Customs (Valuation) Amendment Act 1987

Administered by Attorney-General's Department

Legislation au C2004A03460 Not in force Act

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No. 51 of 1987

An Act to amend the Customs Act 1901 in relation to the valuation of imported goods, and for related purposes

[Assented to 5 June 1987]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title etc.

1. (1) This Act may be cited as the Customs (Valuation) Amendment Act 1987.

(2) The Customs Act 19011 is in this Act referred to as the Principal Act.

Commencement

2. This Act shall come into operation on 1 July 1987.

Application

3. The amendment made by section 9 does not apply in relation to determinations or decisions made before the commencement of this Act.

Interpretation

4. Section 154 of the Principal Act is amended:

(a) by omitting from subsection (1) the definitions of “price” and “relevant transaction” and substituting respectively the following definitions:

“ ‘price’, in relation to goods the subject of a contract of sale, means the aggregate of:

(a) all payments made, or to be made, directly or indirectly, in relation to the goods by, or on behalf of, the purchaser:

(i) to the vendor;

(ii) to an associate of the vendor for the direct or indirect benefit of the vendor; or

(iii) otherwise for the direct or indirect benefit of the vendor;

in accordance with the contract of sale or with any other contract relating to the purchase of the goods; and

(b) all payments made, or to be made, directly or indirectly, by or on behalf of, the purchaser:

(i) to the vendor;

(ii) to an associate of the vendor for the direct or indirect benefit of the vendor; or

(iii) otherwise for the direct or indirect benefit of the vendor;

under any other contract, agreement or arrangement, whether formal or informal, for the doing of anything to increase the value of the goods;

whether the payment is made in money or by letter of credit, negotiable instrument or otherwise, and includes:

(c) the value, as determined by a Collector, of any goods or services supplied, or to be supplied, by, or on behalf of, the purchaser as part of the consideration passing from the purchaser under the contract of sale;

(d) the value, as determined by a Collector, of any goods or services supplied, or to be supplied, directly or indirectly, by, or on behalf of, the purchaser:

(i) to the vendor;

(ii) to an associate of the vendor for the direct or indirect benefit of the vendor; or

(iii) otherwise for the direct or indirect benefit of the vendor;

under any other contract, agreement or arrangement, whether formal or informal, for the doing of anything to increase the value of the goods; and

(e) the value, as determined by a Collector, of any goods or services supplied, or any obligations incurred, in accordance with a requirement of the contract of sale, or of any other contract relating to the purchase of the goods, by, or on behalf of, the purchaser in relation to:

(i) the advertising of the goods; or

(ii) any warranty or guarantee in relation to the goods;

but does not include any duties of Customs, or any other taxes, payable under a law in force in Australia because of the importation or sale of the goods;

‘relevant transaction’, in relation to goods, means:

(a) where there was one, and only one, contract of sale for the importation of the goods into Australia entered into before they became subject to Customs control and it was also for their exportation from a foreign country—that contract;

(b) where there was one, and only one, contract of sale for the importation of the goods into Australia but not for their exportation from a foreign country, being a contract entered into before they became subject to Customs control—that contract; or

(c) where there were 2 or more contracts of sale for the importation of the goods into Australia entered into before they became subject to Customs control— whichever of the contracts was made last;

and includes any other contracts, agreements or arrangements, whether formal or informal, relating to the contract of sale that is the relevant transaction;”;

(b) by inserting in subsection (1) the following definition in its appropriate alphabetical position determined on a letter-by-letter basis:

“ ‘associate’, in relation to a vendor of goods, means:

(a) a person who substantially influences the business operations of the vendor;

(b) a person whose business operations are substantially influenced by the vendor;

(c) a person who substantially influences the business operations of a person whose business operations are substantially influenced by the vendor;

(d) a person whose business operations are substantially influenced by a person who substantially influences the business operations of the vendor; or

(e) a person who is related to the vendor;”;

(d) by omitting from paragraph (2) (b) “, in accordance with generally accepted accounting principles,”;

(e) by omitting subparagraph (2) (b) (i) and substituting the following subparagraph:

“(i) any payment of interest paid or payable under a written contract, agreement or arrangement under which the purchaser is permitted to delay the payment of the price in return for the payment of that interest (whether or not also in return for an increase in the price or for the payment of an additional amount), being a contract, agreement or arrangement entered into between the purchaser and the vendor or another person in relation to the purchase of the goods, where:

(a) the interest is distinguished to the satisfaction of the Collector from the price actually paid or payable for the goods;

(b) if a Collector requires the purchaser to demonstrate to the satisfaction of a Collector that identical or similar goods are actually sold at the last-mentioned price—the purchaser so demonstrates; and

(c) if a Collector requires the purchaser to demonstrate to the satisfaction of a Collector that the rate of the interest does not exceed the rate of interest in similar contracts, agreements or arrangements entered into in the country where, and at the time when, finance under the first-mentioned contract, agreement or arrangement was provided—the purchaser so demonstrates;”; and

(f) by omitting subsection (5).

