Notice of Intention to Propose Customs Tariff Alterations - Notice (No. 2) 2021

Overview

The Customs Act 1901, a foundational piece of Australian legislation, was enacted to regulate the importation and exportation of goods, including the imposition of tariffs and duties. The Customs (Tariff Alteration) Notice (No.2) 2021, published under section 273EA of the Customs Act, was introduced to address a specific gap in tariff treatment for goods used in the automotive industry, particularly in relation to the Automotive Transformation Scheme. This Notice, issued by Matthew Duckworth, delegate of the Minister for Home Affairs, aims to propose a tariff alteration in Parliament to provide a temporary duty-free status for certain goods related to motor vehicles designed or engineered in Australia by entities registered under the Automotive Transformation Scheme Act 2009 as of 30 March 2021. The intended policy objective is to support and incentivise the Australian automotive industry during a critical period, as reflected in the alteration to the Customs Tariff Act 1995 specified in the Schedule, which takes effect from 1 April 2021 until 30 June 2025.

Scope and Application

The Customs Act 1901, as notified in Gazette C2021G00231, outlines the intention to propose an amendment to the Customs Tariff Act 1995. This amendment, scheduled to take effect from 1 April 2021, concerns the introduction of a new tariff item, number 39A, which applies to goods used in the testing, quality control, manufacturing, evaluation, or engineering development of motor vehicles and their components. This new item specifically targets goods intended for use by automotive service providers who were registered under the Automotive Transformation Scheme as of 30 March 2021. The proposed tariff alteration is limited to the period starting on 1 April 2021 and ending on 30 June 2025. The scope of this legislation is national, affecting entities and individuals within the automotive industry in Australia. The notice of intention to propose this amendment is issued by Matthew Duckworth, a delegate of the Minister for Home Affairs, as per section 273EA of the Customs Act 1901, ensuring compliance with parliamentary procedures.

Key Provisions

The main operative sections of the Customs Act 1901, as referenced in the Notice, pertain to the proposed alteration to the Customs Tariff. Specifically, section 273EA allows for the Minister for Home Affairs to delegate the authority to propose changes to the Customs Tariff, which in this case has been exercised by Matthew Duckworth, a delegate of the Minister. The Notice (No.2) 2021, dated 26 March 2021, indicates an intention to propose a tariff alteration that will affect goods used in the testing, quality control, manufacturing, evaluation or engineering development of motor vehicles or components designed or engineered in Australia by an automotive service provider registered under the Automotive Transformation Scheme Act 2009. The alteration is set to take effect from 1 April 2021. The obligations and requirements imposed by this Act on the parties involved are centred around the registration and compliance with the Automotive Transformation Scheme. Automotive service providers who were registered under this scheme as of 30 March 2021 will have their goods specified in the Schedule to the Notice exempted from certain duties. This exemption is conditional on the goods being used for the purposes mentioned in the Schedule and the duty calculation period falling between 1 April 2021 and 30 June 2025. The prescribed by-laws that define the specifics of the exempted goods must be adhered to by all parties to ensure compliance with the tariff changes. The Notice does not explicitly state any offences, penalties, or civil/criminal consequences for breach of the Customs Tariff alterations. However, it is implicit that failure to comply with the specified conditions for exemption, or misrepresentation of the goods’ use, could result in penalties under the broader Customs Act 1901. These could include fines and other legal repercussions for non-compliance, with the maximum penalties varying depending on the nature and severity of the breach. The Customs Act generally provides for enforcement actions against those who contravene its provisions, which would apply equally to the specific alterations proposed in this Notice.