Opinion Number. 92

Subject

EXCISE DUTY
WHETHER LEGALLY PAYABLE ON INTERSTATE TRANSFER WHEN GOODS FREE OR DUTY-PAID IN A STATE : CIRCUMSTANCES IN WHICH REFUNDS MAY BE MADE

Author
Key Legislation

CONSTITUTION, s. 92 : EXCISE ACT 1901, s. 154 : EXCISE TARIFF 1902, s. 5

Date
Client
The Minister for Trade and Customs

The Minister for Trade and Customs asks:

Are refunds properly payable on account of sugar which on the 8 October was duty-paid or naturally free in a State and not in the possession or control etc. of a manufacturer brewer etc, but in respect of which duty was collected on interstate transfer?

Section 92 of the Constitution declares that on the imposition of uniform duties of customs, trade, commerce, and intercourse among the States shall be absolutely free.

For the purpose of the collection of duties the imposition of uniform duties is deemed to have taken place on 8 October 1901.

Since that date Australian goods which are free in one State are free in all States (except Western Australia) and no duty can be legally collected on such goods.

There is no provision in the Excise Act for the refund of duty paid; but section 154 provides that where a dispute arises as to the liability of goods to duty the owner may deposit the amount of duty demanded, and if, by action commenced by the owner within six months, it is determined that the duty was not payable, the deposit shall be refunded with 5 per cent interest.

It was open to any person from whom excise duty was demanded on interstate transfer to take advantage of that provision.

My opinion on the question submitted is:

  1. That excise duty is not legally payable on interstate transfer of sugar which on 8 October 1901 was duty-paid or naturally free in a State, and not in the possession or control etc. of a manufacturer, brewer etc. (see Excise Tariff, section 5).
  2. That if the duty is paid without dispute the payment is voluntary and the person paying it is not legally entitled to recover. Where however the duty was improperly demanded, the Commonwealth ought to repay it; but a refund will require an appropriation by Parliament.
  3. That if the amount of duty was deposited under section 154, a refund may be made without action if it is admitted that duty was not payable.

[Vol. 2, p. 239]