The Alcohol Industry - Excise Technical Guidelines (current to 30 June 2006)

Chapter 9 - Concessional Spirit

This document has been archived. It is current only to 30 June 2006.

Section 1 Introduction

1.1 Acronyms used in this chapter

ACS Australian Customs Service

AGAL
Australian Government Analytical Laboratories

AIG
Alcohol Industry Group

CEO
Chief Executive Officer (the Commissioner of Taxation)

ETI
Excise tariff Item

IMS
Industrial methylated spirits

N.E.I
Not elsewhere included

RTD
Ready-to-drink beverage

SMS
Specially methylated spirits

TGA
Therapeutic Goods Administration

WET
Wine equalisation tax

1.2 Appendices at the end of this chapter

Appendix: 9.1 Undenatured spirits - Approved uses of ETI 2M

Appendix: 9.2
Index of approved purposes for 2M concessional spirit

Appendix: 9.3
Undenatured spirits - approved uses of ETI 2J

Appendix: 9.4
Schedule of approved formulae for specially methylated spirits

Appendix: 9.5
Example of fortifier records - account of fortifying spirit

Appendix: 9.6
Example of fortifier records - fortifying spirit register

Appendix: 9.7
Terms of agreement to govern the manufacture and distribution of spirit-based food essences and flavourings free from excise duty

Appendix: 9.8
Form 21 (regulation 148)

Appendix: 9.9
Exemptions from the concessional spirits permit process.

1.3 Foreword

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Section 2 Overview

2.1 Preliminary

Alcohol, that is ethyl alcohol or ethanol manufactured and used in Australia, other than alcohol subject to wine equalisation tax (WET), is generally subject to high rates of excise duty. However there are three specific categories of spirit which may be purchased at a free concessional rate of duty. The alcohol in two of these three categories is denatured by making it unfit for human consumption by the addition of denaturants (methylating substances). The other is for manufacture of products for human consumption and to which no denaturants are added.

The three categories are:

  • fully denatured spirit
    • known as industrial methylated spirit (IMS) and is of the type available from hardware stores and supermarkets. This spirit is unfit for human consumption due to the addition of denaturants as specified in sub-regulation 17(1) of the Spirits Regulations
  • partially denatured spirit
    • known as specially methylated spirit (SMS). This spirit is made to meet specific end use requirements. It is unfit for human consumption due to the addition of denaturants as specified by the Tax Office under regulation 19 of the Spirits Regulations
  • undenatured spirit
    • spirit which is potable (drinkable) and is supplied for approved purposes. For example for the manufacture of foodstuffs, internal medicines or for the fortification of non-grape wine.

An excise permit is required for the use of undenatured spirit and specially methylated spirit. No permit is required for the use of industrial methylated spirit.

The Alcohol Industry Group (AIG) is responsible for the administration of the concessional spirit scheme and for issuing permits.

The AIG will issue a permit only when the application to take delivery of spirit for approved purposes is complete and all requirements have been met.

Sub-section 6 (2) of the Distillation Act, sub-section 3 (2) of the Spirits Act and The Schedule to the Excise Tariff Act all require that the volume of alcohol in spirits is to be taken as the volume measured at 20 ° C. Accordingly, prior to packaging or delivering bulk concessional spirits, distillers are required to correct and record spirit volumes to 20 ° C. Resellers are required to correct and record bulk volumes to 20 ° C prior to repackaging or delivery.

2.2 Use of imported spirits

In compliance with Item 7 of Schedule 2 of the Excise regulations, imported spirit containing not less than 84% a/v may be used in the manufacture of other spirits subject to the following conditions:

  • the manufacturer must hold a customs warehouse licence and either a spirit makers licence issued under the Distillation Act (see Chapter 2) or a licence to make methylated spirits issued under the Spirits Act
  • the Tax Office has given approval for the manufacturer to blend spirits at the warehouse, distillery or methylator's premises to which the relevant licence refers
  • the imported spirits must be blended with spirits distilled in Australia and containing not less than 84% a/v, and
  • the spirits manufactured from the imported spirits are intended for use for industrial, manufacturing, scientific, educational or medical purposes.

Section 3 Legislative References

Excise Tariff Act 1921

The Schedule

The volume of alcohol contained in goods 'is taken to be the volume that would be the volume of that alcohol if the alcohol were measured at a temperature of 20 ° C.

Item 2J

Spirit for fortifying Australian wine or for fortifying Australian grape must subject to regulations

Item 2M

Spirit for industrial or scientific purposes, n.e.i., subject to regulations

Item 2N

Methylated spirits subject to regulations

Item 2P

Spirit for scientific or educational purposes subject to regulations-

Item 2P1

For use in universities

Item 2P2

For use in approved technical colleges or other educational institutions prescribed by by-law

Item 2Q

Spirit for use in public hospitals or for use in the manufacture of medicinal preparations for use in public hospitals and universities, subject to regulations

Item 11K

Denatured ethanol for use as fuel in an internal combustion engine (subject to excise duty with an equal amount of production subsidy. Payable to the local ethanol producer).

Concessional spirit is often referred to by the relevant Excise Tariff Item (ETI) under which the spirit is classified. For example 2M spirit (undenatured), 2N spirit (denatured) and 2J spirit (undenatured grape/marc spirit used for fortifying grape wine 1 ).

Permits for undenatured spirit are issued for spirit classified to ETI 2J or ETI 2M. Permits are no longer issued for ETI 2P, 2P1, 2P2 or 2Q - see sections 6 and section 7 of this chapter.

Permits for denatured spirit (including SMS) are issued for spirit classified to ETI 2N.

Spirits Act 1906

Sections 14-26

methylation of spirit

  

Spirits Regulations 1926

 

Regulations 10 - 17

methylated spirits

Regulations 19 - 30F

methylated spirits for special manufacture or special purpose

Regulations 31 - 37

methylated spirits for scientific investigation

Regulations 39 - 64

methylated spirits generally

 

Excise Regulations 1925

Regulation 83

method of taking samples

Regulations 83A - 92

use of fortifying spirit (2J) + Excise by-law No.98

Regulations 96 - 116

use of 2M spirit (vinegar manufacture)

Regulations 117-125G

use of 2Q spirit (for use in public hospitals and for the manufacture of medicinal preparations)

Regulations 142-151

use of 2M spirit (other industrial or scientific purposes)

Regulations 152-160A

use of 2P spirit (scientific or educational purposes)*

 

* Excise by-law number 47

 

Distillation Act 1901

Section 9

parts IV and V apply to spirit makers only

Section 37

distiller may methylate spirits

Sections 57A - 59

fortification of Australian wines (2J)

Section 4 Excise Tariff Item 2m - Spirit for Industrial or Scientific Purposes, Subject to Regulations

4.1 Overview

The Excise Regulations 2 provide that the Tax Office may give approval for the delivery of spirit for industrial or manufacturing purposes approved by the Tax Office.

