EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1056479
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.
Halliburton Australia Pty Ltd applied for a TCO in respect of certain slurry batch mixer on 31 December 2010.
Instrument
TCO No 1056479 was made on 21 March 2011. It declares that those certain slurry batch mixer 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. 1056479 is taken to have come into force on 31 December 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 regulation of customs and excise in Australia. In addressing the issue of tariff concessions for certain imported goods, the Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) that can reduce or eliminate customs duty on specified goods under particular conditions. Specifically, Part XVA of the Act empowers the Chief Executive Officer of Customs to issue TCOs that apply a lower rate of duty on goods, provided that no substitutable goods are produced in Australia. The 2011 Tariff Concession Instrument No. 1056479, for example, was introduced to offer a tariff concession on certain slurry batch mixers, where it was determined that no equivalent goods were manufactured domestically. This measure is designed to support the importation of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers while also encouraging the import of specific goods that may benefit from international competition.
Scope and Application
The Tariff Concession Instrument No. 1056479, made under Part XVA of the Customs Act 1901, applies specifically to the goods in question, namely certain slurry batch mixers, as identified by Halliburton Australia Pty Ltd. This instrument was enacted to provide tariff concessions for these particular goods, reducing the customs duty rate from the general 5% to free. This application is confined to the goods specified in the instrument, and it does not extend to any other goods not covered by the definition within the Customs Act 1901 or those listed in section 269SJ of the Act, which explicitly excludes certain goods from tariff concessions. The scope of the legislation is national, as it pertains to the Commonwealth of Australia and operates within the framework set by the Customs Act 1901 and the Customs Tariff Act 1995. The instrument’s commencement is retroactive to the date of the application, 31 December 2010, and does not affect the rights of any person other than the Commonwealth, ensuring no pre-existing liabilities or disadvantages are imposed on any parties as a result of the concession.
Key Provisions
The primary operative sections of the Tariff Concession Order (TCO) No. 1056479 (section 269F, 269C, and 269P) outline the process for applying for and granting a tariff concession on specific goods. An applicant may request a TCO for goods under section 269F, provided the goods are not listed in section 269SJ as ineligible. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, particularly that no substitutable goods were produced in Australia on the application date (section 269C), a written TCO is issued under section 269P(3). This order declares the goods subject to a concession, granting them a reduced customs duty rate as specified in the Customs Tariff Act 1995.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that the goods in question are not listed in section 269SJ and that the application complies with the core criteria set out in section 269C. The CEO is mandated to review the application and decide whether it meets the criteria, which includes verifying that no substitutable goods were produced in Australia. If satisfied, the CEO must issue a TCO and publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. In this case, no submissions were received, and the TCO was granted accordingly.
Breaches of the conditions set out in the TCO or non-compliance with the requirements of the Customs Act 1901 may result in civil or criminal consequences. While the explanatory statement does not specify particular offences, general provisions within the Customs Act may include penalties for non-compliance. Under Australian law, offences related to customs duty evasion or misrepresentation can result in significant fines and imprisonment. The maximum penalties can vary depending on the severity and intent of the offence but may include substantial fines and imprisonment terms up to several years.
The Tariff Concession Order No. 1056479 specifically addresses the tariff concession for certain slurry batch mixers, reducing the duty from 5% to free. This concession does not affect the rights of any person, including the Commonwealth, in relation to actions taken before the order's effective date. Importers of the specified goods can apply for a refund of duty paid on imports since the TCO's effective date, as per Regulation 126(1)(r). Importantly, the TCO does not impose any liabilities on any person, ensuring that no one is disadvantaged by the order.