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  • What's new for tobacco excise

    In the 2018-19 Budget, the government announced a new measure to combat the illegal tobacco trade in Australia. This has become law, and will take effect from 1 July 2019.

    On this page:

    What’s changing

    There are a number of changes to tobacco excise that you should be aware of.

    Importers

    From 1 July 2019:

    • the ATO and Department of Home AffairsExternal Link (Home Affairs) will cancel
      • all periodic settlement permissions for tobacco products
      • movement permissions that allow for tobacco products to be moved to or from licensed warehouses.
    • you'll:
      • have to pay all duties and taxes to Home Affairs when tobacco products enter Australia
      • only be able to store tobacco products that you have paid duty on in licensed warehouses.

    Warehouse operators

    From 1 July 2019:

    • your tobacco warehouse licence will not be renewed. Your current licence will expire on 30 June 2019
    • you will only be able to store tobacco in your warehouse that has had duty paid on it, unless transitional arrangements apply
    • you may receive a penalty if you store tobacco that hasn't had duty paid on it, and transitional arrangements do not apply.

    Make sure you're ready for the changes

    It's important to prepare for the changes before 1 July 2019.

    We'll be delivering a range of educational activities to help you through this change. In the meantime, here are some tips to help you get it right.

    Keep accurate records of your stock on hand

    To ensure duty is calculated correctly for all warehoused stock at 30 June 2019, we:

    • will be conducting warehouse stocktakes
    • will be requesting regular stock on hand reports and details of underbond movements from you
    • may restrict underbond transfers and place limits on the volume of tobacco stored in warehouses.

    Reduce your liability for underbond stock

    Consider paying duty on your underbond tobacco before 30 June 2019 to reduce your liability, as you must have paid duty on all of your existing underbond stock by this date (unless transitional arrangements apply).

    Make sure your records clearly show what stock is underbond and what stock is duty paid.

    Surrender your tobacco warehouse licence

    If you're not currently storing imported tobacco underbond, you should surrender your tobacco warehouse licence to us.

    You may receive a partial refund of your annual licence fees.

    Simply email tobacco@ato.gov.au or send a message via the Business Portal, and include:

    • entity name and ABN
    • licence number
    • advice that you want to surrender your tobacco storage licence
    • confirmation that you do not have any underbond stock on hand.

    Transitional arrangements

    If you're unable to pay duty for your existing underbond stock by 30 June 2019, you may be eligible to pay the outstanding duties in instalments over 12 months to Home Affairs.

    As part of this arrangement, you must provide a financial security and make the final payment by 30 June 2020.

    Any payable GST will not be included in these instalments. It must be paid up-front, unless you have a GST deferral arrangement.

    See also:

    Last modified: 02 Nov 2018QC 57225