EMI (Australia) Ltd v Commissioner of Taxation (Cth)

High Court of Australia Windeyer, J. EMI (Australia) Ltd v Commissioner of Taxation (Cth)

ORDER Conclusion For the reasons that I have given the Commissioner was I consider correct in taking the amount of royalties into account as part of the sale value of goods. The appeal from the decision of the Board of Review is dismissed. The taxpayer must pay the Commissioner's costs of the appeal. I make the usual order as to exhibits.

Cur. adv. vult.

Windeyer, J

This is an appeal against an assessment of sales tax by the Commissioner of Taxation under the Sales Tax Assessment Act (No. 1) 1930-1962 (which I shall refer to as the Assessment Act). Sales were made by EMI (Australia) Ltd (which I shall call the taxpayer) of gramophone records of songs. The sales that are the subject of the present proceedings were, for taxation purposes, attributable to the month of June 1966. The case has been brought to the Court pursuant to s 42(6) of the Assessment Act, as an appeal from a decision of the Board of Review involving a question of law.

The transactions in question occurred between the taxpayer and a company called World Record Club Pty Ltd (which I shall call World Record Club), a locally incorporated company. The process of producing records from an original matrix is called in the trade "pressing records". World Record Club from time to time employed the taxpayer to press large numbers of particular records for it. It distributed these by way of retail sale to customers whom it had enrolled and whom it called its members. The taxpayer's dealings were sales of goods by wholesale by it, the manufacturer, to World Record Club: see Pacific Film Laboratories Pty Ltd v Commissioner of Taxation (1970), 1 ATR 771; 44 ALJR 376. They thus rendered the taxpayer liable to pay sales tax pursuant to s 17 of the Assessment Act upon the "sale value" of the goods so manufactured and sold. By s 18 the "sale value" was "the amount for which those goods are sold".