The Excise Regulations 3 require that all spirit delivered under regulation 142 must remain subject to Tax Office control until used for an approved purpose. In order to account for the use of such concessional spirit the end user is required to record full details of the quantity of spirit received, corrected to 20 ° C 4 . Details of the quantity of spirit in litres and the actual (or true) strength, that is corrected to the standard 20 ° C 5 , should be shown by the distiller or reseller on delivery documents.

The Excise Regulations 6 require that spirits for industrial or scientific purposes or educational institutions must contain at least 94% by volume of alcohol, unless the Tax Office approves otherwise.

ETI 2M reads 'spirit for industrial or scientific purposes, n.e.i. 7 , subject to regulations'.

Purposes approved by the Tax Office are listed at Appendix: 9.1.

Spirit cleared under ETI 2M is undenatured spirit. It may be distilled from a number of raw materials including grapes (grape spirit is often referred to as SVR), sugar cane (cane spirit) or grain (grain spirit). ETI 2M spirit is generally very high strength immature spirit. It is usually supplied at a strength of approximately 96% a/v. Spirit distilled from the various raw materials will have their own specific characteristics but will generally be of a fairly neutral nature.

ETI 2M spirit does not have any denaturants or methylating substances added to it.

Mature spirit may be cleared under ETI 2M as long as it is used for an approved purpose such as the manufacture of foodstuffs. Mature spirit means whisky, rum or brandy which has been aged in wood for at least two years. Such spirit has to be excisable to be delivered duty free under ETI 2M as the Excise Tariff Act applies only to goods manufactured in Australia 8 .

Further details of approved end-uses of ETI 2M are set out in Appendix: 9.1.

4.2 Policy for the granting of a permit for access to undenatured spirit where the spirit is to be consumed

With the exception of the approved use of undenatured spirit for the fortification of non-grape wine, the policy for the granting of a permit for access to spirit classified to ETI 2M is intended to ensure that such spirit is not used for the manufacture of alcoholic beverages or non-beverage products for which the purpose of the product is to be a source of alcohol for consumption as such (that is as an alcoholic product), irrespective of the description or labelling of the product.

The use of ETI 2M spirit for the manufacture of non-beverage products (such as foodstuffs) that are not intended as a source of alcohol for consumption, may be approved.

4.2.1 Application of policy - uses other than essences

Where spirit is to be used for the manufacture of vinegar, internal medicines and mouthwashes, or for other approved scientific or industrial purposes, (that is the purpose of the product is not to be a source of alcohol for consumption), approval may be granted subject to conditions including limits on quantity, determined by the Tax Office.

4.2.2 Application of policy - essences, flavours and other like products

Where 2M spirit is to be used for the manufacture of essences, flavours or other like products that are to be ultimately consumed, eligibility for access to 2M spirit will be assessed at the time of application. Access to 2M spirit will not be made available where the purpose of the product is to be a source of alcohol for consumption as such, irrespective of the description or labelling of the product.

Approval may be granted where it can be clearly demonstrated that the essence is for culinary purposes (for example in baking or as an additive to solid foods including liqueur chocolates where the purpose of the alcohol is not for consumption) or for use in small proportions to flavour non-alcoholic or non-excisable alcoholic beverages (for example soft drinks, cordials or where elsewhere allowable under the Excise Tariff Act). When applying for approval the applicant will need to demonstrate that the essence/flavouring will not be used as a direct substitute for the original spirit and that it is a concentrated flavour.

Approval may also be granted in circumstances where the essence will contribute to the alcohol content of a beverage, where the alcohol content contributed by the essence will be subject to excise liability as part of the total alcohol content of the product. In these circumstances the manufacturer of the product must be the holder of an excise manufacturer licence 9 .

Essences may also be used in the manufacture of products subject to wine equalisation tax (WET) legislation as long as the provisions of the WET legislation are met.

The overriding principle is where the product is sold or marketed as a source of alcohol for consumption, then approval for a permit for access to 2M spirit will not be granted.

For products described as essences, flavourings or other like products, where any of the considerations listed below apply, then the use of the product will not qualify as an approved purpose and access to concessional spirit will not be granted.

Considerations include where the product is:

  • marketed in packaging that resembles packaging for an alcoholic beverage
  • packaged in six packs or similar multiple packaging types
  • required by state legislation to be sold through licensed liquor outlets or is subject to state liquor licensing laws
  • marketed with instructions regarding how it can be converted to an alcoholic beverage
  • packaged for retail sale (irrespective of who in the marketing chain does the packaging) in sizes greater than 50ml (or 100 ml for vanilla essence), or
  • sold in package sizes greater than 50ml with no demonstrated culinary use.

The National Director, AIG has the delegation under regulation 142 of the Excise Regulations for approving permits for access to 2M spirit where the stated purpose is the manufacture of essences, flavours and like products.

Where approval is given to use 2M spirit for the manufacture of essences, the Tax Office will give due consideration to the taking of a security. An agreement covering the manufacture and distribution of spirit-based food essences and flavourings is required (Appendix: 9.6).

4.3 Excise Regulations specific to clearances under ETI 2M

Regulations 142 to 160A of the Excise Regulations deal with spirits used for industrial or scientific purposes or educational institutions.

Regulation 148 of the Excise Regulations provides that if a person receives spirit in pursuance of regulation 142, in quantities exceeding 25 litres per month, they must maintain records in accordance with form 21 (Appendix: 9.7) of the receipt and disposal of the spirit. Regulation 148 does not exempt a person from keeping records if they receive quantities that do not exceed 25 litres per month.

Universities, technical colleges and other educational institutions are required to keep records in accordance with regulation 158, and not under regulation 148 10 . Regulation 158 does not require a form 21.

section 5 Excise Tariff Item 2n - Methylated Spirits, Subject to Regulations

5.1 Overview

Methylated spirits are spirits to which a denaturant or methylating substance has been added to make them unpalatable. The methylating substance is usually highly volatile, which makes separation from the ethyl alcohol difficult.

