The Minister for Trade and Customs :

It appears that under section 127 of the Customs Act 1901 it has been the practice under the Federal Tariff to levy duty on all dutiable articles consumed by the passengers and crew and all dutiable articles used in any way for the service of the ship-including (subject to Tariff exemption (ba), Div. VI) all fittings, renewals, and material for repairs and upkeep of ships.

Before Federation it was the practice in all the States to exempt from duty all articles required by ships for renovation, refitting, repairs, and renewals.

It is stated that-with the exception of duty on paint-little revenue is obtained from ships' stores other than articles consumed by the passengers and crew; and that the Commonwealth loses more by forcing ships to dock and refit outside the Commonwealth than it gains by the duty.

It is suggested by the Minister for Trade and Customs that if 'ships' stores' could be held to include only those articles which are absolutely consumed within the Commonwealth by the passengers and crew, and for the service of the ship, and not those for the fitting, upkeep, repair and renovation of the ship, the revenue indirectly would benefit; and it is pointed out that the words 'except as prescribed' would enable a concession of this kind to be made.

The Minister for Trade and Customs asks:

Will the Hon. the Attorney-General give me his opinion as to whether clause 127 gives power to differentiate in regard to ships' stores. I have no doubt that some harm is being done in charging duty on paints etc. used by a ship whilst in port waiting for cargo-she can do the work at some other port without paying duty. It has been brought prominently under my notice in connection with the Port of Newcastle where sailing ships remain months awaiting their turn for loading.

The words 'ships' stores' are not defined in the Act, and it is difficult to say precisely what they include. See Attorney-General's opinions of 4 February 1903⁽¹⁾ and of 31 July 1903. ⁽²⁾

The definition suggested by the Minister for Trade and Customs would apparently include such articles as coal in bunkers, lamp oil, etc., but not paint, etc.

There is much to be said for this interpretation of the words 'stores used for the service of the ship'-which would restrict these stores, like those 'used by the passengers and crew', to articles of immediate consumption. At the same time, the words are so general that I cannot advise with confidence that this restricted meaning is intended.

The words 'except as prescribed', however, enable regulations to be made which would remove any doubt upon the subject, by prescribing the class of stores which shall be excepted from the provisions of section 127 of the Customs Act 1901.

[Vol. 4, p. 77]

(1) Opinion No. 125.

(2) Opinion No. 146.