Circumstances in which customs value of goods cannot be determined

5. Section 158 of the Principal Act is amended:

(a) by omitting from subsection (2) “or (6)” (wherever occurring) and substituting “(6), (9) or (11)”; and

(b) by adding at the end the following subsections:

“(8) Where:

(a) different goods are sold in a relevant transaction or relevant transactions; and

(b) a Collector is of the opinion that the price of some of the goods (in this paragraph called ‘special price goods’) is different from the price that would normally be paid for goods, being goods identical or similar to the special price goods, sold in a transaction similar to the relevant transaction in which the special price goods were sold;

the Collector shall, by notice in writing served, personally or by post, on the owner of the special price goods:

(d) require the owner to satisfy the Collector, within a period specified in the notice (not being a period of less than 28 days), that the differences were not designed to obtain a reduction of, or to avoid, duty.

“(9) On the expiration of the period specified in a notice under subsection (8) in relation to goods, the Collector shall, unless the owner of the goods to whom the notice was given has satisfied the Collector as required by the notice, determine that the transaction value of the goods cannot be determined.

“(10) Where:

(a) goods are sold in a relevant transaction or relevant transactions;

(b) services in relation to the goods are provided by the vendor for the purchaser; and

(c) a Collector is of the opinion that the price of the services is different from the price that would normally be paid for identical or similar services in relation to identical or similar goods sold in a transaction similar to the relevant transaction in which the first-mentioned goods were sold;

the Collector shall, by notice in writing served, personally or by post, on the owner of the goods:

(d) advise the owner of the Collector’s opinion; and

(e) require the owner to satisfy the Collector, within a period specified in the notice (not being a period of less than 28 days), that the differences were not designed to obtain a reduction of, or to avoid duty.

“(11) On the expiration of the period specified in a notice under subsection (10) in relation to goods, the Collector shall, unless the owner of the goods to whom the notice was given has satisfied the Collector as required by the notice, determine that the transaction value of the goods cannot be determined.”.

Transaction value of goods

6. Section 159 of the Principal Act is amended:

(a) by omitting from subsection (3) “, in accordance with generally accepted accounting principles,”;

(b) by omitting from paragraph (3) (a) “his” and substituting “the purchaser’s”;

(c) by inserting in paragraph (3) (a) “where the agent is not the agent of the vendor, or otherwise associated with the vendor except as agent of the purchaser, in relation to the purchase” after “valued” (first occurring);

(d) by inserting in paragraph (3) (b) “but not including costs of containers” after “1982”; and

(e) by omitting from subsections (5), (6) and (7) “, in accordance with generally accepted accounting principles,”.

Deductive unit price of goods

7. Section 161 of the Principal Act is amended by omitting from subsection (7) “, in accordance with generally accepted accounting principles,”.

Computed value of goods

8. Section 161a of the Principal Act is amended by omitting from subsection (3) “, in accordance with generally accepted accounting principles,”.

Review of determinations and other decisions

9. Section 161d of the Principal Act is amended by omitting from subsection (1) “within 12 months”.

NOTE

1. No. 6, 1901, as amended. For previous amendments, see No. 21, 1906; Nos. 9 and 36, 1910; No. 9, 1914; No. 10, 1916; No. 41, 1920; No. 19. 1922; No. 12, 1923; No. 22, 1925; No. 6, 1930; Nos. 7 and 45, 1934; No. 7, 1935; No. 85, 1936; No. 54, 1947; No. 45, 1949; Nos. 56 and 80, 1950; No. 56, 1951; No. 108, 1952; No. 47, 1953; No. 66, 1954; No. 37, 1957; No. 54, 1959; Nos. 42 and 111, 1960; No. 48, 1963; Nos. 29, 82 and 133, 1965; No. 28, 1966; No. 54, 1967; Nos. 14 and 104, 1968; Nos. 12 and 134, 1971; No. 162, 1973; No. 216, 1973 (as amended by No. 20, 1974); Nos. 28 and 120, 1974; Nos. 56, 77 and 107, 1975; Nos. 41, 91 and 174, 1976; No. 154, 1977; Nos. 36 and 183, 1978; Nos. 92, 116, 177 and 180, 1979; Nos. 13, 15 and 110, 1980; Nos. 45, 64, 67, 152 and 157, 1981; Nos. 48, 51, 80, 108, 115 and 137, 1982; No. 81, 1982 (as amended by No. 39, 1983); Nos. 19, 39 and 101, 1983; Nos. 2, 22, 63, 72 and 165, 1984; Nos. 39, 40 and 175, 1985; and No. 34, 1986.

