EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1115195
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.
Woodside Energy applied for a TCO in respect of certain liners on 13 May 2011.
Instrument
TCO No 1115195 was made on 08 August 2011. It declares that those certain liners 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. 1115195 is taken to have come into force on 13 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 Tariff Concession Instrument No. 1115195, made under the Customs Act 1901, was enacted in 2012 to address the specific needs of Woodside Energy in relation to certain liners that they sought to import. The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs), which allow for reduced customs duties on certain goods. This instrument was introduced to ensure that Woodside Energy could benefit from a zero rate of duty on specified liners, as long as it was established that no substitutable goods were being produced in Australia at the time of the application. The instrument was created by the Chief Executive Officer of Customs, following an application by Woodside Energy on 13 May 2011, and came into force on the same date. This legislative action ensures that importers of the specified goods can apply for a refund of any duty paid since the effective date of the TCO, thereby providing a financial benefit without imposing any new liabilities or disadvantaging existing rights holders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which may be issued by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking to import goods into Australia that qualify for a reduced rate of customs duty. The scope of the Act extends to goods that do not have a substitutable equivalent produced domestically and are not specified in section 269SJ as ineligible for a TCO. The geographic reach of the Act is national, as it applies across the Commonwealth of Australia. The Act allows for the application of TCOs to be made through subordinate instruments, which can extend or specify further details on the application and effects of such concessions. The Tariff Concession Instrument No. 1115195, for example, applies to certain liners for which Woodside Energy sought a concession, reducing the customs duty from the general rate of 5% to free. The instrument came into force on the date of application, 13 May 2011, without retroactively affecting the rights of any person or imposing new liabilities on anyone.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1115195, as referenced in sections 269C, 269B, and 269P(3) of the Customs Act 1901, establish the criteria for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO). A TCO reduces the customs duty on specified goods to zero, provided that the CEO is satisfied that the application meets the core criteria. These criteria require that, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must make a written order if these criteria are met, and this order is published in the Gazette, inviting any objections.
The obligations imposed by the Act on the parties involved, particularly the CEO, include accepting and processing valid TCO applications, ensuring compliance with the core criteria outlined in section 269C, and making a written TCO if the criteria are met. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, providing an opportunity for any objections. In this case, the CEO did not receive any submissions, indicating compliance with the Act's requirements.
Under the Customs Act 1901, breaches of the provisions governing TCOs can lead to various consequences. The Act does not specify particular offences or penalties for failing to comply with the TCO provisions. However, the general legal framework for customs and tariff regulation may apply, and penalties for non-compliance with customs laws can be severe, including fines and imprisonment, depending on the nature and extent of the breach. The maximum penalties can vary based on the specific breach, but they can be significant for serious violations.