EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117414
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.
Weatherford Australia applied for a TCO in respect of certain wireline logging system on 01 June 2011.
Instrument
TCO No 1117414 was made on 22 August 2011. It declares that those certain wireline logging system 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. 1114714 is taken to have come into force on 01 June 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise, including the ability to grant tariff concessions. To address the gap in providing relief from customs duty on certain imported goods, the Act allows for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). The policy objective is to provide tariff relief on imported goods where no suitable Australian-made alternatives exist, thus encouraging the importation of goods that are not domestically produced. Instrument No. 1117414, made under this Act on 22 August 2011, grants a tariff concession for certain wireline logging systems, reducing the duty from 5% to free. This concession applies from 1 June 2011, the date of the application, and allows for duty refunds on imports of these goods from that date. The instrument ensures that no existing rights or liabilities are adversely affected by its implementation.
Scope and Application
The Tariff Concession Instrument No. 1117414 under the Customs Act 1901 applies to specific wireline logging systems for which Weatherford Australia applied on 1 June 2011. The Act allows for the concession of tariff rates on goods that meet certain criteria, in this case, those for which no substitutable goods are produced in Australia in the ordinary course of business. The concession, once approved by the Chief Executive Officer of Customs, reduces the duty rate from the general rate of 5% to a free rate for these specific goods. The instrument applies nationally and its effect is to confer benefits to importers of these goods by potentially allowing them to apply for a refund of duties paid on imports since the date the TCO was taken to have come into force. There are no reported submissions against the TCO, and it does not disadvantage or impose liabilities on any person other than the Commonwealth in respect of actions taken before its registration.
The scope of the legislation extends to the national level and is subject to the conditions outlined in the Customs Act 1901 and the Customs Tariff Act 1995. Any exclusions or exemptions are those specified in section 269SJ of the Act, which outlines the goods that cannot be subject to a TCO. The application of the Act is not restricted by any subordinate instruments in this instance, as the TCO directly addresses the specific goods mentioned in the application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1117414 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria (section 269C), they must make a written order (section 269P(3)). This instrument (section 269K) requires the CEO to publish a notice in the Gazette, inviting submissions from the public, though no submissions were received in this case.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for the CEO to ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. This determination is crucial under section 269C. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) to allow for public submissions regarding the application. In this instance, the CEO did not receive any submissions, which facilitated the issuance of TCO No. 1117414.
In terms of penalties and consequences for breach, the Customs Act 1901 does not specify maximum penalties within the explanatory statement provided. However, failure to comply with the conditions or requirements set out in the TCO could result in civil or criminal consequences. Such breaches might include providing false information during the application process or misusing the concession granted by the TCO. While specific penalties are not outlined, it is implied that non-compliance could lead to legal actions, fines, or other enforcement measures as deemed appropriate by the relevant authorities.
Overall, the instrument and the Act establish a framework for granting tariff concessions to ensure that certain goods are subject to lower customs duty rates. This is contingent on meeting the core criteria and ensuring that no substitutable goods are produced domestically. The process is designed to be transparent, with public consultation as a part of the application process. However, the Act does not detail specific penalties for non-compliance, indicating that any breaches would be subject to the broader legal provisions governing customs and duty regulations.