The High Court on Wed 2.4.2014, dismissed a taxpayer’s appeal from the decision of the Qld Court of Appeal in Thiess v Collector of Customs & Ors [2013] QCA 54 and held that s 167(4) of the Customs Act 1901 operates to bar all actions for the recovery of duty paid to Customs, irrespective of whether a dispute as to the amount or rate of duty payable arises at the time of payment, subject only to 2 statutory exceptions.
The Qld Court of Appeal had held that the taxpayer was not entitled to recover a mistaken payment of import duty and GST from the Collector of Customs on the importation of a yacht.
- The taxpayer imported a yacht in 2004 for “home consumption” within the meaning of the Customs Act.
- Under item 8903 of Sch 3 of the Customs Tariff Act 1995, duty is 5% where the yacht does not exceed 150 gross construction tons, otherwise it is duty-free. The “gross construction tons” of the yacht in question was 160.
- However, upon importation, his customs broker mistakenly entered the “gross construction tons” of the yacht as 108. This meant the taxpayer was liable to pay a total amount of $543,918.91 (consisting of $494,471.74 import duty and $49,447.17 GST) instead of a nil amount.
- The taxpayer paid the amount and was not advised of the mistake until 2006, at which time he sought a refund of the amount from Customs.
- The Collector of Customs broadly argued that s 167(4) of the Customs Act prevented the taxpayer from recovering the amount of customs duty as he did not “make that payment under protest” and “did not commence his action within [6] months after the date of payment”.
The High Court unanimously held that irrespective of whether a dispute has arisen at the time of payment within the meaning of s 167(1) of the Act, s 167(4) operates to bar all actions for the recovery of duty paid to Customs, subject only to either a statutory action for recovery under s 167(2) of the Act, or any action to enforce a right or to compel the exercise of powers under s 163 of the Act. The Court said it followed that because the taxpayer could not recover the amount paid as customs duty, he could not recover the amount paid as GST.
(Thiess v Collector of Customs & Ors [2014] HCA 12, High Court, French CJ, Hayne, Kiefel, Gageler and Keane JJ, 2 April 2014.)
[LTN 63, 2/4/14]