CUSTOMS DUTY: EXCISE DUTY WHETHER STARCH PRODUCED FROM IMPORTED RICE IS SUBJECT TO BOTH IMPORT AND EXCISE DUTIES
CUSTOMS ACT 1901, ss. 78, 89: CUSTOMS REGULATIONS, regs 71, 72 (b)
The Auditor-General has forwarded the following memorandum for advice:
I shall be glad if you will kindly furnish advice on the following matter.
On 8 July 1920, the Acting Comptroller-General of Customs approved of delivery of 569 bags of dressed Burma rice free of duty from Parsons Bond to Parsons Excise Warehouse for converting into starch under Customs supervision, subject to payment of excise duty on clearance for home consumption.
Reference is made to Customs Regulations Nos 71 and 72, and the particular point on which your opinion is sought is whether under the latter regulation-paragraph (b)-import duty should be charged on the rice and, after its manufacture into starch, excise duty in addition; that is, should both import and excise duties be collected. Papers in matter herewith; kindly return in due course. Section 78 of the Customs Act provides that dutiable goods may be warehoused in warehouses licensed by the Minister.
Section 89 provides that, in prescribed cases, warehoused goods in manufacturing warehouses may, in manner prescribed, be utilised for manufacturing purposes and the manufactured article may be delivered for home consumption subject only to the payment of such duty (if any) as may be prescribed.
Manufacture for home consumption is dealt with in Customs Regulations 71 and 72. Starch is one of the articles which may be so manufactured (regulation 71).
Regulation 72 lays down the method by which the duty on the finished article is ascertained.
Paragraph (b) of regulation 72 in my opinion requires the payment of customs duty on the starch as well as excise duty. The amount of the customs duty on the starch is to be the amount of duty upon the rice from which the starch was manufactured if such duty is less than the import duty on the starch so manufactured. If not, the import duty on the starch is to be that which would have been payable had the starch been imported.
The concluding words of paragraph (b) require payment of excise duty if the finished article is an excisable commodity, and this is in my opinion a requirement additional to that provided in the first part of the paragraph.(1)
(1)This opinion was published in Commonwealth of Australia, Parl. Papers 1902-21, Vol. III, p. 1115.