EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010586
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 Australia applied for a TCO in respect of certain coiled tubing interface machines on 01 March 2010.
Instrument
TCO No 1010586 was made on 21 May 2010. It declares that those certain coiled tubing interface machines 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. 1010586 is taken to have come into force on 01 March 2010.
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 Commonwealth Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These TCOs allow for reduced customs duty rates on specific goods, facilitating trade by making imported goods more affordable. The Act aims to provide economic benefits by encouraging the importation of goods that are not domestically produced. The 2010 Explanatory Statement for Tariff Concession Instrument No. 1010586 specifies that Schlumberger Australia's application for a TCO concerning certain coiled tubing interface machines was accepted because no equivalent goods were being produced in Australia. Consequently, the CEO issued TCO No. 1010586, effective from the date of the application, which set the duty rate for these machines at zero, down from the general rate of 5%. The instrument was published in the Gazette, inviting objections, though none were received. This concession aims to support the economic interests of importers by reducing their duty costs and potentially encouraging further imports of similar goods.
Scope and Application
The Tariff Concession Instrument No. 1010586 applies specifically to certain coiled tubing interface machines, a type of equipment used in the oil and gas industry. The Act, under which this Instrument is made, applies to any person or entity that imports goods into Australia, with a specific focus on those who may benefit from tariff concessions on specific items as outlined in the Customs Tariff Act 1995. The Instrument is part of the broader Customs Act 1901, which governs the importation of goods into Australia, and extends to the national jurisdiction of Australia. The Concession Order made under this Instrument exempts the specified machines from the general customs duty, thereby providing a tariff benefit to the importer of these goods. The exclusions and criteria for these concessions are strictly defined, and the application process involves an assessment by the Chief Executive Officer of Customs to ensure the goods are not being produced in Australia and are substitutable by the imported goods. The Instrument does not impose any liabilities on individuals or entities except for the standard customs duties that may apply to other goods not covered by a Tariff Concession Order.
Key Provisions
The Tariff Concession Instrument No. 1010586, made under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) for certain coiled tubing interface machines. Under section 269F (1) of the Act, an application for a TCO can be submitted by any person to the Chief Executive Officer (CEO) of Customs, who then assesses whether the application complies with the core criteria set out in section 269C. In this case, the CEO determined that no substitutable goods were produced in Australia on the day the application was lodged, thereby satisfying the core criteria.
The obligations under the Act require the CEO to make a written order, a TCO, if the application meets the criteria. This is mandated by section 269P(3). The CEO must also publish a notice in the Gazette (section 269K(1)) inviting any interested party to submit objections to the TCO. In this instance, no submissions were received, leading to the issuance of TCO No. 1010586. The TCO declares that the specified coiled tubing interface machines are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
Failing to adhere to the requirements of the Act, such as submitting a false application or not complying with the notification process, may lead to various consequences. The Act does not explicitly outline penalties for non-compliance in this context, but breaches of customs regulations generally may result in civil or criminal penalties. These penalties could include fines and imprisonment, depending on the severity of the breach and any applicable legislation.
The TCO does not affect any rights of individuals or entities other than the Commonwealth as of the registration date, nor does it impose any liabilities on such parties for actions taken before the registration date. This ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO itself does not impose any liabilities on any person.