EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041605
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.
Apache Energy applied for a TCO in respect of certain subsea flying leads on 09 September 2010.
Instrument
TCO No 1041605 was made on 29 November 2010. It declares that those certain subsea flying leads 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. 1041605 is taken to have come into force on 09 September 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 for the administration of customs and excise duties in Australia. Among other provisions, it includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). The purpose of this scheme is to reduce customs duties on specific goods that are not produced in Australia in the ordinary course of business, thereby encouraging imports and potentially benefiting consumers and businesses. This is achieved through the application process outlined in section 269F, which allows individuals or companies to apply for a TCO if certain criteria are met, as stipulated in sections 269C, 269D, and 269E. The policy objective is to facilitate the importation of goods that are not domestically produced, thus supporting economic efficiency and consumer choice. Tariff Concession Instrument No. 1041605, made on 29 November 2010, is an example of this process, where certain subsea flying leads were granted a tariff concession, reducing their duty from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 1041605, under the Customs Act 1901, applies to specific subsea flying leads for which Apache Energy sought a tariff concession order (TCO). This legislation is part of a broader scheme within the Customs Act 1901, empowering the Chief Executive Officer of Customs (CEO) to make TCOs that result in a reduced rate of customs duty for specified goods. A TCO application can be made by any person, provided the goods in question are not those listed in section 269SJ, which details goods that cannot be subject to a TCO. The CEO must assess whether the application meets core criteria, notably that no substitutable goods are produced in Australia. This assessment involves understanding the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as outlined in the Act. Should the CEO determine that the application meets these criteria, a written TCO is issued, as was the case with Apache Energy's application for certain subsea flying leads, which now enjoy a zero duty rate. The instrument does not affect pre-existing rights and does not impose liabilities on any individual or entity other than the Commonwealth. The rights of importers, however, will be positively affected as they can apply for refunds of duty paid on such goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901 as amended by Tariff Concession Instrument No. 1041605 include sections 269C, 269P, 269K, and 269S. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be granted, which involves ensuring that no substitutable goods are produced in Australia on the day the application is lodged (s 269C). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they are required to make a TCO under section 269P (s 269P(3)). Additionally, section 269K mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO. Section 269S specifies that the TCO will come into force on the date the application is lodged (s 269S(1)).
The obligations and requirements imposed by the Act on the parties involved primarily rest with the CEO, who is tasked with determining whether an application for a TCO meets the stipulated core criteria. The CEO must also ensure that a public notice is published in the Gazette, inviting any interested parties to make submissions if they believe the TCO should not be made. Furthermore, the CEO must consider any submissions received and decide whether to proceed with issuing the TCO. Importers, on the other hand, benefit from the ability to apply for a refund of duty on goods imported from the date the TCO comes into force, as per paragraph 126(1)(r) of the Regulations.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the issuance or application of TCOs. However, the general legal framework under the Customs Act 1901 includes provisions for penalties in cases of non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity and nature of the offence. The specific penalties are determined by the court when a breach is prosecuted under the relevant sections of the Customs Act 1901.