Opinion Number. 77

Subject

EXCISE DUTY
WHETHER THAT PORTION OF DUTY COLLECTED WHICH IS TO BE SUBSEQUENTLY REBATED IS REVENUE OF COMMONWEALTH : ACCOUNTING PROCEDURE

Author
Key Legislation

CONSTITUTION, s. 81 : AUDIT ACT 1901, s. 61 : EXCISE TARIFF 1902 : CUSTOMS TARIFF 1902

Date
Client
The Treasurer

The Treasurer sends the following memo:
Customs Bill(1) provides for collection of duty on imported sugar.
Excise(2) provides for collection of excise at £3 and rebate of £2.
It appears to me that a vote must be put on the estimates for the amount.
The excise is paid by one person-the rebate is paid to someone else.
The amount collected as excise has to be credited to State in which sugar is used. Black and white is all mixed up. How is the amount to be credited to be arrived at?
Is the rebate 'other expenditure'? According to the Customs papers it will amount to a large sum-£ 100,000 or £ 125,000.
Kingston(3) proposed to give rebate certificates and accept then a payment of duty-but duty is not paid till long after the certificate is given. These will be like the Mildura orders-at a discount.
If the order is paid at the Treasury is it a rebate of the duty?
Kindly think this out as it is important to have a ruling.

The provision of the Excise Tariff Bill on the subject of the duty and rebate is as follows:
SUGAR per cwt of manufactured Sugar: 3s until the 1st January, 1907, less, from the 1st July, 1902, a rebate to the grower of sugar cane and beet. The rebate in the case of sugar cane to be 4s per ton on all sugar cane delivered for manufacture, and in the production of which sugar cane white labour only has been employed after 28th February, 1902. The rebate is calculated on cane giving 10 per cent of sugar, and is to be increased or reduced proportionately, according to any variation from this standard. A similar rebate to be allowed in respect of sugar beet-the rebate to be allowed at the rate of £2 per ton on the sugar-giving contents of the beet. All rebates to be allowed at the time of delivery of the cane or beet on the ascertainment in manner prescribed of the sugar-giving contents, and so that it may be prescribed that the average sugar-giving contents of the cane or beet in any particular district shall be taken to be the sugar-giving contents of each lot of cane or beet in such district.

Under these circumstances the amount of duty collected but repayable on account of rebate is not part of the revenue of the Commonwealth-any more than telegraph charges collected by the Commonwealth but payable to cable companies, etc. are part of the revenue of the Commonwealth. See my opinion of 14 January 1902(4), on the subject of such telegraph charges.

  1. I am of opinion that these duties ought to be paid into a Trust Fund account, and then under section 61 of the Audit Act the money can be applied to the purpose of the Fund by paying rebates to the growers and paying the balance into the Consolidated Revenue Fund.
  2. It would seem to be practically impossible to identify the sugar passing into the different States for consumption with the particular cane from which it was produced. The fair course would be to adopt a proportional basis, and for the purposes of the bookkeeping clauses to average on that basis the net excise revenue per cwt of manufactured sugar, after allowing for the rebate, to be credited to the consuming State.
  3. I understand that it is not now proposed to issue rebate certificates good for the payment of duty. The certificates now proposed are to be payable at the nearest Custom House on production and on the prescribed declaration by the producer. If this system is adopted, the rebate will be payable before the duty itself has been paid, and it will be necessary to have money available for this purpose-out of Treasurer's Advance or elsewhere-to be subsequently adjusted out of the fund into which the duty is paid.(5)

[Vol. 2, p. 67]

(1) Enacted as the Customs Tariff 1902.
(2) Enacted as the Excise Tariff 1902.
(3) Charles Cameron Kingston, Minister for Trade and Customs.
(4) Opinion No. 36.
(5) The substance of this opinion was published in Commonwealth of Australia, Pari. Papers 1904, Vol. II, p. 1175.