Remission scheme for alcohol manufacturers

The Remission scheme

From 1 July 2021, the Excise remission scheme for manufacturers of alcoholic beverages (Remission scheme) provides eligible alcohol manufacturers with a full (100%) automatic remission of excise duty on alcoholic beverages they manufacture and enter into the Australian domestic market (for home consumption).

The Remission scheme replaced the Excise refund scheme for alcohol manufacturers (Refund scheme). For more information, refer to Chapter 7 – Remissions, refunds, drawbacks and exemptions of the Excise guidelines for the alcohol industry.

Our 2026–27 compliance focus areas

The Remission scheme was established to support genuine Australian alcohol manufacturers, not businesses that structure their affairs to gain concessions to which they are not entitled.

From July 2026, we have expanded our targeted compliance activities aimed at high-risk arrangements and behaviours that threaten the integrity of the alcohol Remission scheme, including:

• whether a business truly operates independently from other alcohol manufacturers
• contract manufacturing arrangements
• whether products are being genuinely distilled or brewed, rather than created by simply diluting alcohol
• whether a business is meeting the still ownership test.

Commencing September 2026, we'll introduce enhanced assurance activities for businesses seeking to enter the excise system, including:

• targeted pre-licensing reviews to verify manufacturing operations before new alcohol manufacturing licences are granted
• targeted reviews of newly approved licence holders where arrangements involve shared premises, common individuals or key personnel with specialised alcohol manufacturing expertise.

Commencing October 2026, businesses new to the excise system can expect greater scrutiny from us during their first 2 years of operation, including:

• targeted first-year reviews of businesses applying the Remission scheme
• targeting businesses applying the Remission scheme that do not have an operational still installed after the first 2 financial years of eligibility under the Remission scheme or Refund scheme.

Updated guidance will also be developed for new excise participants, including refreshed information about the Remission scheme eligibility requirements.

More information is available in this media release.

How the automatic remission works

A 100% automatic remission applies to eligible products entered for home consumption on or after 1 July 2021.

All products entered for home consumption for the period must be reported on your excise return. This applies whether you apply the remission or not and you:

• have a periodic settlement permission (PSP)
• are on prepayment and applying for a delivery authority.

The maximum amount of remission that can be applied each financial year is:

• $400,000 from 1 July 2026
• $350,000 from 1 July 2021 to 30 June 2026.

The remission is applied to the eligible products in the Product details section of the Excise return.

You must keep records of how much automatic remission you have applied so that you do not exceed the financial year cap. Once you have reached the cap in a financial year, you must pay the required excise duty on all subsequent products entered for home consumption in that financial year.

Who is eligible

To be eligible for this automatic remission you must:

• hold a manufacturer licence authorising you to manufacture alcoholic beverages at the premises covered by your licence
• have manufactured an alcoholic beverage at the premises specified in your licence and entered it into home consumption
• have fermented or distilled at least 70% of the alcohol content by volume of the alcoholic beverage at the premises specified in your licence
• be legally and economically independent of any other entity that has received a remission under the Remission scheme in the financial year (or, in certain circumstances, a refund). If you're not legally and economically independent of any other entity, only one manufacturer in your group is entitled to the remission (or refund) in the financial year.

Situations where an alcohol manufacturer will not be legally and economically independent include:

• it's a subsidiary of another alcohol manufacturer
• another alcohol manufacturer subsidises its operations
• where one or two individuals or companies control or have majority shareholding in multiple excise licence holders.

When a business restructure occurs part way through a financial year, for example from a sole trader to a company, the two entities may not be legally and economically independent/businesses-and-organisations/gst-excise-and-indirect-taxes/contact-us-about-excise.

For distilled alcoholic beverages, you must also meet the still ownership test after your first 2 financial years of eligibility under the Remission scheme or the Refund scheme, by owning one or more stills that meet all the following:

• have a capacity of at least 5 litres
• were installed ready to use at the beginning of the financial year
• were used to manufacture an alcoholic beverage during the financial year.

Note: A still that you install ready to use at the beginning of the financial year doesn't have to be the same still that you use to manufacture an alcoholic beverage during the financial year.

The still ownership test must effectively apply for the entire financial year in which the products are entered for home consumption. If the remission is applied part way through a financial year, the test applies between the start of the financial year and the day on which the products were entered for home consumption. There must also be a reasonable expectation that the test will be satisfied for the rest of the financial year.

If you did not own a still when you applied for a licence, you must notify us using secure mail when you purchase one.

Provide details of the still including:

• make
• serial number
• type: pot, continuous, spinning cone, other – specify
• capacity in litres
• manufacturer/retailer's name and address.

We may undertake targeted reviews of businesses applying the remission under the Remission scheme to assess compliance with the eligibility requirements, including legal and economic independence and still ownership.

You must keep sufficient records to substantiate your entitlement to the remission and provide these records on request.

Pro-rata cap for a partial financial year

If your manufacturer licence is issued part way through the financial year, you need to calculate a pro-rata cap by multiplying the maximum amount – $400,000 from 1 July 2026 – by the number of days in the period then dividing the result by 365 days.

The period starts from the date your manufacturer licence commences and ceases at the end of that financial year.

For example, if your licence commenced on 30 October 2026, the amount of remission you could apply is ($400,000 x 244 (days from 30 October 2026 to 30 June 2027)) ÷ 365 = $267,397.

Exclusions

The scheme excludes:

• excisable goods entered for home consumption on or before 30 June 2021
• products to which wine equalisation tax applies
• products you manufacture then move to a licensed bottling or canning facility that modifies your product by adding water or additional flavours
• ready-to-drink (RTD) mixed spirits, where another manufacturer produces the spirit and you then blend that manufacturer's spirit with a non-alcoholic beverage to create an RTD product
• products manufactured by another licensed manufacturer under contract at their premises
• storage only licence holders.

Duty paid incorrectly on goods entered on or after 1 July 2021

If you incorrectly paid excise duty on goods entered for home consumption on or after 1 July 2021, where you were entitled to apply the remission but didn’t, you may apply for an excise refund.

Any amount of refund claimed in this situation will count towards your $400,000 cap for the financial year. The cap was $350,000 before 1 July 2026.

More information

If you need more information about:

• the Remission scheme and the eligibility criteria, see Chapter 7 of the Excise Guidelines for the Alcohol Industry
• the term 'legally and economically independent', see Excise Ruling ER 2023/1 – Excise: the meaning of 'legally and economically independent'.
• Lodging and paying – excisable alcohol

If you can't find an answer to your question, contact us.