Spirits methylated to an approved formula are cleared under ETI 2N.

5.2 Methylated versus denatured

The terms methylated spirits and denatured spirits are not interchangeable.

The Spirits Act and Spirits Regulations contain provisions for the control of methylated spirits.

The word denatured does not appear in the Spirits Act or Regulations or in other Excise legislation. Although the word denatured appears in the Customs Act it is not separately defined for the purposes of the Customs Act. The term denatured therefore takes on its natural or ordinary meaning. The Macquarie Dictionary 11 defines denature to mean:

to render alcohol unfit for drinking or eating by adding a poisonous substance without altering the usefulness for other purposes.

The Customs Tariff Act has a separate classification and concessional rate of import duty (5% ad valorem) for denatured alcohol. There is no reference to methylated alcohol in the Customs Tariff Act.

Methylated spirits, methylating substance and methylated are defined in section 3 of the Spirits Act as follows.

Methylated Spirits means any spirits, whether imported or made in Australia, which have been methylated either before or after the commencement of this Act, and whether the methylating substance or any fractional part or ingredient thereof has afterwards been removed from the spirit or not, and includes all spirit, whether imported or made in Australia, which has been entered for home consumption as methylated spirit.

Methylating substance means any substance required by any regulation to be mixed with spirits in order to make methylated spirits, and includes any fractional part or ingredient of any such substance, and particularly any such fractional part or ingredient as may serve to aid detection by means of chemical analysis of the presence in any article of food or drink or any medicines of a methylating substance.

Methylated means mixed with any prescribed methylating substance in the prescribed quantity, and in the prescribed manner.

The Spirits Regulations 12 set out the standards for methylated spirits and list the types and proportions of the ingredients that must be contained in industrial and mineralised spirits.

The Spirits Regulations 13 prescribe that a person may methylate spirits for special manufacture or special purpose if the spirits contain at least 94% by volume of alcohol (or a lower percentage if approved by the Tax Office), and the methylation is done by adding methyl alcohol or any other substance as directed by the Tax Office.

In order for methylated spirits to be classified as industrial or mineralised spirits, they must meet the standards prescribed in sub regulations 17(1) and 17(2) of the Spirits Regulations.

The Spirits Act 14 provides that spirits for special manufacture or for any special purpose must be methylated as prescribed and only used under Tax Office control and in accordance with the regulations. Subsection 14(5) provides that methylated spirits for use in scientific investigation are also required to be dealt with as prescribed.

However the above standards/requirements do not apply in respect of denatured spirits that are not methylated spirits (both are classified to ETI 2N). Section 14 of the Spirits Act provides that there shall be four classes of methylated spirits and that each can be used for specified purposes. However it does not limit use for specified purposes only to methylated spirits. For example, a denatured spirit, other than methylated spirits, could be used for lighting, heating and power purposes.

Methylated spirits are a sub-set of denatured spirits. Imported denatured spirits do not need to fit the standards for methylated spirits prescribed in Regulation 17 of the Spirits Regulations. Imported denatured or methylated spirits are not subject to the concessional spirit permit regime because the Excise Act does not apply. This creates a situation where the locally produced product is subject to the Spirits Act but an identical imported product is not.

5.3 Methylated spirits

Section 14 of the Spirits Act states:

  1. Spirits distilled in Australia and imported spirits may be methylated in accordance with this Act and the regulations.
  2. There shall be four classes of methylated spirits as follows:
    1. Industrial spirits for use in the arts and manufactures (other than the manufacture of articles of food or drink, essences, tinctures, or medicines);
    2. Mineralized spirits for lighting, heating and power purposes;
    3. Spirits for special manufactures or special purposes;
    4. Spirits to be used for purposes of scientific investigation in connexion with Universities or Public Institutions.
  3. Spirits for any special manufacture or for any special purpose shall be methylated as prescribed and shall only be used under the CEO's control and in accordance with the regulations.
  4. Spirits for use in scientific investigation shall be treated and dealt with in manner prescribed.
  5. No methylated spirits shall be used in the manufacture or preparation of any articles of food or drink, or of any essences, tinctures, or medicines.

Both industrial and mineralised methylated spirits are fully denatured spirits. They are no longer subject to excise control once the methylating substances have been added as prescribed and the product is cleared by the manufacturer for home consumption under ETI 2N.

5.3.1 Industrial methylated spirits (IMS)

The Spirits Regulations 15 provide that the standard for the class of methylated spirits called industrial spirits is that, before methylation, the spirit is to contain not less than 94% by volume of alcohol and is to be methylated by the addition of:

  • 0.25 per centum of wood naphtha or methyl alcohol, 0.5 per centum of pyridine and 0.5 per centum of any one of the following substances, namely, petrol, gasoline, petroleum benzine, petroleum naphtha, coal tar naphtha or shale naphtha, or
  • 0.25 per centum of wood naphtha or methyl alcohol, 0.125 per centum of pyridine and 1 per centum of any one of the following substances, namely petrol, gasoline, petroleum benzine, petroleum naphtha, coal tar naphtha or shale naphtha, or
  • 6.6 parts per million by weight of bitrex, 0.25 per centum by weight of methyl-isobutyl-ketone and 1 part per million by weight of fluorescein.

Once methylated in accordance with the regulation and entered into home consumption under ETI 2N, IMS are no longer subject to excise control. A concessional spirits permit is not required to use IMS.

IMS are used in the manufacture of solvents, extractants, antifreezes and as intermediates in the synthesis of innumerable organic chemicals, or in the arts. They must not be used in the manufacture of food or drink, essences, tinctures or medicines. A tincture is an alcoholic solution of some principle (usually vegetable) used in medicine.

5.3.2 Mineralised methylated spirits

The Spirits Regulations 16 specify that the standard for the class of methylated spirits called mineralised spirits is that before methylation, the spirit is to contain not less than 94% by volume of alcohol and is to be methylated by the addition of:

  • 0.25% of wood naphtha or methyl alcohol, 0.05% of pyridine and not less than 2% of any one of the following substances, namely, petrol, gasoline, petroleum benzine, petroleum naphtha, coal tar naphtha, shale naphtha, benzol or a like substance, or
  • 6.6 parts per million by weight of bitrex, 0.25% by weight of methyl-isobutyl-ketone and 1 part per million by weight of fluorescein.

