EXPLANATORY STATEMENT

INSTRUMENT OF REVOCATION NO. 2 (2005)

Customs Act 1901

Background

Section 271 of the Customs Act 1901 (the Act) provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Chief Executive Officer of Customs may make by-laws for the purposes of that item.  A Customs Tariff is defined in section 4 of the Act to mean an Act imposing duties of customs.  The Customs Tariff Act 1995 (the Tariff Act) is a Customs Tariff for the purposes of the Act.

Item 65 of Schedule 4 to the Tariff Act provides that the following goods are dutiable at the rate of ‘Free’:

Goods, the subject of a Commercial Tariff Concession Order or a Tariff Concession Order, the number of which is as prescribed by by-law, that are inputs to the manufacture of information industries equipment, as prescribed by by-law

Before registration of this instrument, there were a number of by-laws made for the purpose of item 65, being By-Laws 0240001, 0240002, 0240003, 0340005, 0340006, 0340007, 0340008, 0340009, and 0440003.  These by-laws prescribed the relevant CTCOs and TCOs for the purposes of item 65.  These by-laws also prescribed “information industries equipment” for the purposes of item 65 as:

(a)   word processing machines of 8469.11.00;

(b)   goods of 8470;

(c)    goods of 8471

(d)   other office machines of 8472.90.90

(e)   electrical apparatus of 8517;

(f)     microphones for telecommunications use of 8518.10.10;

(g)   loudspeakers for telecommunications use of 8518.29.10;

(h)   line telephone headsets of 8518.30.10;

(i)      telephone answering machines of 8520.20.00;

(j)      goods for radio-telephony, radio telegraph and paging alert devices of 8525.10.10;

(k)    apparatus of 8525.20.00;

(l)      digital still image video cameras of 8525.40.10;

(m) portable receivers for calling, alerting or paging of 8527.90.10;

(n)   printed circuits of 8534.00.00;

(o)   electronic integrated circuits and microassemblies of 8542;

(p)   goods of 8544.41.30, 8544.49.30 or 8544.51.10;

(q)   optical fibre cables of 8544.70.00;

(r)     photocopying apparatus of 9009.

In particular, these by-laws meant that goods subject to a prescribed CTCO or TCO that were inputs to the manufacture of prescribed information industries equipment were dutiable at a “Free” rate of customs duty.

As part of the 2005-2006 Federal Budget, the 3% customs duty payable under item 50 of the Schedule 4 to the Tariff Act on business inputs that were the subject of a TCO has been removed, with effect from 11 May 2005.

This change means that there is no longer any need to pursue concessional treatment under item 65, and its associated by-laws, for inputs to the manufacture of prescribed information industries equipment that are also the subject of a CTCO or TCO as such goods are now also dutiable at a rate of “Free” under item 50.  The change to the duty rate under item 50 has, therefore, made Item 65, and its associated by-laws, redundant.  The by-laws have, therefore, been repealed.

Instrument

The instrument repeals by-laws 0240001, 0240002, 0240003, 0340005, 0340006, 0340007, 0340008, 0340009, and 0440003.

Consultation

No consultation was undertaken in relation to the instrument as it is of a minor or machinery nature and does not substantially alter existing arrangements.

Commencement

INSTRUMENT OF REVOCATION NO. 2 (2005) takes effect on 24 June 2005.