EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130949
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.
Baker Hughes Wireline (Baker Atlas) applied for a TCO in respect of certain oil and/or gas well slickline winches on 12 September 2011.
Instrument
TCO No 1130949 was made on 06 December 2011. It declares that those certain oil and/or gas well slickline winches 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. 1130949 is taken to have come into force on 12 September 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 through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act aims to address the issue of providing tariff concessions for certain goods that are not produced in Australia and for which no substitutable goods are available in the ordinary course of business. Specifically, the Customs Act 1901 allows for the application of lower rates of customs duty to goods that are the subject of a TCO. The policy objective of this Act, as highlighted in the explanatory statement, is to ensure that when the CEO is satisfied that an application meets the core criteria, including the absence of substitutable goods produced in Australia, a TCO is issued, thereby granting tariff concessions to the specified goods. The TCO process involves the CEO considering applications from interested parties and, upon meeting the criteria, publishing notices in the Gazette and subsequently making the order.
Scope and Application
The Tariff Concession Instrument No. 1130949, issued under the Customs Act 1901, applies to specific goods—in this instance, certain oil and/or gas well slickline winches—that are subject to a Tariff Concession Order (TCO) application. The Act allows the Chief Executive Officer (CEO) of Customs to grant a TCO, thereby applying a lower rate of customs duty to the specified goods. The CEO's decision to grant a TCO hinges on the absence of substitutable goods produced in Australia and the meeting of the core criteria outlined in the Act. This instrument is effective across the Commonwealth of Australia and does not impose any liabilities on individuals or entities, instead potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. Exclusions apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument does not affect existing rights or impose liabilities for actions taken prior to its registration.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1130949 under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, and section 269C, which sets out the core criteria for approving such an application. According to section 269F, an applicant must submit a request to the CEO if they wish to benefit from a lower customs duty rate. The CEO then assesses whether the application complies with the core criteria specified in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they are mandated to issue a written TCO, as outlined in section 269P(3).
The Act imposes several obligations on both the CEO and the applicant. For the CEO, the obligations include accepting a valid TCO application, assessing whether the application meets the core criteria, and if satisfied, issuing a TCO. The CEO must also publish a notice in the Gazette, as stipulated in subsection 269K(1), inviting any interested party to submit a submission opposing the TCO. For the applicant, the main obligation is to ensure that the application is complete and meets all the specified criteria. Additionally, the applicant must be aware that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, and thus, it does not impose any liabilities on any person.
Offences and penalties under the Customs Act 1901 are not explicitly detailed in the provided text regarding TCOs. However, it is generally understood that breaches of customs regulations, including the misuse or fraudulent claims under a TCO, could lead to both civil and criminal consequences. Civil penalties could include fines, while criminal penalties might encompass imprisonment, reflecting the severity of the breach. The maximum penalties would be determined by the specific nature and extent of the breach, as outlined in the broader customs legislation and associated regulations.