EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946016
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 Energy applied for a TCO in respect of certain subsea termination heads on 05 January 2009.
Instrument
TCO No 0946016 was made on 27 March 2009. It declares that those certain subsea termination heads 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. 0946016 is taken to have come into force on 05 January 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, establishes a framework for the imposition and collection of customs duty on imported goods. In addressing the need to facilitate trade and economic efficiency, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the duty rates on specified goods under certain conditions, particularly when no suitable substitute goods are produced domestically. The Tariff Concession Instrument No. 0946016, issued in 2009, is an example of such an order. This particular instrument was enacted in response to an application by Woodside Energy for tariff concessions on certain subsea termination heads, resulting in a reduction of the duty rate from 5% to free. The instrument was effective from the date the application was lodged, 5 January 2009, and the process included a public consultation period with no objections received. The policy objective here is to support trade by providing duty relief where appropriate, thereby encouraging the import of goods that cannot be efficiently produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0946016 under the Customs Act 1901 applies specifically to goods that are the subject of a Tariff Concession Order (TCO). This instrument was enacted to address an application by Woodside Energy for a TCO concerning certain subsea termination heads. The TCO applies to these specific goods and was made effective from 5 January 2009, the date the application was lodged. The Act applies to any person or entity seeking a TCO for goods not produced in Australia in the ordinary course of business, as per the criteria outlined in sections 269C and 269D of the Act. The TCO reduces the general rate of duty from 5% to free, benefitting importers who can now apply for a refund of duty on these goods imported since the effective date of the TCO. This legislation operates on a national level within the Commonwealth of Australia and does not impose any liabilities on any person other than the Commonwealth. The scope of the TCO is limited to the specific goods mentioned in the application and does not affect the rights of any person other than the Commonwealth in relation to actions taken before the registration of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0946016 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a written order, a TCO, as specified in section 269P(3). This TCO declares that the goods in question are to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. For instance, in this particular case, the TCO No. 0946016 specifies that certain subsea termination heads are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a duty-free status for these goods.
The Act imposes certain obligations on the parties involved. Section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes the TCO should not be made to lodge a submission with the CEO. The CEO is also required to decide whether the application meets the core criteria, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C.
Failure to comply with the requirements of the Act can result in various consequences. While the explanatory statement does not specify particular offences, penalties, or civil/criminal consequences for breach, it is implied that non-compliance with the stipulated procedures or improper applications could lead to the rejection of the TCO application. Additionally, any attempt to circumvent the provisions of the Act could potentially result in legal action or penalties as outlined in other relevant sections of the Customs Act 1901. It is essential for applicants and other stakeholders to adhere strictly to the requirements to avoid any adverse outcomes.