EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949286
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 oil and or gas well parts on 17 December 2009.
Instrument
TCO No 0949286 was made on 05 March 2010. It declares that those certain 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. 0949286 is taken to have come into force on 17 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 Parliament of Australia, provides a framework for the administration of customs duties and the regulation of the import and export of goods. The Act, particularly under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the customs duty on specified goods. This legislative instrument addresses the gap in tariff regulations by enabling concessional tariffs for goods that are not produced domestically, thus supporting the policy objective of facilitating trade and promoting economic efficiency. Tariff Concession Instrument No. 0949286, issued on 5 March 2010, exemplifies this mechanism by granting a tariff concession on certain oil and gas well parts, reducing the duty rate from 5% to free, effective from the date of application on 17 December 2009. This order was made after no objections were raised during the public consultation period, in line with the requirements set out in the Act.
Scope and Application
The Tariff Concession Order No. 0949286 applies to certain oil and gas well parts and pertains to the application of a lower rate of customs duty as stipulated in the Customs Act 1901. This Act applies to the goods specified in the TCO, which in this instance are oil and gas well parts. The geographic reach of this legislation is national, as it applies across Australia and is administered by the Chief Executive Officer of Customs. The Act allows for tariff concessions if no substitutable goods are produced in Australia in the ordinary course of business, and in this case, the CEO determined that no such goods were being produced, thus permitting the tariff concession. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities. Any existing rights of importers are protected, and they may apply for a refund of duty on goods imported since the TCO was taken to have come into force on 17 December 2009. The application process and the decision to grant the TCO are governed by the provisions of the Customs Act 1901 and related subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0949286, under the Customs Act 1901, allows for a reduction in customs duty for certain goods. Specifically, section 269F of the Act enables an application for a Tariff Concession Order (TCO) by a person seeking a lower customs duty rate for goods they are importing. If the Chief Executive Officer (CEO) of Customs is satisfied that the application is valid and the goods are not those listed in section 269SJ, which are ineligible for TCOs, the CEO must then evaluate if the application meets the core criteria set out in section 269C. For a TCO application to meet these criteria, there must be no substitutable goods produced in Australia on the date the application is lodged, as defined by sections 269D and 269E of the Act.
The obligations imposed by the Act on parties and entities are primarily on the CEO of Customs. When a valid TCO application is received, the CEO must ensure that a notice is published in the Gazette (subsection 269K(1)), inviting any interested parties to submit their views on whether the TCO should be granted. This transparency requirement aims to provide stakeholders with an opportunity to voice their concerns or objections. In this case, the CEO did not receive any submissions in response to the published notice. Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO, as per section 269P(3).
The Act also outlines the consequences for any breaches of its provisions. However, the explanatory statement provided does not detail specific offences, penalties, or civil/criminal consequences for breaches related to the TCO. Generally, under Australian law, breaches of customs regulations can result in both civil and criminal penalties. Civil penalties can include fines, while criminal penalties may involve imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the explanatory statement but are typically detailed in the relevant sections of the Customs Act 1901 or related regulations.