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 'illicit'. We treat this activity very seriously as it's illegal and unfair to businesses who do the right thing.
Excise duty is a tax that applies to 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 goods.
While a key indicator of illicit alcohol is unrealistically low prices, lower alcohol prices can still exist in the market. For example, there may be some lower priced products in the market following the introduction of the Remission scheme.
We are focused on each part of the supply chain to understand the cause of low-price alcohol in the market. This includes:
- wholesale distributors
The manufacturer of excisable alcohol 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, unless:
- they are entitled to, and have applied, an automatic remission under the Remission scheme
- they pay excise duty after the excisable alcohol is delivered into the Australian domestic market under an approved periodic settlement permission
- it is sold underbond pursuant to a movement permission from us.
If you manufacture excisable alcohol without a manufacturer licence, you will still have an excise liability for the alcohol you manufacture.
Alcohol distributors and retailers need to understand that if they purchase illicit alcohol products and then sell them (or offer them for sale), they are also committing an offence under the Excise Act 1901. Penalties and other consequences may apply, 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 illicit 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 Taxpayer Alert TA 2021/1 Retail sale of illicit alcohol – for our concerns about arrangements where alcohol retailers are knowingly or recklessly purchasing illicit alcohol for the purposes of resale.
We recommend that distributors and retailers be alert to situations that may indicate a supplier is involved in the supply of illicit alcohol:
- Check the product price and labelling
- Make sure the price is realistic.
- 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 or manufacturer 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 duty rates for alcohol on our website.
If you purchase directly from an alcohol manufacturer, you can contact us for certain information about the excise licences and permissions of those suppliers.
You can download or order a visual PDF factsheet for reference – Could you be selling illicit alcohol without realising it?External Link
If you are concerned you may have purchased illicit alcohol, or otherwise have illicit alcohol in your possession, we can help you rectify the problem. We encourage you to:
- contact us for further advice about excisable alcohol
- contact Australian Border ForceExternal Link for further advice about imported alcohol
- make a voluntary disclosure to reduce penalties that may apply.
You may also want to seek independent professional advice.
For more information, see Excise on alcohol.What to do if you've been sold illicit alcohol and your responsibilities for paying excise duty on alcohol you sell.