EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603533
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.
Zinifex Ltd applied for a TCO in respect of certain integrated underground mining plant on 8 February 2006.
Instrument
TCO No 0603533 was made on 5 May 2006. It declares that those certain integrated underground mining plant 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 0%.
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. 0603533 is taken to have come into force on 8 February 2006.
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, establishes a framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that apply reduced rates of customs duty to certain goods. This legislative instrument aims to address the issue of ensuring fair trade practices and supporting industries by allowing for tariff reductions where appropriate. TCO No. 0603533, made under this Act, was introduced to provide tariff concessions on specific integrated underground mining plant, as Zinifex Ltd had applied for a concession on 8 February 2006. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. The TCO declares that these particular mining plant goods are subject to a zero per cent duty rate, which is a reduction from the general rate of five per cent. The policy objective here is to support Australian industries by potentially lowering costs and increasing competitiveness without disadvantaging any pre-existing rights or imposing new liabilities on individuals.
Scope and Application
The Tariff Concession Instrument No. 0603533, issued under the Customs Act 1901, applies to goods specified in the application for a Tariff Concession Order (TCO), specifically those that are not produced in Australia in the ordinary course of business and for which a lower rate of customs duty is sought. The legislation is administered by the Chief Executive Officer of Customs (CEO), who evaluates applications against core criteria outlined in section 269C of the Act. In this instance, the CEO assessed the application from Zinifex Ltd concerning certain integrated underground mining plant and determined that a TCO was warranted as no substitutable goods were produced in Australia. The application of the TCO, which reduces the duty rate from 5% to 0%, is applicable from the date the application was lodged, 8 February 2006, as per the provisions in section 269S of the Act. This legislative instrument is designed to benefit importers of the specified goods by allowing them to apply for a refund of duty paid on imports since the effective date of the TCO. Importantly, the TCO does not impose any new liabilities or disadvantage any person in respect of actions taken prior to the date of registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0603533 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C sets out the core criteria that a Tariff Concession Order (TCO) application must meet, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P allows the Chief Executive Officer of Customs (CEO) to make a written order if satisfied that the application meets the core criteria. Section 269S specifies that the TCO is to be taken to have come into force on the day the application for the TCO was lodged.
The Act imposes certain obligations and requirements on the parties involved. Under section 269F, a person can apply to the CEO for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria specified in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P. Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Any breaches of the requirements or obligations set out in the Customs Act 1901 could result in various civil and criminal consequences. For instance, failure to comply with the provisions regarding the application process or the publication of notices could lead to legal action. While the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally can result in fines and, in severe cases, imprisonment. The maximum penalties depend on the nature and severity of the breach, as outlined in other sections of the Customs Act 1901 and related regulations. Additionally, the Act ensures that the rights of non-Commonwealth persons are not adversely affected by the issuance of a TCO, and it provides for potential refunds of duty for importers of the affected goods.