EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051145
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.
McDermott Australia Pty Ltd applied for a TCO in respect of certain subsea and/or above sea lifting tools on 19 November 2010.
Instrument
TCO No 1051145 was made on 28 February 2011. It declares that those certain subsea and/or above sea lifting tools 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. 1051145 is taken to have come into force on 19 November 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. 1051145, enacted in 2011 under the Customs Act 1901, addresses the need to provide tariff concessions for certain imported goods. This instrument was introduced to facilitate the importation of goods for which no domestic alternatives are produced in Australia, thereby ensuring that Australian businesses can access necessary tools and equipment at a reduced customs duty rate. The instrument was created by the Chief Executive Officer of Customs, in line with the statutory requirements set out in the Customs Act, and is intended to encourage trade by lowering the financial barrier for importing specific goods. The policy objective is to support the economic efficiency and competitiveness of Australian industries by allowing them to procure goods more cost-effectively from overseas.
Scope and Application
The Tariff Concession Instrument No. 1051145 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions for specific goods, in this case certain subsea and/or above sea lifting tools. The instrument is enacted by the Chief Executive Officer of Customs, who must determine whether an application for a Tariff Concession Order (TCO) meets the core criteria outlined in the Act. Specifically, the TCO applies to the lifting tools in question as no substitutable goods were produced in Australia at the time of the application. This legislation operates under Commonwealth jurisdiction, extending across all states and territories in Australia, as it is a federal act. The instrument excludes any goods specified in section 269SJ of the Act that cannot be subject to a TCO. Additionally, the instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities. The application of this TCO can be further detailed or modified through subordinate instruments, although none are specified in this instance.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO for goods. If the application is deemed not to pertain to goods listed in section 269SJ, which specifies those goods ineligible for a TCO, the CEO must determine whether the application meets the core criteria outlined in section 269C. If the CEO determines that the application meets the criteria, a written order is issued, and the goods are subject to the terms of the TCO.
The Act imposes specific obligations on applicants and the CEO. For applicants, the requirement is to submit a valid application to the CEO for a TCO, ensuring that the goods do not fall under the ineligible category specified in section 269SJ. The CEO must then assess the application against the core criteria, specifically ensuring no substitutable goods are produced in Australia in the ordinary course of business. If the criteria are met, the CEO must issue a written TCO. Additionally, the CEO is obligated to publish a notice in the Gazette inviting any objections to the TCO application as per section 269K(1).
There are no specific offences outlined in the legislation for the failure to comply with the TCO process. However, non-compliance with the terms of the TCO itself could potentially lead to legal consequences such as fines or other penalties under the broader Customs Act or related legislation. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO. It explicitly states that a TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered.