EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603534
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 zinc mills on 8 February 2006.
Instrument
TCO No 0603534 was made on 24 July 2006. It declares that those certain zinc mills 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. One submission objecting to the TCO application was received from Abon Engineering Pty Ltd.
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. 0603534 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 was enacted to establish a framework for the regulation of customs duties and related matters in Australia. It provides a mechanism for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on certain goods. The Act was introduced to address the need for a flexible tariff system that could respond to specific economic and trade circumstances by providing tariff relief on goods where appropriate. The explanatory statement for Tariff Concession Instrument No. 0603534 clarifies that this instrument was made to address a particular application from Zinifex Ltd for a TCO concerning certain zinc mills. The policy objective, as outlined in the Act, is to ensure that TCOs are granted only when no substitutable goods are produced in Australia, thereby promoting fair competition and supporting specific industries where necessary.
Scope and Application
The Tariff Concession Instrument No. 0603534 under the Customs Act 1901 applies to specific goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation targets entities such as Zinifex Ltd, which applied for the TCO in respect of certain zinc mills. The Act's scope includes any person who applies for a TCO for goods that meet the core criteria, specifically where no substitutable goods are produced in Australia. The geographic reach of the Act is national, as it is administered under the Commonwealth. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The commencement of the TCO, as stated in the explanatory statement, is effective from the date the application was lodged, in this case, 8 February 2006. The application does not affect the rights of any person prior to the date of registration and does not impose any liabilities on any person. Subordinate instruments may extend or restrict the application, but this specific Act focuses on the concession of customs duty for the specified goods.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0603534 are sections 269C, 269F, and 269P(3) of the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), while section 269C specifies that the application meets the core criteria if no substitutable goods were produced in Australia on the date the application was lodged. Section 269P(3) requires the CEO to make a written order if the application meets these criteria. This instrument was made in response to Zinifex Ltd's application for a TCO for certain zinc mills, which was approved because no substitutable goods were produced in Australia, resulting in a duty rate of 0% for these goods, down from the general rate of 5%.
The Customs Act 1901 imposes several obligations and requirements on parties involved in the process of applying for a TCO. Firstly, applicants such as Zinifex Ltd must ensure that their application is not for goods specified in section 269SJ, which are ineligible for TCOs. They must also provide sufficient evidence that no substitutable goods were produced in Australia on the date of the application. The CEO, on the other hand, must review the application against the core criteria outlined in section 269C and make a decision accordingly. If the application meets the criteria, the CEO must issue a written TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties, as mandated by subsection 269K(1).
The Customs Act 1901 also outlines consequences for non-compliance with its provisions. However, the explanatory statement for this specific instrument does not detail any specific offences or penalties associated with breaches of the TCO provisions. It does, however, clarify that the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes new liabilities for actions taken prior to the TCO's effective date. It is worth noting that while the Act does not specify penalties for breaches related to TCOs, general provisions within the Customs Act may apply, which could include fines and imprisonment for more severe violations.
In summary, Tariff Concession Instrument No. 0603534 under the Customs Act 1901 allows for a zero percent duty rate on certain zinc mills, provided no substitutable goods were produced in Australia on the date of the application. The CEO must follow a specific process to evaluate and approve TCO applications, and interested parties have the opportunity to submit objections. While the Act does not explicitly state penalties for breaches of TCO provisions, it ensures that the rights of individuals are protected and that the TCO does not retroactively impose new liabilities.