Once methylated in accordance with the regulation and entered into home consumption under ETI 2N, mineralised methylated spirits are no longer subject to excise control. That is, they are not subject to the concessional spirits permit regime and a permit is not required.

Mineralised spirits are used for purposes such as lighting, heating, or power.

5.3.3 Special manufacture or special purpose methylated spirits

Methylated spirits classified as being for special manufacture or special purpose are spirits which fall under ETI 2N, and are referred to as specially methylated spirits (SMS) or partially denatured spirits.

This category of spirits is governed by the Spirits Regulations and is subject to the concessional spirits permit regime.

The Spirits Regulations 17 specify that spirits which are to be methylated for special purposes must contain at least 94% by volume of alcohol or a lower percentage if approved by the Tax Office, and it is done by adding methylating substances in proportion and as directed by the Tax Office.

The minimum strength of 94% a/v is required prior to methylation.

It is common commercial practice for resellers and end users to later add water to the methylated spirits to arrive at an optimal strength for the intended application. For example, SMS Formula 3 is often reduced to 70% a/v for use as a sterilising agent in hospitals.

Appendix: 9.3 shows the schedule of approved formulas for SMS for any manufacture or purpose in which the use of IMS would be unsuitable or detrimental. This schedule provides details of the approved uses for SMS.

All applications to vary the proportion of methylating substances, or vary the pre-methylation strength to less than 94% by volume of alcohol, should be directed to the National Director, AIG with details as to whether:

  • the quantities of methylating substances to be added render the product non-potable, or
  • the methylating substances cannot be easily extracted.

If the National Director is not satisfied that both criteria have been met, a sample of the proposed formula will be analysed by the Australian Government Analytical Laboratories (AGAL) at Tax Office expense.

The AIG maintains a register of approved formulas, updates of which will be published in this guide.

5.4 Methylated spirits prohibitions

The Spirits Act 18 prohibits the use of methylated spirits in the manufacture or preparation of any articles of food or drink, or of any essences, tinctures or medicines.

Sub section 15(1) of the Spirits Act provides that a person shall not:

  • abstract any methylating substance or any fractional part or ingredient thereof from any methylated spirits, or
  • refine or distil any methylated spirits, or
  • treat, deal with or use any methylated spirits or spirits containing any fractional part or ingredient of a methylating substance in contravention of this Act or the regulations.

Sub section 16(1) of the Spirits Act provides that a person shall not:

  1. sell or have in his possession any illicit methylated spirits, or
  2. sell or have in his or her possession any article of food or drink, or any scent 19 , essence, tincture or medicine, containing any methylated spirits or methylating substance or any fractional part or ingredient thereof.

In a prosecution for an offence against paragraph 16(1)(b) of the Spirits Act, it is a defence if the defendant proves that they did not knowingly sell or have in their possession the goods forming the subject of the prosecution 20 .

In March 2002, the Tax Office revised its policy to allow for the use of certified organic undenatured ethanol in the manufacture of certain certified organic personal care products where it can be clearly demonstrated that this is necessary to meet the requirements of organic certification. These products include cosmetics and toiletries.

5.4.1 Implications for pharmaceutical manufacture

The Spirits Act 21 provides, in part that no methylated spirits shall be used in the manufacture of medicines.

The Therapeutic Goods Administration (TGA) have stated that subsection 14(6) is too restrictive and have argued that this subsection should be administered to allow for common practice manufacturing processes where the end products are free from methylating substances as in the following examples:

  • the methylated spirit used in the manufacture of tablets is used as a granulating solvent. Granulation is the process whereby crystalline powders are mixed with certain solvents to form granules prior to compression into tablets. The methylated alcohol and other solvents are fully removed by evaporation in the drying process, leaving undetectable amounts of methylating substances in the finished products
  • methylated spirit is also commonly used worldwide in the pharmaceutical industry in the film-coating of tablets or as a solvent during the manufacture of pharmaceutical chemicals. The drug safety and evaluation branch of the TGA regularly approves applications where this is done.

5.5 Recovery of methylated spirits

The Spirits Regulations 22 specifies that methylated spirits used in manufacturing operations can only be recovered by a licensed distiller at a licensed premises and under conditions approved by the Tax Office. The recovered spirits must be re-mixed with methylating substances as directed by the Tax Office.

Section 6 Excise Tariff Item 2J - Spirit for Fortifying Australian Grape Wine or Australian Grape Must Subject to Regulations

Spirit for fortifying Australian grape wine or Australian grape must 23 is classified under ETI 2J. As the result of a change in policy in 2001, fortifying spirit, previously only available as an under bond product, was transferred to the concessional spirit permit regime. Appendix: 9.2 lists approved uses for ETI 2J spirit.

ETI 2J is a classification for the purposes of the Excise Tariff Act and covers the end use and duty status of undenatured grape spirit.

ETI 2J spirit is not available for fortifying non-grape wines, for example fruit or vegetable wines. This use is dealt with under the provisions for ETI 2M spirit.

6.1 Spirit eligible for use in fortification

Spirit for use in the fortification of Australian grape wine must comply with the requirements of Section 57B of the Distillation Act which provides that fortifying spirit means:

  • spirit distilled from wine or other products of wine making and containing not less than 74% by volume of alcohol, or
  • Australian brandy that has been matured by storage in wood for a period of not less than 2 years, being brandy that contains not less than 57% by volume of alcohol, containing flavouring and colouring matter (if any) which are of kinds approved by the Collector for the purposes of this definition and do not cause obscuration of the strength of the brandy exceeding 1.7%.

Brandy mixed with sugar which is used to sweeten champagne is classified under ETI 2J.

6.2 Strength of fortified wine

Sub section 59(1) of the Distillation Act specifies that Australian wine shall not be fortified:

  • so as to contain more than 23% by volume of alcohol, or
  • with any spirit other than fortifying spirit.

Australian wine that is intended for export may, with the written approval of the Tax Office given before the wine is fortified, contain more than 23% by volume of alcohol.

Standard 4.1.1 of the Food Standards Code, which is administered by State Departments of Health requires that fortified wine must contain not more than 22% by volume of ethanol at 20 ° C.

A minimum strength for fortified wine is not prescribed in any excise legislation. However standard 4.1.1of the Food Standards Code states that fortified wine must contain at least 15% by volume of ethanol at 20 ° C.

