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  • Selling duty-unpaid alcohol

    Some alcohol products are being sold, offered for sale, or entered into the Australian domestic market for consumption without the required excise or customs duty being paid. This is what we mean by 'duty-unpaid'. We treat it very seriously as it's illegal, and unfair to businesses who do the right thing.

    Excise duty is a tax that must be paid on beer, spirits and other excisable alcoholic beverages manufactured in Australia before they are sold to consumers. Customs duty must be paid on equivalent imported alcohol products.

    We are focused on each part of the supply chain including:

    • manufacturers
    • wholesale distributors
    • importers
    • retailers.

    On this page:

    Responsibility of manufacturer or producer

    The excisable alcohol manufacturer is generally legally responsible for paying the excise duty on excisable alcohol it manufactures before it's entered into the Australian domestic market for consumption. This is unless they already have an approved periodic settlement permission under their licence or it can be sold underbond pursuant to a movement permission from the ATO.

    If you manufacture excisable alcohol without a manufacturer licence, you will still have an excise liability for the alcohol you manufacture.

    Responsibility of distributor or retailer

    Alcohol distributors and retailers need to understand that if they purchase duty-unpaid alcohol products and then sell them (or offer them for sale), they are also committing an offence under the Excise Act where penalties and other consequences may apply. This is regardless of whether the distributor or retailer knew that duty had not been paid on the alcohol.

    If we find that the distributor or retailer knowingly or recklessly purchased the duty-unpaid alcohol for resale, more serious penalties and consequences may apply, including criminal convictions and imprisonment.

    Similar penalties apply to the sale of imported alcohol on which excise equivalent customs duty should have been paid.

    See also:

    What to look out for

    We recommend that distributors and retailers be alert to situations that may indicate a supplier is involved in the supply of duty-unpaid alcohol:

    • Check the product price and labelling  
      • Make sure the price is realistic (it might be cheap because excise duty hasn't been paid). Refer to example one, example two and example three.
      • Be careful when offered 'bonus stock' that substantially reduces the price of the total supply.
      • Check if the price looks odd when compared to similar product from other suppliers.
      • Watch out for incorrect or odd product labelling, including country of origin, supplier details, lot identification, barcode, tampered lot codes.
       
    • Check the invoice details  
      • Ensure the amount of product matches what was delivered.
      • Be alert to missing, vague or incorrect product descriptions.
       
    • Check the supplier's details  
      • Confirm if they hold an ATO-issued manufacturer or storage licence.
      • Be careful of requests to hold or store product without purchasing it.
      • Verify the bona fides of new suppliers.
      • Check if they are registered on the Australian Business RegisterExternal Link.
       
    • Check your internal controls  
      • Monitor your stock.
      • Understand how much excise duty is payable on different alcohol products by checking the excise rates on alcohol on our website.
      • Verify the bona fides of new suppliers.
       

    If you purchase directly from an alcohol manufacturer, you can contact us for certain information about the excise licences and permissions of those suppliers.

    What to do if you have been sold duty-unpaid alcohol products

    If you are concerned you may have purchased, or otherwise have in your possession, alcohol on which the correct duty hasn't been paid, we can help you rectify the problem and encourage you to:

    You may also want to seek independent professional advice.

    Find out about:

    See also:

    Last modified: 06 Apr 2021QC 63184