Constitutional law – s 90 – duty of excise

On 18 October 2023, in Vanderstock v State of Victoria [2023] HCA 30, a narrow majority of the High Court declared a tax imposed by Victoria on electrical and hybrid vehicles invalid because it imposes a “duty of excise” within the meaning of that term in s 90 of the Constitution.

Section 90 reserves to the Commonwealth Parliament the exclusive power to impose duties of customs and of excise. The Victorian Zero and Low Emission Vehicle Distance-Based Charge Act 2021 (Vic) required registered operators of Zero and Low Emission Vehicles (ZLEVs) to report their odometer reading annually and pay a per-kilometre charge for the use of ZLEVs on all public roads.

Previous decisions of the High Court established that taxes on the production, manufacture and sale of goods were duties of excise and could not be imposed by State Parliaments.

Vanderstock is significant because it extends the scope of s 90 of the Constitution to taxes on the use or consumption of goods after they reach the hands of a consumer. The majority reopened and overruled a previous High Court decision to reach that conclusion. The majority reasoned that a tax on the use or consumption of goods increases the cost of owning and using those goods for consumers. Such a tax can therefore affect the market in those goods by depressing demand for them, in much the same way as a sales tax.

Justices Gordon, Edelman and Steward each delivered strongly worded dissenting reasons which were critical of the majority’s reasoning. Justices Gordon and Steward noted that if the previous authority were to be overruled, a number of other levies, including duties on the transfer of land which includes goods, motor vehicle duties and vehicle registration charges, commercial passenger vehicle levies, gaming machine levies, “point of consumption” betting taxes and waste disposal levies may also be affected.

It follows that, although as the majority remarked that this was the “first time this century” that the High Court had considered s 90, it may well not be the last.


Sarah Spottiswood and Michael Maynard are barristers at Level Twenty Seven Chambers in Brisbane. They acted as junior counsel in this case.

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