Estee Lauder Pty Ltd v. Commissioner of Taxation for the Commonwealth of Australia [1988] FCA 254

JLDGVINT No. eS4 p33...

CATCHWORDS

Sales Tax - wale value of goods specified by the manufacturer as stock for sale by retail - meaning of "the amount for which the manufacturer could reasonably be expected to purchase identical goods from another manufacturer ... by wholesale" - manufacturer of cosmetics changing from business of wholesaling to department stores to business of retailing through department stores acting as its agents - whether calculation of hypothetical wholesale price at which taxpayer notionally purchases should include: (a) royalties paid by taxpayer to overseas affiliates in respect of industrial property; (b) advertising, promotion and selling expenses of taxpayer's (retail) business - whether taxpayer's previous wholesale selling prices are a guide - when goods are "treated ... as stock for sale by retail" - whether hypothetical wholesale price must include cost of delivery and cost of "picking and packing" goods for sale and goods for use as "testers" - principles of construction of revenue legislation - reliance on the "scheme and purpose" of the Sales Tax legislation and the consistency and fairness of its operation.

Sales Tax Assessment Act (No.1) 1930, s.18.

Estee Lauder Pty Limited v. Commissioner of Taxation for the Commonwealth of Austrailia

Coram: Burchett J Date: 26 May 1988 Place: Sydney

IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G.425 of 1984

GENERAL DIVISION ) On remittal from the High Court of Australia BETWEEN: ESTEE LAUDER PTY LIMITED.

Applicant

AND: COMMISSIONER OF TAXATION FOR THE MMI OF AUSTRALIA Responden t

COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA Cross—Claimant ESTEE LAUDER PTY LIMITED. Cross—Respondent REASONS FOR JUDGMENT

BURCHETT J.

This case concerns the meaning and application of 6.18(2) of the Sales Tax Assessment Act (No.1) 1930, which (omitting two provisos irrelevant to the present case) provides