EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949040
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 trailer or skid mounted plant mixers on 16 December 2009.
Instrument
TCO No 0949040 was made on 05 March 2010. It declares that those trailer or skid mounted plant mixers 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. 0949040 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 Tariff Concession Instrument No. 0949040, enacted under the Customs Act 1901, was introduced to provide tariff concessions for specific goods, thereby reducing the customs duty applied to them. This instrument was created in response to an application by Schlumberger Oilfield Australia Pty Ltd for tariff concessions on trailer or skid mounted plant mixers, which were to be subject to a lower rate of customs duty if certain criteria were met. The instrument was issued by the Chief Executive Officer of Customs, who determined that the application met the core criteria as no substitutable goods were produced in Australia at the time of the application. The policy objective is to support Australian industries by potentially reducing the cost of importing certain goods, thus encouraging their use and potentially stimulating local production.
The instrument became effective from the date the application was lodged, 16 December 2009, and no submissions were received against the making of the order. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, while allowing importers to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0949040 applies to the customs duty concessions for certain trailer or skid mounted plant mixers as specified in the Customs Act 1901. The Act mandates that the Chief Executive Officer of Customs (CEO) must make a Tariff Concession Order (TCO) if satisfied that the application for concession meets the core criteria, notably if no substitutable goods were produced in Australia in the ordinary course of business. This instrument was applied to goods specified in the application by Schlumberger Oilfield Australia Pty Ltd and was made effective from 16 December 2009, the date the application was lodged. The scope of the Act encompasses entities that apply for and are granted TCOs, and it extends to the industries involved in the importation of specified goods. The geographic reach of the Act is national, applying across Australia under the Commonwealth. There are exclusions for goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act can extend its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and rates of duty for goods under the concession.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S. Section 269C outlines the core criteria that must be satisfied for an application for a Tariff Concession Order (TCO) to be considered. Specifically, it requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) then provides that if the Chief Executive Officer of Customs (CEO) is satisfied that these core criteria have been met, they must make a written order declaring the goods to which the TCO applies. Finally, section 269S sets out the commencement date for the TCO, which is the date on which the application for the TCO was lodged.
The obligations imposed by this Act are primarily on the CEO of Customs, who must review TCO applications to determine if they meet the core criteria specified in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a TCO as outlined in section 269P(3). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any interested parties who believe there are reasons why the TCO should not be made (subsection 269K(1)). The Act also requires that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on any person in respect of anything done or omitted before the date of registration (subsection 269S(3)).
Breaches of this Act can have civil and criminal consequences. For instance, any person who knowingly makes a false or misleading statement in an application for a TCO may be liable to a penalty of up to 10,000 penalty units under section 276 of the Customs Act 1901. Additionally, any person who imports goods in contravention of the terms of a TCO may be liable to pay the duty that would have applied but for the TCO, plus a penalty of up to 10,000 penalty units under section 126 of the Customs Act 1901. It is important to note that the maximum penalty for these offences can be higher if the offence is committed by a body corporate. Furthermore, any person who is found guilty of an offence under this Act may also be subject to criminal prosecution, which can result in fines and imprisonment.