[Minister’s second reading speech made in—

House of Representatives on 29 April 1987

Senate on 29 May 1987]

Overview

The Customs (Valuation) Amendment Act 1987 was enacted to address issues related to the valuation of imported goods under the Customs Act 1901. This legislation was introduced by the Parliament of Australia and was assented to on 5 June 1987. The Act aims to refine the definition of certain terms and the circumstances under which the value of imported goods can be determined, ensuring more accurate assessments for the purposes of duty and taxation. It modifies the Customs Act 1901 by updating the definitions of key terms such as "price" and "relevant transaction" to reflect the true economic value of imported goods, including additional payments and services that contribute to the goods' value. Additionally, the Act introduces provisions that allow a Collector to determine the customs value of goods in specific scenarios where the value may not be immediately apparent, ensuring that duties are not unfairly reduced or avoided. The Customs (Valuation) Amendment Act 1987 provides a more comprehensive framework for the valuation of imported goods, thereby ensuring that the revenue collected from customs duties accurately reflects the true value of imported goods. The Act’s amendments aim to close any gaps that may have existed in the valuation process, thereby maintaining the integrity of the customs system.

Scope and Application

The Customs (Valuation) Amendment Act 1987 applies to imported goods and is intended to amend the valuation process as outlined in the Customs Act 1901. It is specifically designed to address and redefine the scope of the "price" and "relevant transaction" definitions within the principal Act, thereby impacting the valuation methodologies for imported goods. The Act applies to any person or entity involved in the importation of goods into Australia, and it is administered by Collectors who are empowered to determine the customs value of goods. It does not apply retroactively to determinations or decisions made before the Act's commencement on 1 July 1987. The Act also introduces provisions for scenarios where the customs value cannot be determined, such as when goods are sold at a price significantly different from the norm or when services are provided alongside the goods at an atypical price. These provisions require Collectors to notify the goods' owner and provide an opportunity to demonstrate that the unusual prices were not intended to evade duty. The Act extends its application across the Commonwealth of Australia, ensuring a uniform approach to the valuation of imported goods. The Act does not specify exclusions or exemptions but operates within the broader framework of the Customs Act 1901, which may include specific exclusions or exemptions in other sections.

Key Provisions

The Customs (Valuation) Amendment Act 1987 amends the Customs Act 1901 by altering the valuation methodology for imported goods. Section 4 redefines "price" and "relevant transaction" to provide a more comprehensive framework for determining the value of imported goods. The term "price" now includes all payments made in relation to the goods, whether directly or indirectly, and regardless of the form of payment. It also includes the value of goods or services supplied by the purchaser for the benefit of the vendor, as determined by a Collector. The term "relevant transaction" is now defined as the last contract of sale for the importation of goods into Australia, where multiple contracts exist. Additionally, the definition of "associate" is expanded to include persons who substantially influence the business operations of the vendor or are related to the vendor. Section 5 introduces new provisions for determining the customs value of goods. Where goods are sold in a relevant transaction and the price differs from the normal price for similar goods, the Collector must notify the owner and require them to demonstrate that the difference was not intended to reduce duty or avoid duty payment. Failure to satisfy the Collector within the specified period results in the determination that the transaction value cannot be determined. Similar provisions apply to services provided by the vendor for the purchaser. The Customs (Valuation) Amendment Act 1987 imposes several obligations on parties involved in the importation of goods. Importers must ensure that the value of imported goods is accurately determined according to the amended provisions. This includes providing all necessary documentation and information to the Collector to substantiate the value of the goods and any related services. Importers must also respond promptly to any notices from the Collector regarding the valuation of goods, providing the required evidence within the specified timeframe. Failure to comply with these obligations can result in the imposition of penalties and the inability to determine the customs value of the goods, leading to potential delays or additional costs. The Act also outlines penalties and consequences for non-compliance with its provisions. While the Act does not explicitly state the penalties for breaches, non-compliance with valuation requirements can lead to significant financial and administrative consequences. These may include the imposition of additional duties and taxes, fines, or other financial penalties. In severe cases, persistent non-compliance may result in legal action against the importer, including criminal charges for fraud or evasion of duty. The precise penalties would be determined in accordance with the broader provisions of the Customs Act 1901 and any other relevant legislation.

Area of Law: Customs Law
Instrument: Act
Concepts: Commencement Provisions; Definitions & Interpretation; Regulatory Standards

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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