Customs By-law No. 2100084

Overview

The Customs By-law No. 2100084, enacted under section 271 of the Customs Act 1901, was introduced to address the need for a temporary measure to support research and development activities within the Australian automotive industry, particularly focusing on the testing, quality control, manufacturing, evaluation, or engineering development of motor vehicles. This by-law was established in response to the temporary nature of item 39A of Schedule 4 to the Customs Tariff Act 1995, which provides for a 'Free' duty rate on specified imported goods used by registered automotive service providers under the Automotive Transformation Scheme Act 2009. The policy objective, as outlined in the explanatory statement, is to ensure continued support for the automotive sector by facilitating the import of necessary goods without incurring customs duty, while also imposing conditions to ensure compliance and prevent misuse. The by-law was enacted by the Comptroller-General of Customs and commenced on 1 April 2021, following targeted consultation with relevant stakeholders.

Scope and Application

The Customs By-law No. 2100084, issued under the Customs Act 1901 and the Customs Tariff Act 1995, applies to specific goods imported for use in testing, quality control, manufacturing, evaluation, or engineering development of motor vehicles designed or engineered in Australia by a person registered as an automotive service provider under the Automotive Transformation Scheme Act 2009 as of 30 March 2021. The by-law specifies that these goods, or components intended for inclusion in such vehicles, are dutiable at the rate of 'Free'. This exemption is temporary, covering imported goods within the period starting from 1 April 2021 and ending on 30 June 2025. To ensure compliance with the conditions set forth in item 39A, the by-law mandates the lodging of a security with the Department of Home Affairs. The by-law also stipulates that the exemption is contingent on the goods being exported, destroyed, or disposed of in a manner approved by a Collector within twelve months of entry for home consumption, or within a further period approved by the Collector.

Key Provisions

The Customs By-law No. 2100084, made under Section 271 of the Customs Act 1901, primarily deals with the application of duty on certain imported goods related to the automotive sector in Australia. According to the explanatory statement, Section 18 of the Customs Tariff Act 1995 allows for the calculation of concessional duty, and Item 39A of Schedule 4 to the Customs Tariff Act provides that goods for use in testing, quality control, manufacturing, evaluation, or engineering development of motor vehicles are dutiable at the rate of ‘Free’. This applies to goods used by automotive service providers registered under the Automotive Transformation Scheme as of 30 March 2021, for the period starting 1 April 2021 and ending 30 June 2025. The primary requirement under this by-law, as stated in paragraph 2, is that these specified motor vehicles and their components must be prescribed in the by-law. Additionally, paragraph 3 sets a condition that the application of Item 39A to these goods is contingent upon them being exported, destroyed, or disposed of in a manner approved by a Collector within twelve months of the date of entry for home consumption, or within a further period approved by the Collector. This ensures that the goods are not used beyond their intended purpose, thereby maintaining the integrity of the duty exemption. Parties governed by this Act are obligated to comply with the conditions set out in the by-law. They must ensure that the goods specified in the by-law are either exported, destroyed, or disposed of in a manner approved by a Collector, and within the stipulated time frames. Failure to do so may result in the goods being subject to duty, or other penalties as prescribed by the Customs Act 1901. Additionally, a security must be lodged with the Department of Home Affairs to ensure compliance with the conditions outlined in the by-law. Any breach of the conditions set by the by-law may result in civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, under the Customs Act 1901, penalties for breaches can include fines and, in severe cases, imprisonment. The exact penalty would depend on the nature and severity of the breach, and would be determined by the relevant authorities. The requirement to lodge a security further underscores the seriousness with which the by-law is to be taken, as it serves as a safeguard against non-compliance.