6.3 Permission to use

The Excise Regulations 24 specify that a person shall obtain the approval of the Tax Office before using Australian spirit for fortifying Australian wine or Australian grape must.

Tax Office approval is given by way of a concessional spirit permit specifying ETI 2J spirit for fortifying Australian grape wine and Australian grape must.

6.4 Record keeping

A permit holder is required to record details of all receipts, storage and usage of fortifying spirit and retain those records as evidence that all accountable spirit has been used in accordance with the permit. They are required to make their records available to the Tax Office on request 25 .

The Tax Office does not require the creation of additional records for excise purposes providing that necessary details are recorded in the permit holder's normal commercial documentation see section 6.7 (Use of spirit). Inadequate records may mean that all spirit may not be accounted for and call up of duty may be considered at the ETI 2H rate 26 .

6.5 Receipt of spirit

A permit holder is required to record all spirit receipts. They should retain the supplier delivery documents (consignment note, delivery docket and so on) as part of their permanent record of receipts. The fortifying spirit register form (Appendix: 9.5) is a suitable format for spirit records.

6.6 Storage of spirit

A permit holder is accountable for all spirit received into stock.

The Excise Regulations 27 requires that spirit delivered under regulation 142 for approved industrial or manufacturing purposes must be kept separate from other goods on the premises and, if required by the Tax Office, be kept in a secure and safe room.

The fortifying spirit register form (Appendix: 9.5) is suitable for recording spirit storage. Working documents such as operations and cellar notes also form part of the permanent record and are to be retained and produced when requested by the Tax Office.

6.7 Use of spirit

A fortifier is required to record the following details for each fortification:

  • date and fortification identification number
  • operations/cellar note number (this may not be used in smaller wineries)
  • wine details including
    • litres of wine
    • baum é of grape must
    • baum é of fermented wine, and
    • alcoholic strength of wine
  • spirit usage details including
    • litres of spirit used
    • alcoholic strength of spirit used, and
  • fortified wine details, including
    • litres of fortified wine produced
    • alcoholic strength of fortified wine, and
    • baum é of fortified wine.

The Schedule: account of fortifying spirit usage form (Appendix: 9.4) is a suitable format for use by permit holders.

6.8 Clearance of spirit

ETI 2J fortifying spirit is required to be cleared on an excise return (usually lodged with the Tax Office by the spirit distiller). The spirit can then only be delivered to holders of appropriate concessional spirit permits.

Section 7 EXCISE TARIFF ITEM 2P - SPIRIT FOR SCIENTIFIC OR EDUCATIONAL PURPOSES, SUBJECT TO REGULATIONS

Although ETI 2P appears in the Schedule to the Excise Tariff Act, current Tax Office policy is to approve all such concessional spirit deliveries as ETI 2M or ETI 2N. This will not adversely affect the permit holder but will allow the AIG to get an accurate picture of the split between undenatured and denatured spirit clearances. With regard to Universities, Technical Colleges and other educational institutions, it also allows the AIG to overcome the outdated and restrictive list of educational institutions covered by Excise By-Law No. 47 .

ETI 2P is covered by regulations 152 - 160A of the Excise Regulations. Those regulations are not relevant to the tariff items under which the permissions for spirit use fall.

Section 8 EXCISE TARIFF ITEM 2Q - SPIRIT FOR USE IN PUBLIC HOSPITALS, OR FOR USE IN THE MANUFACTURE OF MEDICINAL PREPARATIONS FOR USE IN PUBLIC HOPITALS AND UNIVERSITIES, SUBJECT TO REGULATIONS

Although ETI 2Q appear in the Schedule to the Excise Tariff Act, current Tax Office policy is to approve all such concessional spirit deliveries as ETI 2M or ETI 2N. This will not adversely affect the permit holder but will allow the AIG to get an accurate picture of the split between undenatured and denatured spirit clearances. With regard to Universities, Technical Colleges and other educational institutions, it also allows the AIG to overcome the outdated and restrictive list of educational institutions covered by Excise By-Law No. 47 .

ETI 2Q is covered by regulations 117 - 125 and 125A - 125G of the Excise Regulations. Those regulations are not relevant to the tariff items under which the permissions for spirit use fall.

Section 9 EXCISE TARIFF ITEM 11K - DENATURED ETHANOL FOR USE AS FUEL IN AN INTERNAL COMBUSTION ENGINE

On 13 September 2002, the Government announced its intention to remove the fuel tax exemption on ethanol and provide domestic ethanol producers with a 12-month producer subsidy (subsequently extended until June 2011).

Consequently on 18 September 2002, ETI 2R (denatured ethanol for use as a fuel in internal combustion engines, as prescribed by by-law) was repealed and replaced by ETI 11K (denatured ethanol for use as fuel in an internal combustion engine). The change meant that excise duty and a related Customs duty (on imported product) were imposed on ethanol used in fuel for internal combustion engines at the current rate of 38.143 cents per litre. A production subsidy of 38.143 cents per litre was provided to Australian ethanol producers for ethanol used in such fuel. The administration of the subsidy is handled by the Department of Industry, Tourism and Resources.

If petroleum and ethanol blends (for example, blends containing 10% ethanol) are manufactured at a licensed distillery, an excise manufacturer's licence is required in addition to a distiller's licence (see last paragraph of section 2.4 distillers' licences in chapter 2 of this guide). The blending of petroleum and ethanol in a one-step process is then permitted. This is because the ethanol remains under bond and therefore poses minimal compliance risk.

Any ethanol to be blended outside the distillery needs to be denatured first at the distillery then a second blending process undertaken by the licensed excise manufacturer to make the petroleum blend.

The volume of ethanol is required to be corrected to 20 ° C in accordance with the preamble to The Schedule to the Excise Tariff Act. Fuel ethanol is required to be corrected to the industry standard of 15 ° C.

Ethanol used in the manufacture of biodiesel is an approved industrial use for concessional purposes. The ethanol is expended during the manufacturing process and the final biodiesel product contains no ethanol. Although the biodiesel is used as an automotive fuel, no ethanol is consumed in internal combustion engines. Therefore there is no liability to pay excise duty under ETI 11K.

Fuel ethanol, being ethanol blended with a minimum of 1% petroleum, does not fall to ETI 11K unless it is intended for use in an internal combustion engine. Where fuel ethanol is not intended for use in an internal combustion engine, ETI 2N is appropriate. A concessional spirit permit is required.

