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  • Excise on spirits and other excisable beverages

    Alcohol products are classified as spirits or other excisable beverages if they are not:

    Spirits and other excisable beverages are generally subject to excise duty. You need an excise licence to manufacture them.

    You need to understand your excise obligations if you are in the business of:

    • manufacturing spirits or other excisable beverages
    • storing underbond spirits or other excisable beverages
    • delivering or selling spirits or other excisable beverages.

    We do not grant licences to distil spirits for personal consumption. There needs to be a commercial purpose involved.

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    Excisable spirits

    Spirits are generally alcohol products created through distillation (that is, using a still). Examples include brandy, whisky, rum, vodka and gin.

    Brandy, whisky and rum

    The Excise Act 1901 (the Excise Act) has specific definitions for brandy, whisky and rum. They are spirits that:

    • are distilled using the required feedstock  
      • grape wine for brandy
      • cereal grain for whisky
      • sugar cane products for rum
       
    • possess the taste, aroma and other characteristics generally attributed to brandy, whisky or rum, and
    • are matured in wood for a minimum of two years.

    Blending of spirits

    EXC 2020/1 Excise (Spirit blending exemptions) Determination 2020 (No. 1) contains detailed information about when the blending of spirits is not the manufacture of an excisable product.

    Concessional spirits

    Spirits are excise free when used for concessional purposes or made unfit for human consumption (denatured).

    You don't need a permit to purchase spirit that has been denatured using a formula approved by us. However, you need a permit to purchase spirit that has been denatured using a non-approved formula.

    For more information see Concessional spirits

    Other excisable beverages

    Other excisable beverages (OEBs) are beverages containing more than 1.15% alcohol by volume excluding beer, brandy or wine. OEBs include:

    • liqueurs
    • pre-mixed spirit-based drinks (which are a type of ready-to-drink (RTD) beverage)
    • fermented products that aren't beer or wine (for example, cider that wine equalisation tax doesn't apply to).

    If you mix two or more alcoholic beverages to produce a new alcoholic beverage, the tax treatment will vary depending on both the ingredients and the alcoholic strength of the final product. Generally, if you mix an excisable alcohol beverage with another excisable alcohol beverage, the final beverage is subject to excise duty and requires an excise manufacturer licence.

    However if you mix an excisable alcohol product (including excisable alcoholic beverages) with wine that wine equalisation tax applies to, you should contact us to determine the correct tax treatment.

    Beverages that are not produced by distillation, and do not contain any spirit produced by distillation, can be made without an excise manufacturer licence including where they are made:

    • for non-commercial purposes
    • using non-commercial facilities and equipment.

    These types of beverages typically include fermented products such as home brewed beer, cider and wine.

    Difference in excise duty rates for spirits

    We divide spirits into various classes (or tariff sub-items). Each has its own rate of excise duty per litre of alcohol.

    In practice, the excise duty rates for spirits only differ between:

    • brandy (spirit distilled from grape wine in such a manner that it has the taste, aroma and other characteristics generally attributed to brandy)
    • concessional spirits (including denatured spirit)
    • all other spirits including OEBs.

    When you need our permission to deliver spirits or other excisable beverages

    You need our specific written permission to enter spirits or OEBs (other than concessional spirits) into the Australian domestic market in a container with a capacity of more than two litres.

    You need to submit your request to us in writing and provide:

    • details of the product
    • the container size
    • the intended market (for example, pubs and clubs).

    You can contact us for more information.

    Stills used to distil alcohol

    To use a still of any capacity to distil alcohol, you must have an excise manufacturer licence. Severe penalties apply if you manufacture spirits without one.

    For us to grant you an manufacturer licence we consider your situation, such as:

    • that you intend to distil spirits for a commercial purpose (we do not grant licences to distil spirits for personal consumption)
    • the security of your premises
    • that you will pay the correct amount of excise duty when required.

    Excise duty is generally payable on alcohol you distil, even if you don't have a licence. If eligible, you can claim a refund of 60% of the excise duty you have paid on your distilled products. The maximum you can claim each financial year is $100,000.

    To manufacture or sell alcohol (or both), you may also need to check with state liquor licensing, health agencies, and your local government.

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    Stills used for other purposes

    You can own a still of five litres or less without our permission, but only if you're not using it to distil alcohol.

    For a still over five litres in capacity, if you're not a licensed excise manufacturer you must have permission from us to do any of the following:

    • manufacture the still
    • move or set up the still
    • sell or buy the still
    • import the still
    • have possession, custody or control of the still.

    Penalties apply if you don't have the appropriate permission for a still.

    Find out how to apply for permission to use a still.

    Watch:

    Media: Distil the facts about alcohol
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiub87koiw External Link(Duration: 00:30)

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    Last modified: 25 May 2021QC 63548