EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014562
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.
Halliburton Pty Ltd applied for a TCO in respect of certain cement additives on 24 March 2010.
Instrument
TCO No 1014562 was made on 18 June 2010. It declares that those certain cement additives 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. 1014562 is taken to have come into force on 24 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 Tariff Concession Instrument No. 1014562 was enacted in 2010 under the Customs Act 1901 to address the issue of tariff concessions for specific goods, in this case, certain cement additives. This legislation was introduced to facilitate tariff reductions for goods that do not have substitutable alternatives produced within Australia, thereby encouraging importation and potentially lowering costs for businesses. The instrument was developed by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act. The primary objective of this TCO was to ensure that Halliburton Pty Ltd, the applicant, could import the specified cement additives without incurring the standard customs duty, which otherwise stood at 5%. This initiative aligns with the overarching policy of the Customs Act to streamline trade processes and reduce unnecessary barriers for imported goods where Australian production is not feasible or economically viable.
Scope and Application
The Tariff Concession Instrument No. 1014562, made under the Customs Act 1901, applies specifically to the goods identified in the application submitted by Halliburton Pty Ltd for certain cement additives. This instrument provides for a tariff concession, reducing the customs duty on these goods from the general rate of 5% to free, effective from the date the application was lodged, 24 March 2010. The instrument is designed to benefit importers by allowing them to apply for a refund of any duty paid on these goods since the effective date. Notably, the instrument does not impose any liabilities on any person and does not disadvantage or impose liabilities on any person in respect of anything done or omitted before the date of registration. It is also important to mention that the instrument does not affect the rights of any person other than the Commonwealth. The scope of this legislation is limited to the specific goods mentioned in the application and the conditions set out in the Customs Act 1901, with the instrument extending the application through subordinate instruments as necessary.
Key Provisions
The Tariff Concession Instrument No. 1014562, under the Customs Act 1901 (the Act), establishes the conditions for a Tariff Concession Order (TCO) (s 269C). According to the Act, the CEO of Customs can grant a TCO if the application does not pertain to goods specified in section 269SJ (s 269F). The CEO must assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C, s 269P(3)). If the CEO is satisfied that the application meets these criteria, a written TCO order is issued, specifying the goods subject to the concession and the applicable tariff item from the Customs Tariff Act 1995 (s 269P(3)).
The Act imposes certain obligations on the parties involved in the TCO process. The applicant must ensure that their TCO application does not involve goods listed in section 269SJ (s 269F). The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be granted (s 269K(1)). The CEO must also assess whether the application meets the core criteria by confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the CEO determines that the application meets these criteria, they must issue a written TCO order specifying the goods and the applicable tariff item (s 269P(3)). Furthermore, the CEO must not make a TCO if there are submissions against the order or if the application pertains to goods specified in section 269SJ (s 269K(1), s 269F).
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. If an entity submits a TCO application that does not meet the core criteria, the CEO is not required to issue a TCO, and no tariff concession will be granted. In cases where an entity contravenes the provisions of the Act or engages in misleading or deceptive conduct, they may face civil or criminal penalties. For example, section 138 of the Act imposes penalties for making false statements or providing misleading information in the context of customs duties, which may include fines or imprisonment. Additionally, the Commissioner of Customs may take enforcement actions against entities that fail to comply with the Act, which may include fines, penalties, or other administrative measures.