Section 10 CONCESSIONAL SPIRIT DISTRIBUTION NETWORK

This network comprises spirits manufacturers, distillers, other entities holding the appropriate excise permits and approved concessional spirits resellers.

10.1 Concessional spirit manufacturers (distillers)

The manufacturers of concessional spirit in Australia are companies licensed under the Excise Acts. In accordance with subsection 20(1) of the Spirits Act , provided they hold a spirit maker's general licence under the Distillation Act, they may make and sell methylated spirits subject to the regulations without any further licence.

It is the responsibility of the distiller to lodge an excise return to clear concessional spirit for home consumption 28 .

There is also a small number of non-distillery clients who import ethanol for blending with Australian spirit. These require an excise manufacturer licence.

10.2 Concessional spirit resellers

Concessional spirit resellers obtain concessional spirit under a resellers permit and on-sell the product to approved end use permit holders.

Resellers operate in one of two ways:

  • they receive packaged product and on-sell that packaged product in the same container without altering the product (that is product in/product out), and/or
  • they receive bulk product then break bulk (unpack), repack and sell the repackaged product.

Resellers who repack product must have that part of their operations approved on their permit. For example repack and resell to approved end users.

Resellers approved to repack must record repacking losses and gains.

As with end users, resellers are required to maintain accurate records of the receipt and disposal of spirit. These records can be in the form of standard commercial documentation.

Resellers should ensure that their records include details of quantities, strengths and grades of spirit delivered, including the following individual transaction details:

  • name and address of purchaser
  • permit number, practitioner registration number, school details or TGA certificate number
  • quantity, strength and grade of spirit sold, and
  • stock-on-hand and strength of that stock.

10.3 Concessional spirit end-users

Concessional spirit end-users must be either permit holders 29 or be included in the exempt categories listed in section 11.1 .

Section 11 CONCESSIONAL SPIRIT PERMIT PROCESS

11.1 Exemptions

As a long-standing administrative practice, certain concessional spirit end users do not require permits provided they are in an exempt category. Details are as follows:

Health care practitioners (60 litres per year without a permit) including:

 

Traditiona l

 

chiropractor, doctor, dentist, osteopath, physiotherapist, podiatrist, registered nurse and veterinary surgeon. The practitioner's certificate number should be quoted to the supplier and should appear on the sales/delivery records

 

Alternative

 

acupuncturist, herbalist, homeopath, naturopath. A copy of the Therapeutic Goods Act (TGA) certificate of exemption should be provided to the supplier. The TGA number is to appear on the sales/delivery records

Pharmacists (120 litres per year without a permit).

 

required to quote/show their practitioner's certificate number which is to appear on the sales docket

Educational Institutions (5 litres per year without a permit) including:

 

universities, secondary schools, colleges, institutes of technology, institutes of TAFE, agricultural institutes and technical colleges.

Any person in the above categories who requires more than the exempt limits must apply for a concessional spirit permit.

Sea-going vessels (refer to Appendix: 9.8 ) .

Overseas clients (refer to Appendix: 9.8 ) .

These exemptions were introduced to reduce administrative and compliance costs to small volume/low risk users. An application for use of concessional spirit is required from all other intending users.

11.2 Applications

The AIG has national responsibility for the issue of permits for the use of concessional spirit.

11.2.1 Risk assessment

Regulation 30A of the Spirits Regulations requires applicants who apply for SMS for a specific end use to first justify why they cannot use IMS, which is not subject to the CEO's control.

Once an applicant has satisfied this requirement, they may be issued with a permit to receive one of the approved SMS formulas listed in Appendix: 9.3.

If an applicant wishes to receive ETI 2M undenatured spirit they must first justify why they could not use IMS or SMS (ETI 2N) spirit instead.

Undenatured spirit represents the greatest risk of being diverted to the production of alcoholic beverages. SMS formulations represent a lesser risk to varying degrees, and IMS are sufficiently denatured to minimise the risk of diversion.

11.2.2 Permit validity

First time applicants for permits are generally issued a permit with a validity period of one year from the date of issue.

On renewal, permits are valid for five years from the date on which they are renewed.

In the case of permits which are valid for more than one year, the annual spirit allowance will be shown on each permit.

A permit for a once only allowance may be issued in response to a specific application. For example because an applicant requires concessional spirit for an approved purpose which will be undertaken once only. Once only permits are valid for a period of six weeks from the date of issue. The permit holder should take delivery of the approved quantity in one delivery only within that six week period.

The AIG sends to each approved supplier nominated by the applicant details of each permit number, permit holder's name, quantity and type of spirit approved, and delivery address. The nominated supplier is not given any other information dealing with the application or the permit (for example, specific end-use details) which may be commercially sensitive.

Regulations 117A (spirit for use in public hospitals - related to ETI 2Q) and 153 (spirit for industrial or scientific purposes or educational institutions - related to ETI 2P) of the Excise Regulations and regulation 19 (spirit for special manufacture or special purpose) of the Spirits Regulations specify that spirit for these purposes may not be delivered at an alcoholic strength less than 94% by volume of alcohol without Tax Office permission. Current policy is to allow delivery under ETI 2M or ETI 2N rather than ETI   2P or ETI 2Q at less than that strength to fit in with the requirements of applicants. See Section 7.

11.3 Documentary security/cash surety

The Tax Office has the right to require a security 30 .

If the Tax Office assesses that an applicant presents sufficient risk to warrant the taking of a security, a submission to this effect will to be submitted to the National Director, AIG. The assessment is carried out according to a risk matrix which evaluates the likelihood of the applicant complying with excise requirements and the possible risk to the revenue.

Should a security be considered necessary, the amount involved is calculated on the estimated average monthly excise which would apply to the goods if excise duty were payable. This amount is calculated at the ETI 2H duty rate.

Section 20 of the Excise Act allows for the taking of a fresh security when it is considered to be necessary. There is no limit to the amount of a fresh security.

11.4 Essence agreement

If an applicant requests approval to use concessional spirit to manufacture essences and flavourings for the food industry, they will be required to enter into an agreement with the Tax Office that they will comply with all requirements relating to the production, marketing and sale of these products.

The relevant agreement is the 'Terms of Agreement to Govern the Manufacture and Distribution of Spirit Based Food Essences and Flavourings Free from Excise Duty' (Appendix 9.6).

