EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603543
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 lead gold zinc silver and cadmium refinery plant on 8 February 2006.
Instrument
TCO No 0603543 was made on 5 May 2006. It declares that those certain lead gold zinc silver and cadmium refinery 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. 0603543 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 Order No. 0603543, made under the Customs Act 1901, was enacted in 2006 to provide tariff concessions on certain lead, gold, zinc, silver, and cadmium refinery plant. This legislation was introduced to address the need for a reduction in customs duty for specific imported goods, which would stimulate economic activity by making these imports more affordable. The order was initiated by Zinifex Ltd, who applied for a tariff concession on 8 February 2006. The Chief Executive Officer of Customs (CEO) assessed the application and determined that the concession could be granted as no substitutable goods were produced in Australia at the time. The order came into effect on the date of the application, 8 February 2006, and provides for a 0% duty rate on the specified refinery plant, down from the general rate of 5%. This initiative aligns with the policy objective of facilitating economic growth by making certain imported goods more competitively priced.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs), which apply reduced rates of customs duty to specified goods. This Act applies to any person or entity that wishes to import goods into Australia, provided those goods meet the criteria for a TCO. The process begins with an application to the CEO, who must determine if the goods in question do not have substitutable products produced in Australia and satisfy the core criteria set out in the Act. TCO No. 0603543, made on 5 May 2006, exemplifies this process, reducing the duty rate from 5% to 0% on certain lead gold zinc silver and cadmium refinery plant as no substitutable goods were produced in Australia at the time of application. This instrument, which came into force on the date of application, benefits importers by potentially allowing them to claim refunds on duties paid on these goods imported since the effective date of the TCO. The Act ensures that no existing rights or liabilities of non-Commonwealth persons are adversely affected by the concession, and it extends across all jurisdictions within Australia, encompassing both state and federal levels.
Key Provisions
The main operative sections of this legislation, found in the Customs Act 1901, establish a scheme for Tariff Concession Orders (TCOs) (sections 269B, 269C, 269F, and 269P). Under section 269F, an applicant can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), they must make a written order (section 269P(3)). The CEO is required to publish a notice in the Gazette after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). The TCO is considered to have come into force on the day the application was lodged (subsection 269S(1)).
The Customs Act 1901 imposes obligations on several parties. The CEO must review applications for TCOs and decide if they meet the core criteria set out in section 269C. If the application is valid, the CEO is required to publish a notice in the Gazette and consider any submissions received in response to this notice. Importers of goods subject to a TCO can apply for a refund of duty on goods imported since the day the TCO is considered to have come into force (paragraph 126(1)(r) of the Regulations).
Breaches of the Customs Act 1901 can result in offences and penalties. However, the explanatory statement does not specify any particular offences or penalties related to the making of TCOs. The consequences of non-compliance with the Act would typically be determined by the specific provisions of the Act and any applicable regulations or subsidiary legislation. It is important to note that the explanatory statement does not provide detailed information on potential offences or penalties, focusing instead on the procedural aspects of TCOs.