EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1020868
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 Pty Ltd applied for a TCO in respect of certain slurry batch mixers on 07 May 2010.
Instrument
TCO No 1020868 was made on 19 July 2010. It declares that those certain slurry batch 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. 1020868 is taken to have come into force on 07 May 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, thereby reducing the customs duty on specified goods. This legislative instrument addresses the need to provide tariff concessions to ensure fair and efficient trade practices by exempting certain goods from standard customs duties. The objective is to encourage the import of goods that are not domestically produced or for which there are no suitable substitutes, thereby supporting industry competitiveness and consumer benefits. Schlumberger Australia Pty Ltd's application for a TCO for certain slurry batch mixers exemplifies this process, leading to Instrument No. 1020868, which was enacted on 19 July 2010, reducing the duty rate for these mixers from 5% to free. This instrument came into force on 7 May 2010, the date of the application, and does not impose any liabilities or disadvantage any person except the Commonwealth.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1020868, provides a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that apply preferential rates of customs duty on specified goods. This Act applies to the CEO of Customs and to entities that import goods into Australia, specifically those who may apply for a TCO. The geographic reach of this Act is national, applying across all states and territories of Australia as a Commonwealth Act. The Act specifies certain exclusions, particularly in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act can also be extended or restricted through subordinate instruments such as the Customs Tariff Act 1995. This particular TCO, made in relation to certain slurry batch mixers, reduces the customs duty rate from the general rate of 5% to free, and was implemented on the date the application was lodged, 7 May 2010.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) involved in this process include section 269C (which outlines the core criteria for a Tariff Concession Order (TCO) application), section 269F (which allows a person to apply for a TCO in respect of goods), section 269K (which requires the Chief Executive Officer of Customs (the CEO) to publish a notice in the Gazette upon accepting a TCO application as valid), and section 269P (which mandates the CEO to make a written order (a TCO) if satisfied that an application meets the core criteria). Specifically, section 269C sets out the criteria that must be satisfied for a TCO application to be considered, including that no substitutable goods were produced in Australia on the day the application was lodged. Section 269F enables an application to be made to the CEO for a TCO, while section 269K requires the CEO to invite submissions on the application from any interested parties by publishing a notice in the Gazette. If the CEO decides to proceed, section 269P requires them to make a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties it governs. Firstly, section 269F mandates that any person wishing to apply for a TCO must do so by submitting an application to the CEO. Secondly, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. This ensures transparency and allows for stakeholder input before a decision is made. Thirdly, section 269C requires the CEO to assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are satisfied, the CEO must proceed to make a written TCO under section 269P.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the provided text for breaches related to the application or making of a TCO. However, it is implied that failure to adhere to the legislative requirements could result in the TCO not being granted, which may have financial implications for the applicant if they are not eligible for the tariff concession. Additionally, any misuse or fraudulent application for a TCO could potentially lead to other legal consequences under general laws against fraud or misrepresentation. The focus of the legislation appears to be on ensuring a fair and transparent process rather than punitive measures for non-compliance.