11.5 Record keeping

The Tax Office has control of spirit delivered for approved industrial or manufacturing purposes until the spirit is used for the approved purposes 31 .

Under subsection 60(1) of the Excise Act, goods under Tax Office control are required to be accounted for to the satisfaction of a collector.

All permit holders are required to maintain records that satisfactorily account for the use of concessional spirit in accordance with the approved purpose. Records must be kept for a period of five years.

Concessional spirit resellers are not required to keep records other than normal commercial documentation provided that the records include:

  • quantity, strength and grade of spirit received
  • individual sales showing
    • name and address of purchaser
    • purchaser's permit number, practitioner's certificate registration number or TGA certificate of exemption number or educational institution name, and
    • quantity, strength and grade of spirits sold
  • quantity and alcoholic strength of stock on hand
  • details of all spirit from the time of receipt, through break bulk to final repackaging (for resellers who repack spirit received in bulk containers), and
  • details of all losses or gains relating to repacking operations plus the final number and size of the repackaged product.

Permit holders should carry out and record regular stocktakes (at least monthly).

Manufacturers and end-users are also not required to maintain any prescribed recording system provided that their records enable them to fully account for the disposal of the spirit in accordance with the approved purpose.

The responsibility for the final accounting of spirit rests with the end-user. The Tax Office may require an end-user to keep records additional to normal commercial records if they have insufficient internal stock controls in place or the records which they keep are not detailed enough to properly account for the use and disposal of spirit.

11.6 Physical security

A permit holder is required to keep concessional spirit securely.

Storage of concessional spirit should ideally be under locked security. It is normal industry practice that transport by bulk carrier is under locked security and on arrival the spirits are transferred to secure vats or tanks.

A permit holder is responsible for the control and safe keeping of concessional spirit once the spirit has been received into their stock. The Tax Office does not normally insist on any particular security arrangements other than normal good commercial practice 32 .

11.7 Excise returns

Previously excisable goods were cleared on Nature 40 entry for home consumption forms which were forwarded to the Australian Customs Service (ACS) at regional offices in each State where they were processed on behalf of the Tax Office. From 1 July 2003 the Tax Office assumed full responsibility for the processing of excise return forms which replaced Nature 40 forms for the clearance of excisable goods.

11.7.1 Excise returns - industrial and mineralised methylated spirits

All licensed methylators and distillers who methylate spirits to industrial methylated spirits specifications or mineralised methylated spirits specifications are required to include aggregated quantities on their periodic excise return. ETI 2N applies.

11.7.2 Excise returns - undenatured and specially methylated spirits

Distillers, excise storage licensees, excise manufacturers or methylators who sell spirits to concessional spirit permit holders (resellers and/or end-users) are required to include aggregated quantities on their periodic returns under ETI 2M or ETI 2N.

11.8 Unaccountable losses

Distillers, re-sellers, manufacturers and end-users must keep sufficiently detailed records to fully account for concessional spirit.

Failure to account to the satisfaction of the Tax Office for undenatured spirit, (ETI 2M) or SMS (ETI 2N), may result in a call up of excise duty under section 60 of the Excise Act.

Where concessional spirit is used as a beverage, the call up of excise duty will be at the rate which applies to ETI 2H, unless the spirits are brandy, whisky, rum or liqueurs which are classified to their own ETI.

Unaccountable losses of ETI 2N spirit, or diversions for use for a non-approved purpose, may be called up at the relevant rate which applies to the end use of the spirit. For example if denatured spirit is diverted for use as a fuel in an internal combustion engine the call up of duty would be at the ETI 11K rate.

Licensee and permit holders are required to inform the Tax Office whenever spirit cannot be accounted for. For example, due to leakage, spillage, theft or other manufacturing or delivery loss. The Tax Office will advise what action needs to be taken.

Due to the vagaries of the industry and the variety of end-uses, processes and manufacturers involved, it is not possible to be prescriptive about what percentage or volume of spirit loss would be acceptable in all cases. The Tax Office will examine each loss on its merits to determine the acceptability or otherwise of the spirit loss.

11.9 Tolerances on quantities delivered/received

Tax Office policy used to allow manufacturers and resellers of concessional spirit to supply approved clients with a maximum of the quantity approved on their permit. There was no tolerance for supplying in excess of the approved quantities. For example a breach of the permit would occur if a manufacturer added, say, 5 litres of methylating substance to a drum containing 200 litres of ethanol to produce the required denatured spirit and thereby supplied 205 litres instead of the 200 litres of denatured spirit approved on the permit.

In acknowledging that having to apply for minor adjustments to the approved quantities shown on permits was inconvenient to manufacturers, resellers, their clients and the Tax Office, the Tax Office introduced the following policy change effective from 1 April 2003:

  • all clients may receive a maximum of 105% of the quantity of spirit approved on their current permit without the need for adjustment to that permit. For example a permit for 200 litres will now allow the delivery of up to 210 litres without further approval from the AIG
  • the manufacturer or reseller of concessional spirit, is to enter the full amount delivered on the delivery documents and maintain a cumulative total of the quantities delivered to the client, and
  • the manufacturer or reseller is to ensure that the extended limit is not exceeded.
  • The policy change is intended to:
  • simplify administration for spirit manufacturers, resellers and the Tax Office, and
  • reduce compliance costs for spirit manufacturers, resellers and end-users.

APPENDIX: 9.1 Index of approved purposes for 2M concessional spirit

(subsection 4.1 in this chapter)

