to the CEO for a TCO, ensuring that the goods in question are not specified in section 269SJ. The CEO has the responsibility to assess whether the application meets the core criteria. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. If the CEO determines that the application meets the core criteria, they are required to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1).
There are no explicit offences, penalties, or consequences outlined in the text for breaches of the Act or the TCO. However, any actions taken in reliance on the TCO, such as importing goods without paying the correct duty, could potentially lead to legal consequences under the Customs Act 1901 or related legislation. The TCO itself does not impose any liabilities on any person, as per the explanatory statement, but the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.