Opinion Number. 1526


customs: variation by parties of price of imported goods where customs duty payable is varied after price has been negotiated: extension of principle to contract relating to goods that include imported component duty on which is likewise varied: whether valid exercise of power of Commonwealth to determine incidence of customs duties

Key Legislation

customs act 1901 152

The Comptroller-General of Customs

The Comptroller-General of Customs has forwarded the following memorandum to me for advice:

Section 152 of the Customs Act 1901–1930 reads as follows:

If after any agreement is made for the sale or delivery of goods duty paid any alteration takes place in the duty collected affecting such goods before they are entered for home consumption then in the absence of express written provision to the contrary the agreement shall be altered as follows:

  1. In the event of the alteration being a new or increased duty the seller after payment of the new or increased duty may add the difference caused by the alteration to the agreed price.
  2. In the event of the alteration being the abolition or reduction of duty the purchaser may deduct the difference caused by the alteration from the agreed price.
  3. Any refund or payment of increased duty resulting from the alteration not being finally adopted shall be allowed between the parties as the case may require.

A suggestion has been made that the section should be extended so that these provisions would apply also to contracts in respect of goods made in Australia where the price of such goods is affected by an alteration in the duty on imported material used in their manufacture.

I should be glad to be favoured with advice as to whether it is considered there would be any legal objection to the insertion in the Customs Act of a provision such as indicated which would relate to the price of goods made in Australia.

The validity of section 152 of the Customs Act has been upheld by the High Court on the grounds that a law relating to duties of customs is a law with respect to taxation and that the power of the Commonwealth to legislate with respect to taxation includes a power to determine the incidence of the tax.(1)

The suggested provision would be a law in respect of the sale of articles manufactured in Australia. Such articles are not subject to duties of customs.

In my opinion, therefore, the proposed law would not be held to be a valid exercise of the power of the Commonwealth to determine the incidence of customs duties imposed by it.

[Vol. 26, p. 30]

(1)GG Crespin & Son v Colac Co-operative Farmers Ltd (1916) 21 CLR 205.