EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023822
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.
A J Lucas (Operations) Pty Ltd applied for a TCO in respect of certain drilling rigs on 28 May 2010.
Instrument
TCO No 1023822 was made on 30 August 2010. It declares that those certain drilling rigs 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. 1023822 is taken to have come into force on 28 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 Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). The purpose of this legislative instrument is to offer tariff concessions on certain goods, thus addressing the gap in the tariff structure for specific products not produced domestically. The Tariff Concession Instrument No. 1023822, enacted in 2010, applies to certain drilling rigs for which a lower rate of customs duty is provided, reflecting the policy objective of promoting the importation of goods that are not locally manufactured. This particular TCO was made following an application by A J Lucas (Operations) Pty Ltd, and it was effective from the date of application, 28 May 2010. The instrument does not affect the rights of any person other than the Commonwealth and allows for the refund of duties paid on the specified goods since the effective date.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the process for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity that seeks a tariff concession for specific goods imported into Australia, provided those goods do not fall under the exclusions specified in section 269SJ of the Act. The Act applies nationally across Australia, as it is a Commonwealth Act, ensuring uniform application of tariff concessions across state and territory borders. A TCO application must meet core criteria, which include the absence of substitutable goods produced in Australia on the date the application was lodged, as outlined in sections 269C and 269SJ. Once the CEO determines that a TCO application meets the core criteria, a written order is issued, effectively reducing the customs duty on the specified goods to zero, as seen in the case of the drilling rigs for A J Lucas (Operations) Pty Ltd. The application process involves public consultation, where interested parties can submit objections; however, in this instance, no submissions were received. The commencement date of a TCO is the date on which the application was lodged, ensuring immediate effect from the application date. Importantly, the TCO does not affect existing rights or impose new liabilities on anyone other than the Commonwealth, thereby protecting the interests of all parties involved.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they pertain to the Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. The CEO must then determine if the application satisfies the core criteria, which are outlined in section 269C and include the condition that no substitutable goods were produced in Australia on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, they must issue a written order (the TCO) as per section 269P. This order specifies the goods that are subject to the concession and applies a prescribed item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on parties or entities governed by this Act include the requirement for the CEO to assess each TCO application against the core criteria, ensuring that no substitutable goods were produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any person who might have reasons why the TCO should not be made, as per section 269K. Additionally, the Act ensures that the rights of importers are beneficially affected, providing them with the ability to apply for a refund of duty on goods imported since the TCO is deemed to have come into force. The Act clearly states that the TCO does not affect any rights of a person (other than the Commonwealth) in a manner that would disadvantage them or impose liabilities for actions taken prior to the TCO registration.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail civil or criminal penalties for non-compliance with the TCO provisions. However, the Act does clarify that the TCO does not impose any liabilities on any person, including the Commonwealth. This suggests that any breaches of the Act or TCO would likely be addressed through administrative or legal means rather than through specific penalties outlined within the Act itself. The focus appears to be on ensuring that the TCO process is transparent and that the rights of importers are protected, with any breaches potentially resulting in legal action to rectify any unintended disadvantages or liabilities.