EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603535
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 Limited applied for a TCO in respect of certain ball mills on 8 February 2006.
Instrument
TCO No 0603535 was made on 18 April 2006. It declares that those certain ball 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 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. 0603535 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 Tariff Concession Instrument No. 0603535, made under the Customs Act 1901, was enacted to provide a tariff concession on certain ball mills applied for by Zinifex Limited. The Act, enacted by the Australian Parliament, facilitates the reduction of customs duties on specific goods via Tariff Concession Orders (TCOs) when certain criteria are met. This particular instrument was introduced to address the problem of ensuring that Australian industries remain competitive by reducing the cost of importing certain goods that are not produced domestically. The policy objective is to support local industries by making imported goods more affordable, thereby encouraging their use and integration into Australian markets.
The Customs Act 1901 allows the Chief Executive Officer of Customs to make TCOs, which provide lower customs duty rates on specified goods. In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in the Act. Consequently, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies to these ball mills, resulting in a duty rate of free, down from the general rate of 5%. The TCO does not disadvantage any existing rights or impose new liabilities on individuals or entities, and it benefits importers who can now apply for a refund of duty on the goods imported since 8 February 2006, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0603535 under the Customs Act 1901 applies specifically to the application by Zinifex Limited for a Tariff Concession Order (TCO) regarding certain ball mills. The Act enables the Chief Executive Officer of Customs to make TCOs which apply a lower rate of customs duty to specified goods. This application process is available to any person who can demonstrate that the goods in question are not prohibited under section 269SJ and meet the core criteria outlined in sections 269C, 269D, 269E, and 269F of the Act. The geographic reach of this legislation is national, as the Customs Act 1901 is a Commonwealth Act and applies across Australia. The TCO applies to the ball mills from the date the application was lodged, which is 8 February 2006, and does not impose any liabilities or affect the rights of any person except to beneficially affect the rights of importers, who can apply for a refund of duty. The Act allows for the extension and restriction of application through subordinate instruments, which are not specified in this particular TCO.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0603535, as referenced in the Explanatory Statement, revolve around the concession of customs duty on specific goods. Section 269F of the Customs Act 1901 (the Act) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning goods. If the application satisfies the core criteria outlined in section 269C, the CEO is mandated to issue a written order granting the concession. Specifically, section 269P(3) stipulates that the CEO must declare the goods eligible for a lower duty rate if no substitutable goods are produced in Australia, as defined by section 269D and section 269E. The instrument, TCO No. 0603535, declares that certain ball mills are subject to a zero rate of duty, reducing it from the general rate of 5% as specified in the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on both the applicant and the CEO. The applicant must ensure that their application complies with the stipulations under section 269F, particularly that the goods do not fall under the exclusions listed in section 269SJ. The CEO, on the other hand, must verify that the application meets the core criteria, as outlined in section 269C, and must publish a notice inviting submissions from any interested parties, as per section 269K(1). In this instance, the CEO did not receive any submissions against the application for TCO No. 0603535. Once the CEO is satisfied that the application meets all criteria, they must issue the TCO as specified in section 269P(3).
The Act does not explicitly mention offences, penalties, or consequences for breaching the terms of a TCO. However, non-compliance with the Customs Act 1901 or the Customs Tariff Act 1995 could lead to civil or criminal penalties. For instance, knowingly making a false statement in relation to customs duty can incur a penalty of up to $11,000 for an individual or $55,000 for a corporation, as per section 245 of the Customs Act 1901. While the TCO itself does not detail specific penalties for breach, adherence to the overarching Acts is crucial to avoid such repercussions.