EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603546
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 casting plant on 8 February 2006.
Instrument
TCO No 0603546 was made on 21 April 2006. It declares that those certain zinc casting 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. 0603546 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, enacted by the Commonwealth Parliament, provides a framework for the administration of customs and excise duties, including the ability to grant tariff concessions for specific goods. The Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty for certain goods, provided the application meets specific criteria such as the absence of substitutable goods produced in Australia. This legislative instrument, F2006L01258, addresses the need to facilitate the importation of specific goods by reducing their duty rates, thereby encouraging trade and investment. In this instance, the instrument, TCO No. 0603546, was enacted on 21 April 2006, following an application by Zinifex Ltd for tariff concessions on certain zinc casting plant. The objective is to ensure that the importation of these goods is made more cost-effective, aligning with the policy to support industries by reducing their input costs.
Scope and Application
The Tariff Concession Instrument No. 0603546 pertains to the Customs Act 1901 and its application to the Customs Tariff Act 1995. This legislation applies to entities and individuals involved in the importation of specific goods, namely certain zinc casting plant, and is administered by the Chief Executive Officer of Customs. The instrument’s geographic reach is national, as it operates within the framework of Commonwealth law. The application is specifically directed towards importers and manufacturers of goods, with the primary focus being on those importing or producing zinc casting plant. The instrument establishes that no substitutable goods were produced in Australia, satisfying the core criteria set out in section 269C of the Act, thereby qualifying these goods for a zero percent duty rate under the specified item of the Customs Tariff. The instrument does not impose any exclusions or exemptions beyond what is outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a Tariff Concession Order. The commencement date of the instrument aligns with the date the application was lodged, ensuring that the concessions apply retroactively from that date.
Key Provisions
The Tariff Concession Order No. 0603546, made under section 269F of the Customs Act 1901, allows for a reduction in customs duty for certain zinc casting plants. Under this order, the general duty rate of 5% (section 400-10 of the Customs Tariff Act 1995) is reduced to 0% for the specified goods. The CEO of Customs must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business for the order to be made (section 269C). The order also mandates that the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the order should not be made (subsection 269K(1)). In this case, no submissions were received, and the order came into effect on 8 February 2006, the date the application was lodged (subsection 269S(1)). This date is also when the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since that date (paragraph 126(1)(r) of the Customs (Tariff Concessions) Regulations 1990).
Under the Act, the CEO is required to assess the validity of an application for a Tariff Concession Order. This involves confirming that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must also determine whether the application meets the core criteria set out in section 269C, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Once these criteria are met, the CEO must make a written order (section 269P(3)).
Failing to comply with the requirements of the Customs Act 1901 and associated regulations may result in legal consequences. For example, incorrect or fraudulent applications for a Tariff Concession Order could lead to penalties under section 283 of the Customs Act, which covers fraudulent conduct. The maximum penalty for such offences is imprisonment for five years or a fine of 5,000 penalty units, or both. Additionally, section 284 addresses offences related to the contravention of certain sections of the Act, with penalties including fines of up to 10,000 penalty units or imprisonment for two years, or both, depending on the nature and severity of the offence. Furthermore, the Act includes provisions for civil penalties where applicable, which may include fines or other financial penalties.