EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603544
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 sizing handler plant on 8 February 2006.
Instrument
TCO No 0603544 was made on 5 May 2006. It declares that those certain sizing handler 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. 0603544 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. 0603544 was enacted in 2006 under the Customs Act 1901 to provide relief from customs duties for certain goods. This instrument, issued by the Chief Executive Officer of Customs, applies to specific sizing handler plants, reducing their customs duty from 5% to 0%. The purpose of this instrument is to ensure that Australian businesses have access to necessary equipment without being burdened by high customs duties, thus supporting economic growth and competitiveness. The instrument was introduced to address the problem of high import duties on specific goods that could potentially be produced in Australia but are not currently being manufactured domestically. The enacting body, the Chief Executive Officer of Customs, must assess applications for tariff concessions and determine whether the goods in question meet the core criteria set out in the Act, including the absence of substitutable goods produced in Australia. The policy objective is to promote fair trade practices and support Australian industry by ensuring that businesses can access essential equipment at a lower cost.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the application of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that qualify for reduced customs duty rates under a TCO. The scope of the Act encompasses all goods where no substitutable goods are produced in Australia in the ordinary course of business, as defined under sections 269D, 269E and 269F of the Act. The application process involves an assessment by the CEO to ensure that the goods in question do not fall under the categories specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument, TCO No. 0603544, concerns certain sizing handler plant and was issued on 5 May 2006, effective from the date the application was lodged on 8 February 2006, as stipulated under section 269S(1) of the Act. This instrument reduces the duty on these specific goods from 5% to 0%. The Act’s jurisdictional reach is national, applying across Australia as a Commonwealth Act, and it does not disadvantage any person other than the Commonwealth nor impose any liabilities on individuals or entities for actions taken prior to the registration of the TCO.
Key Provisions
The key operative sections of this legislation revolve around the process and criteria for granting Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Once the application is deemed valid and does not concern goods specified in section 269SJ, the CEO must determine whether the application meets the core criteria outlined in section 269C. This involves ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the core criteria are met, the CEO must issue a TCO, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, with a specified rate of duty, which in this case is 0%.
The obligations imposed by the Act on the parties or entities it governs are primarily on the CEO of Customs. The CEO must ensure that any TCO application complies with the criteria set out in the Act and must issue a written TCO if the application meets these criteria. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why a TCO should not be made. In this instance, no submissions were received, facilitating the issuance of the TCO. Furthermore, the TCO must be backdated to the date the application was lodged, as per subsection 269S(1), ensuring that it does not adversely affect any pre-existing rights or impose new liabilities on any person.
The legislation also outlines potential consequences for non-compliance or misuse of the provisions. Although specific offences and penalties are not detailed within the explanatory statement, the general framework under the Customs Act 1901 and related regulations would apply. Typically, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The precise penalties would be determined by the relevant courts based on the specific circumstances of any non-compliance.