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§ 381. “Customs and Excise … shall become Exclusive.

The first paragraph of this section provides that on the imposition of uniform duties of customs, the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive. Three questions have to be considered in connection with this grant of power—(1) what are duties of customs? (2) what are duties of excise? (3) what is the meaning of exclusive?

DUTIES OF CUSTOMS.—Customs duties are duties or tolls imposed by law on the importation or exportation of commodities. Such duties have been levied by commercial communities from the earliest periods of recorded history. The Athenians imposed a tax of 20 per cent. on corn and other merchandise imported from abroad. In republican Rome, duties paid on exports and imports constituted an important part of the public revenue. Duties of customs were levied in England long before the conquest. They derived their name from having been customarily charged on certain articles, when carried across the principal bridges and ferries within the kingdom, and on other productions when exported or imported. The articles which were first and principally the subjects of these customs or duties were wool, skin, and leather. Duties of tonnage were duties paid on wine by the tun, and duties of poundage were the ad valorem duties of so much per pound on other commodities. These duties, when granted to the Crown, were called subsidies.

DUTIES OF EXCISE.—The definition of the term excise is not so clear and well established as that of customs. Excise duties were first introduced into England in the year 1643, as part of a new scheme of revenue and taxation devised by Pym and approved by the Long Parliament. These duties consisted of charges on beer, ale, cider, cherry wine and tobacco, to which list were afterwards added paper, soap, candles, malt, hops, and sweets. The only excise duties now surviving in England, similar to those of the original list, are duties on beer, spirits, chicory, imitations and substitutes of chicory and coffee, and chicory mixture. The basic principle of excise duties was that they were taxes on the production and manufacture of articles which could not be taxed through the customs house, and revenue derived from that source is called excise revenue proper. In the course of time licenses were required from the makers of and the dealers in excisable commodities, and these license fees acquired the name of “duties of excise.” The next step was to require persons to take out licenses, who neither produced nor manufactured nor disposed of excisable commodities, and these license fees also became known as “duties of excise.” Thus the list of excise licenses, which at first included only brewers, beer-dealers, beer-retailers, distillers, spirit-dealers, spirit-retailers, tobacco and snuff manufacturers and dealers, wine-dealers, and wine-retailers, was expanded by English usage until it embraced auctioneers, owners of armorial bearings, owners of dogs, owners of game, gun-dealers, persons entitled to carry guns, hawkers, house agents, patent medicine sellers, owners of carriages, pawnbrokers, plate-dealers, refiners of gold and silver, refreshment house keepers, and carriers.

Such was the primary meaning of “excise,” and such the secondary and enlarged use of the term. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury, as spirits, beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles and a corresponding or reduced duty on similar articles produced or manufactured in the country; and this is the sense in which excise duties have been understood in the Australian colonies, and in which the expression was intended to be used in the Constitution of the Commonwealth. It was never intended to take from the States those miscellaneous sources of revenue, improperly designated as “excise licenses” in British legislation. It was considered essential that the two correlative powers over customs and excise, properly so called, should run together and be exclusively vested in the Federal Parliament. It was not contemplated that the


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Federal Parliament, in acquiring the necessary power to provide uniformity of commercial laws, should absorb the absolute and exclusive control of so wide an area of inland taxation as would be covered by licenses similar to those enumerated in the above list, such as auctioneers and pawnbrokers.

MEANING OF “EXCLUSIVE.”—The term “exclusive” does not mean unlimited It means that the power to impose customs and excise is, subject to the Constitution, wholly vested in the Federal Parliament as against the States. It means that the power, being granted to the Federal Parliament, is—from the moment of the imposition of uniform duties—taken once and for all from the States; and that the States can thenceforth not legislate for that purpose in any way whatever, even in the absence of Federal legislation. If, for instance, the Federal Parliament imposed uniform customs duties without making any provision for excise, the States would still be powerless to impose excise duties.

This gift of exclusive power is supplemented by an express provision that all laws of the States imposing duties of customs or excise, or offering bounties, shall, from the moment when the exclusiveness attaches, “cease to have effect;” so that the existing laws of the States, as well as their power to make future laws, will be absolutely superseded. (For further notes on the meaning of “exclusive power,” see § 234, supra.)

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