EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010647
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 stimulation fluid pressure manifold trailers on 02 March 2010.
Instrument
TCO No 1010647 was made on 21 May 2010. It declares that those certain stimulation fluid pressure manifold trailers 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. 1010647 is taken to have come into force on 02 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 Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation aims to address the problem of ensuring that Australian industries are not unduly burdened by customs duties on goods for which no suitable domestic substitutes exist, thereby encouraging the importation of goods that are critical for certain industries but not produced domestically. TCO No. 1010647 was introduced following an application by Schlumberger Australia for tariff concessions on certain stimulation fluid pressure manifold trailers. The primary policy objective of this specific TCO was to facilitate the importation of these trailers by applying a zero rate of duty, which was effective from the date the application was lodged, thereby reducing costs for the applicant and potentially passing on savings to consumers. The instrument came into force on 2 March 2010, without any adverse impact on the rights of importers or the imposition of any new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (CEO). The Act applies to individuals and entities that seek to import goods eligible for a TCO, effectively reducing customs duty rates for specified items. The scope of this legislation is national, extending across the Commonwealth of Australia. It does not apply to goods that are listed in section 269SJ of the Act, which specifies those goods that cannot be subject to a TCO. The Act also provides for the CEO to consult with the public and consider submissions before making a decision on a TCO application, although in this case, no submissions were received. The TCO is effective from the date of the application, in this instance, from 02 March 2010, and it does not affect the rights of any person as at the date of registration concerning actions taken prior to the registration date. Importers will benefit from this TCO by potentially applying for a refund of duty on goods imported since the effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1010647, made under the Customs Act 1901, concern the establishment of a tariff concession order (TCO) for certain stimulation fluid pressure manifold trailers. Specifically, section 269F (1) allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in sections 269C and 269B, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this case, TCO No. 1010647 was made on 21 May 2010, declaring that certain stimulation fluid pressure manifold trailers are subject to a free rate of duty, as opposed to the general rate of 5%.
The Act imposes several obligations and requirements on the parties and entities it governs. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid. In this instance, the CEO published such a notice but did not receive any submissions. Secondly, section 269S(1) 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. 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.
Any breaches of the obligations and requirements under the Customs Act 1901 may lead to offences, penalties, or civil/criminal consequences. However, the Explanatory Statement does not detail specific offences, penalties, or consequences related to this particular TCO. It is important to note that general provisions under the Customs Act 1901 may apply, including fines and imprisonment for breaches of the Act, but the maximum penalties are not stated in the Explanatory Statement. It is also worth noting that the TCO does not impose any liabilities on any person.