EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114830
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.
Schlumberger Australia Pty Ltd applied for a TCO in respect of certain injector lifters on 11 May 2011.
Instrument
TCO No 1114830 was made on 01 August 2011. It declares that those certain injector lifters 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. 1114830 is taken to have come into force on 11 May 2011.
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 Parliament of Australia, was amended to introduce a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on certain imported goods. This legislative instrument addresses the gap in the tariff regime by enabling the CEO to grant concessions where specific criteria are met, such as the absence of substitutable goods produced in Australia. The aim of this mechanism is to facilitate the importation of goods that are not readily available domestically, thereby promoting economic efficiency and consumer choice. The policy objective is to ensure that businesses can access necessary goods at reduced duty rates, thereby supporting competitive markets. Schlumberger Australia Pty Ltd’s application for a TCO concerning certain injector lifters, resulting in Instrument No. 1114830, exemplifies the application of this legislative framework.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), facilitates tariff concessions on goods specified in Schedule 4 to the Customs Tariff Act 1995, provided certain criteria are met. The Act applies to any person or entity that applies for a TCO, focusing specifically on goods that are not substitutable by Australian-produced goods in the ordinary course of business. This process is overseen by the Chief Executive Officer of Customs, who is tasked with ensuring that the application meets the core criteria before granting a concession. The geographic scope of this legislation is national, applying across Australia and governed by Commonwealth laws. Notably, the Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are explicitly excluded from TCOs. The commencement of a TCO is effective from the date of the application, and while it benefits importers by potentially reducing duty rates, it does not retroactively impose liabilities or disadvantage any party in relation to actions taken before the TCO's registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1114830 (TCO No 1114830) under the Customs Act 1901 are sections 269C, 269F, and 269P. 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 determines that the application meets the core criteria, they must make a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P). Section 269C outlines the core criteria for a TCO, which must be satisfied by the CEO before making the order. These criteria include ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes specific obligations and requirements on the parties involved. The CEO has the responsibility to assess whether a TCO application meets the core criteria and to make a written order if satisfied. The applicant must ensure their application is valid and meets the criteria outlined in the Act. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per subsection 269K(1). In this case, the CEO did not receive any submissions in response to the published notice.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the text for breach of the provisions under this TCO. However, general compliance with the Customs Act 1901 and related regulations is expected, and failure to adhere to these laws could result in penalties as prescribed in the Act. For instance, section 247 of the Customs Act 1901 outlines various offences and penalties for non-compliance with customs laws, which could include fines or imprisonment depending on the severity of the breach. The Tariff Concession Instrument itself does not detail specific penalties but rather sets out the conditions under which tariff concessions are granted.