EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949039
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 Pty Ltd applied for a TCO in respect of certain triplex pumping skids on 16 December 2009.
Instrument
TCO No 0949039 was made on 05 March 2010. It declares that those certain triplex pumping skids 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. 0949039 is taken to have come into force on 16 December 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 customs duty and other import charges, and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislation was introduced to address the need for tariff concessions for specific goods, particularly where no substitutable goods are produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 0949039, made under the authority of the Customs Act 1901, details the application by Schlumberger Oilfield Australia Pty Ltd for a TCO on certain triplex pumping skids, which was subsequently approved by the Chief Executive Officer of Customs. The tariff concession reduces the duty on these goods from 5% to free, effective from 16 December 2009. This instrument ensures that the rights of importers are beneficially affected and that no person other than the Commonwealth is disadvantaged or imposed liabilities prior to the registration date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0949039 under the Customs Act 1901 applies to the specific case of Schlumberger Oilfield Australia Pty Ltd’s application for tariff concessions on certain triplex pumping skids, which are goods imported into Australia. This legislation is designed to provide a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) if the core criteria are met, such as the absence of substitutable goods produced in Australia. The geographic and jurisdictional reach of this Act is Commonwealth-wide, impacting any entity importing the specified goods into Australia. The Act does not apply to goods listed in section 269SJ of the Customs Act 1901, which are excluded from tariff concessions. The instrument extends the application of the Customs Act by providing a specific concession for the goods in question, thereby reducing the duty from the general rate of 5% to free, effective from the date of the application, 16 December 2009. This TCO does not affect any existing rights or liabilities of persons other than the Commonwealth as of the registration date, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the order’s effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0949039, under the Customs Act 1901, involve the establishment of tariff concessions for certain goods. Specifically, section 269F allows for the application for a Tariff Concession Order (TCO) to the Chief Executive Officer (CEO) of Customs, provided the goods in question are not prohibited under section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C, they must proceed to make the TCO. Section 269P(3) stipulates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be issued, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995. For example, in this case, certain triplex pumping skids are designated under item 50 of Schedule 4, with the duty rate set at free instead of the general rate of 5%.
The obligations under this Act require applicants to ensure that the goods they wish to apply for a TCO are not prohibited under section 269SJ and that no substitutable goods are being produced in Australia on the day the application is lodged, as per section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as outlined in subsection 269K(1). In this instance, no submissions were received. Furthermore, the TCO is deemed to have come into force on the date the application was lodged, as per subsection 269S(1), which in this case was 16 December 2009.
Failure to comply with the requirements of the Act can result in various consequences. While the explanatory statement does not explicitly outline specific offences or penalties, it is reasonable to infer that any breaches could lead to legal repercussions. This might include challenges to the validity of the TCO, disputes over the applicability of tariff rates, or administrative penalties for non-compliance with the notification and application processes. Importers and other stakeholders must ensure adherence to these provisions to avoid any adverse outcomes.
In conclusion, the Tariff Concession Instrument No. 0949039 plays a critical role in facilitating tariff concessions for certain goods, as long as they meet the specified criteria and obligations under the Customs Act 1901. The CEO's role in reviewing applications and issuing TCOs is pivotal, and the process is designed to be transparent with opportunities for public input. While the explanatory statement does not detail specific penalties, the importance of compliance is implicit, highlighting the need for careful adherence to the legislative requirements to avoid potential legal and administrative issues.