The Minister for Trade and Customs:

The Minister for Trade and Customs forwards the following minute (dated 16 February 1903):

Forwarded to the Hon. the Attorney-General. I should like Mr Deakin's opinion as to the assessment of goods for ad valorem duties on the following points:

1. Should the values be taken on sales by manufacturers or producers or how?
2. Should the values be taken on ordinary wholesale sales or varying according to greater or lesser quantities or how?
3. Should the value be taken on sales for cash reducing such cash prices to a cash basis or how?

I am thinking of issuing some general directions on these and other matters and it would therefore be an assistance to have Mr Deakin's full opinion on sections 154, 155 and 156 of the Customs Act 1901.

My answers to the above questions are as follows:

1. The value is to be taken on sales in the open market in the principal markets of the country of export. It is the price for which any person can go into the market and obtain the goods wholesale. Whether that is the price at which the manufacturer or producer sells is a question depending upon facts in relation to the course of trade.
2. Generally speaking, the value should be taken on ordinary wholesale sales. But where there is a recognised reduction for a specially large quantity-a reduction which any person purchasing that quantity can obtain-it can hardly be denied that the reduced price represents the market value of the goods in that quantity. It is doubtless very desirable for Customs purposes that on a specified line of goods the ad valorem duty should as far as possible be a fixed rate; but where market value is the basis of duty this is not altogether attainable; and in the absence of statutory definition to the contrary it seems that in cases where quantity has a real effect on the market price, it cannot be ignored in ascertaining market value.
3. Market value is cash value; and a bona fide discount for prompt cash in lieu of credit, whether actually taken advantage of or not, is properly allowable in assessing value for duty. See my opinion of 14 November 1902⁽¹⁾ But the 'Genuine Invoice' must show the 'actual money price paid or to be paid ... by the purchaser . . . without any deduction'; and must therefore, where credit is taken in lieu of discount, disclose the full price and the true terms of credit and discount.

[Vol. 3, p. 169]

(1) Opinion No. 108.