EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603541
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 electrolytic recovery plant on 8 February 2006.
Instrument
TCO No 0603541 was made on 21 April 2006. It declares that those certain zinc electrolytic recovery 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. 0603541 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. 0603541 was enacted in 2006 under the Customs Act 1901 to address the need for providing tariff concessions on specific imported goods that are not produced in Australia and for which there are no suitable domestic substitutes. This instrument was developed to facilitate smoother trade and economic activities by reducing the customs duty on certain zinc electrolytic recovery plants, thus promoting efficiency and competitiveness within the relevant industry. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the legislative framework provided by the Customs Act, which empowers the CEO to make Tariff Concession Orders if certain criteria are met, notably the absence of substitutable goods produced in Australia.
The policy objective behind this instrument, as outlined in the Customs Act, is to support Australian industries by ensuring that no substitutable goods are produced domestically, thereby encouraging imports of these specific goods at a reduced duty rate. The instrument was introduced to the public for consultation as required by the Act, though no submissions were received against the concession. The tariff concession became effective from the date the application was lodged, providing immediate benefits to importers eligible for duty refunds on goods imported since that date, without imposing any liabilities on other parties.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. These orders apply to specific goods for which an application has been submitted and approved by the CEO, provided the goods do not fall under the list of excluded items stipulated in section 269SJ of the Act. The application process requires that no substitutable goods, defined in section 269D of the Act, are produced in Australia in the ordinary course of business as per section 269C. This mechanism is intended to benefit importers by potentially reducing the duty rate on certain goods. For instance, Tariff Concession Instrument No. 0603541, applied to certain zinc electrolytic recovery plants, lowered the duty rate from the general 5% to 0%. The instrument was effective from the date the application was lodged, 8 February 2006, without retroactively affecting any existing rights or imposing new liabilities on individuals other than the Commonwealth. The scope of the TCO is confined to the goods specified in the instrument and does not extend to any other goods unless specifically included in subsequent orders or amendments.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0603541, under the Customs Act 1901 (sections 269C, 269F, 269P(3)), establish the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). A TCO application can be submitted by a person to the CEO (section 269F) and, if the application does not pertain to goods excluded by section 269SJ, the CEO must evaluate whether it meets the core criteria (section 269C). If the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), they are required to issue a written TCO (section 269P(3)). This TCO declares the specified goods as subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a reduced rate of customs duty.
The obligations imposed by the Act on the parties involved are primarily directed towards the CEO of Customs. Once a valid TCO application is accepted, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0603541, no objections were received, facilitating the CEO's decision to issue the TCO. Importers and other stakeholders must comply with the terms of the TCO, including applying for duty refunds where applicable (paragraph 126(1)(r) of the Regulations).
In terms of consequences, the Act does not specify any criminal offences or penalties for breaches of a TCO or its provisions. However, the Act ensures that the TCO does not retroactively disadvantage any person or impose liabilities on anyone for actions taken prior to the TCO's effective date. The TCO itself does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth. The primary impact of the TCO is beneficial to importers, who can apply for refunds of duty paid on the goods subject to the TCO from the date the TCO is taken to have come into force.