EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603568
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 processing plant on 8 February 2006.
Instrument
TCO No 0603568 was made on 21 April 2006. It declares that those certain zinc processing 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. 0603568 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. 0603568, enacted in 2006, addresses the need for streamlined processes in the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901. This instrument, issued by the Chief Executive Officer of Customs, aims to facilitate the reduction of customs duty rates on specified goods, in this case, certain zinc processing plants, upon the application by Zinifex Ltd. The policy objective is to support Australian businesses by reducing the cost of importing critical industrial equipment, thus fostering economic efficiency and competitiveness. The instrument operates under the framework set by the Customs Act, ensuring that applications for TCOs are assessed against criteria that prevent the displacement of domestic production and the imposition of undue burdens on non-Commonwealth entities. The commencement date of the TCO aligns with the application date, thereby ensuring that the benefits of the concession are effective from the outset of the application process.
Scope and Application
The Tariff Concession Instrument No. 0603568 is a legislative measure under Part XVA of the Customs Act 1901, which facilitates the reduction or exemption of customs duty on certain goods. Specifically, it applies to any entity that applies for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO), provided that the goods in question are not specified in section 269SJ of the Act. This means that goods that cannot be subject to a TCO, such as those that are of strategic importance or are otherwise restricted, are excluded from this concession. The application process is stringent, requiring the CEO to ensure that no substitutable goods are produced in Australia before granting a TCO. The instrument was made in response to an application by Zinifex Ltd for certain zinc processing plant, and it effectively grants these goods a zero per cent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO must publish a notice of the TCO application in the Gazette to allow for public submissions, although in this case, none were received. The TCO applies retroactively from the date the application was lodged, benefiting importers by allowing them to apply for a refund of duty on goods imported since that date. Notably, the TCO does not impose any new liabilities or adversely affect the rights of any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0603568 under the Customs Act 1901 establishes a concession that reduces the customs duty on certain zinc processing plant from 5% to 0%. This concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, and it comes into effect from the date the application for the concession was lodged, 8 February 2006 (section 269S(1)). To be eligible for this concession, the goods must meet specific criteria outlined in the Customs Act, primarily that no substitutable goods were produced in Australia at the time the application was made (section 269C).
For an entity to benefit from this concession, it must ensure that the goods in question are imported after the effective date and that the application process was followed correctly. The entity must also ensure that any imported goods meet the definition of 'substitutable goods' as outlined in section 269D of the Customs Act. The Chief Executive Officer of Customs (CEO) has the authority to make this concession if the application is deemed valid and no objections are raised within the stipulated period (section 269K(1)).
Failure to comply with the conditions set forth in the Customs Act and the Tariff Concession Instrument may lead to legal consequences. The Act does not specify explicit penalties for breaches but implies that any misapplication or misuse of the concession could be subject to general legal actions under the Customs Act. Importers who do not comply with the conditions may not be eligible for the duty concession and could potentially face financial penalties or other legal repercussions.
In addition, the Tariff Concession Instrument mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the concession should not be granted (subsection 269K(1)). If the CEO receives any objections, they must consider them before deciding whether to proceed with the concession. In this case, no objections were received, and thus, the concession was granted without any impediments.