EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023297
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.
Baker Hughes Australia applied for a TCO in respect of certain cable winch systems on 25 May 2010.
Instrument
TCO No 1023297 was made on 17 August 2010. It declares that those certain cable winch systems 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. 1023297 is taken to have come into force on 25 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 was enacted to provide for the collection of customs duties and other imposts, and for related matters. This Act facilitates the efficient operation of customs by enabling the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty on specified goods. This legislative framework was introduced to address the problem of potentially high customs duties on goods for which no locally produced alternatives exist, thereby encouraging trade and benefiting importers. The Tariff Concession Instrument No. 1023297, made under this Act, was introduced to provide tariff concessions for certain cable winch systems, reducing their customs duty from 5% to free, thereby facilitating their importation and benefiting relevant importers by allowing them to apply for duty refunds on imports since the TCO came into effect on 25 May 2010. The CEO did not receive any submissions opposing the TCO, and the rights of importers will be beneficially affected without any imposition of liabilities.
Scope and Application
The Tariff Concession Instrument No. 1023297 under the Customs Act 1901 applies to specific cable winch systems for which Baker Hughes Australia submitted an application on 25 May 2010. This instrument was issued by the Chief Executive Officer of Customs (CEO) on 17 August 2010, in response to an application for a Tariff Concession Order (TCO) which was approved on the basis that no substitutable goods were produced in Australia on the date the application was lodged. The instrument declares that the specified cable winch systems are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, as opposed to the general rate of 5%. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received for this particular TCO. The TCO is considered effective from the date of the application, 25 May 2010, without retroactive impact on existing rights or liabilities, except for potential duty refunds for importers of these goods under certain conditions specified in the Customs Regulations.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria (section 269C) and is not in respect of goods specified in section 269SJ, they must make a written order declaring that the goods are subject to a lower rate of customs duty, as specified in the TCO (section 269P).
The Act imposes several obligations on the parties involved. A person must apply to the CEO for a TCO if they wish to benefit from a lower rate of customs duty (section 269F). The CEO must assess whether the application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time of application (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they consider there are reasons why the TCO should not be made (subsection 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. For instance, importing goods without a valid TCO or falsely claiming a concession may be considered an offence. The penalties for such breaches could include fines or imprisonment, depending on the severity of the offence. The specific penalties are outlined in other sections of the Customs Act 1901 and the associated regulations.
In this particular case, the CEO was satisfied that the application for the TCO met the core criteria, and no submissions were received in response to the published notice. The TCO No. 1023297, which applies to certain cable winch systems, came into effect on 25 May 2010. The TCO allows these goods to be imported at a duty rate of free, as opposed to the general rate of 5%. Importers of these goods can apply for a refund of duty paid on imports since the TCO's effective date. The TCO does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected without disadvantaging others.