EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134132
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 oil and gas exploration wireline tractors on 07 October 2011.
Instrument
TCO No 1134132 was made on 04 January 2012. It declares that those certain oil and gas exploration wireline tractors 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. 1134132 is taken to have come into force on 07 October 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 Australian Parliament, provides a framework for managing customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These TCOs allow for the application of lower rates of customs duty on specified goods, provided certain criteria are met. The instrument F2012L00508, also known as Tariff Concession Instrument No. 1134132, was introduced to address the specific needs of Schlumberger Australia Pty Ltd for concessional tariff treatment on certain oil and gas exploration wireline tractors. The instrument was enacted to provide a concessional rate of duty, reducing it from the general rate of 5% to free, on these specified goods upon the application being accepted as valid on 7 October 2011. The policy objective is to facilitate the import of goods that are not substitutable with Australian-produced equivalents, thereby supporting industries that rely on imported specialised equipment.
Scope and Application
The Tariff Concession Instrument No. 1134132 under the Customs Act 1901 applies to specific oil and gas exploration wireline tractors. This Act allows for the application of tariff concessions, which reduce the customs duty on certain imported goods. The legislation applies to Schlumberger Australia Pty Ltd, as the entity that applied for the tariff concession order (TCO). The application for this concession was lodged on 7 October 2011, and the TCO came into force on that date. The Act’s application extends to ensuring that the goods in question are not substitutable by products manufactured within Australia, a criterion essential for the concession to be granted. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and the application of customs duties at the national level. The Act excludes goods that are specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The TCO does not affect the rights of any person as at the date of registration to the detriment of that person and does not impose liabilities on any person other than the Commonwealth. The instrument can be extended or restricted through subordinate instruments, which may provide further details or exceptions to the application of the TCO.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 1134132, pertain to the establishment of Tariff Concession Orders (TCOs) for certain goods, particularly those specified in the instrument (section 269C). A TCO application must meet core criteria as outlined in section 269C, which necessitates that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269P(3)). If these criteria are met, the Chief Executive Officer of Customs (CEO) is mandated to issue a written TCO order that specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)).
The Act imposes specific obligations on both the CEO and applicants for TCOs. The CEO must ensure that a TCO application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. Additionally, the CEO must assess whether the application meets the core criteria set out in section 269C, and if so, proceed to make the TCO (section 269P(3)). Applicants must provide sufficient evidence that no substitutable goods were produced in Australia on the day the application was lodged. The CEO also has a duty to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)).
In the event of a breach of the provisions outlined in the Customs Act 1901 or the associated regulations, there are both civil and criminal consequences. Although the explanatory statement does not specify exact penalties, breaches of customs laws typically attract fines and potential imprisonment. The severity of these penalties would depend on the nature and extent of the breach, as outlined in other relevant sections of the Act and any applicable regulations. The TCO itself does not impose liabilities on any person but rather provides tariff concessions that benefit eligible importers by potentially allowing them to apply for refunds of duty paid on the specified goods since the effective date of the TCO.