A

Abalone production

Aerosol breath spray

Agricultural laboratory use

Alcohol standards

Anaesthetic mixes

Analysis of free fatty acid

Analytical chemistry

Analytical laboratory procedures

Analytical medical research

Analytical reagent

Animal liquid supplements

Animal medicines

Aquarium tablets

Aromatherapy products

Art conservation/restoration

Artificial insemination

Aviation fuel testing laboratory use

B

Bacteriological analysis

Bio pharmaceutical manufacture

Biochemical manufacturing

Biochemistry laboratory use

Biological laboratory use

Biological products for medical and diagnostic purposes

Biology classes

Biomedical research

Blood analysis

Botanical essences

Brine refrigerant

Bush flower essences

C

Cake manufacturing and decorating

Calibration of laboratory instruments

Calibration of medical equipment

Calibration standards for instruments

Cattle food supplement

Ceramic fuel cells

Chemical bonding process of automotive electronic products

Chemical disposition of silver

Chemical experiments

Chemical laboratory use

Chemical research

Chemical standards

Chemical synthesis

Chemical testing

Chemistry classes

Chemistry experiments

Chemistry purposes

Cider vinegar

Cleaning and restoring artwork

Cleaning and sterilising food making machinery

Cleaning and sterilising laboratory equipment

Cleaning and sterilising manufacturing equipment for medical products

Cleaning and sterilising pharmaceutical manufacturing equipment

Cleaning and sterilising surfaces in contact with food manufacture

Cleaning and treatment of museum objects

Cleaning composite aircraft structures prior to adhesive bonding

Cleaning microbiological laboratory

Cleaning of aircraft fuel quality control instruments

Cleaning of bottling machine

Cleaning of breathing apparatus, cylinders and associated equipment

Cleaning of diagnostic equipment

Cleaning of equine artificial insemination equipment

Cleaning of glazed ceramics prior to the application of gold

Cleaning of hearing aids

Cleaning of high vacuum equipment

Cleaning of hospital equipment

Cleaning of laboratory equipment

Cleaning of laser window in rapid prototyping system

Cleaning of medical equipment

Cleaning of meteorological equipment

Cleaning of optical components used in precision instruments

Cleaning of optical equipment

Cleaning of optical fibre connectors and cable

Cleaning of pharmaceutical packaging machinery

Cleaning of photographic equipment and components

Cleaning of research equipment

Cleaning of scientific apparatus

Cleaning of sensitive electronic equipment

Cleaning of surgical instruments

Clinical pathology laboratory use

Conservation and restoration of sculpture, furniture, ceramics and antiques

Conservation and restoration of archaeological artefacts

Conservation of archives material

Conservation of cultural artefacts such as cleaning photographs, works of art and paper documents, metals and textiles.

Copper bromide laser systems

Cough mixture

Cough preparation for horses

Culinary essences

D

Decontamination of laboratory equipment

Deer antler/velvet products

Defat protein

Dentistry

Determination of grape maturity

Diagnostic and research purposes

Diagnostic reagents

Dilution in flux bath of wave soldering machine

Dilution of paint in a non-destructive tyre inspection machine

Disinfection of dental equipment

Disinfection of equipment and preservative for preparation of oral products

Disinfection of hospital equipment

Disinfection of laboratory equipment

Disinfection of medical equipment

DNA extraction

Drug analysis

Dye dilution in manufacture of soft contact lenses

Dye sensitive solar cells

E

Echinacea root tincture

Educational and research purposes

Educational laboratory use

Electroplating solutions

Embalming and preserving human cadaveric material

Entomological research laboratory use

Epoxy floor coating

Essence manufacture

Essential oil extraction

Essential oil products. For example skin sprays, healing creams, ointments

Ethanol standards

Exported under a valid ECN for medical purposes

Exposition liqueur added to sparkling wine

Extractive solutions

F

Fat analysis

Fertile egg vaccination processes

Filling ion exchange columns and preserving resin between production runs

Filling nautical compasses

Fine metal casting processes

Fingerprint development

Fish attractants

Fish food additive

Fish oil

Fishery research

Flavours and extracts

Flower essences

Foam and bacteria control in the manufacture of fertiliser

Food additives

Food colour

Food supplements

Forensic analysis/testing

Fortification of apple cider

Fortification of berry wines

Fortification of fruit wines

Fortification of mead

Fortification of non grape wine

Free fatty acid analysis

Fruit dewaxing solutions

Fruit fly bait

Fruit fly traps

G

Gargles

Gemstone enhancement

General hospital use

General laboratory use

General pharmaceutical use

General research use

Gold galvaniser metal protectant

Grape colour analysis

Gum resins for artistic purposes

H

Hair medicaments

Hair care products

Health food products

Herbal creams

Herbal extracts

Herbal liniments

Herbal liquid extracts

Herbal medicines, extracts, mixtures, preparations, remedies and tinctures

Herbal tablets

Herbal therapeutic substances

Histology laboratory use

Histopathological procedures

Homoeopathic creams

Homoeopathic preparations, remedies, medicines

Horticultural laboratory use

Hospital pharmacy

Hospital sterilisation

Hospital use

I

Ice sculptures, where contact with foodstuffs

Indicator solutions for laboratory purposes

Internal medicines

In-vitro diagnostic kits

L

Laboratory reagents

Laboratory use

Lip balms

M

Maceration of herbs

Marine research

Materials conservation work in museum collection

Meat marking dye

Medical pathology

Medical research purposes

Medicaments

Medicinal compounds

Medicinal essences

Medicines

Metallurgical laboratory use

Metal alkoxide solutions

Microbiological laboratory use

Mineral dietary supplements

Mouthwash

Museum operations

N

Naturopathic medicines

Nuclear medicine laboratory use

Nutritional supplements

O

Optical fibres

Oral care products

Oral pharmaceutical preparations

Oral veterinary products

Organic cosmetics

Organic fragrances

Organic perfumery

Organic personal care products

Organic soap

Organic toiletries

P

Pain relief products

Paper conservation

Pathology laboratory procedures

Pharmaceutical applications.

Pharmaceutical manufacture

Pharmaceutical medicines

Pharmaceutical preparations

Pharmaceutical products

Pharmacological research

Pharmacy use

Photopolymer stamps

Plant growth hormone solution

Plant propagation

Podiatry clinic use

Polyethylene and polypropylene plastics sheets for food contact

Preservation insect specimens

Preservation of anatomical specimens

Preservation of animal specimens

Preservation of aquatic flora and fauna samples

Preservation of archives material

Preservation of aromas

Preservation of biological specimens

Preservation of insect specimens

Preservation of invertebrates

Preservation of malt extracts

Preservation of natural history specimens

Preservation of plant specimens

Preservation of wildlife specimens

Preservation of zoological specimens

Printing ink for foodstuffs

Propellants within the defence industry

Q

Quality control laboratory use

R

Radiopharmaceutical tests

Radiopharmaceutical use

Reagents

Recovered wine flavour

Refrigeration brine

Remedial wine processing

Repackaging on behalf of supplier

Repair and service aircraft components

Repair of compasses

Replacement of fluid in the seal chambers of winery submersible pumps

Resale to approved end users

Research and development (in relation to other approved uses)

Research laboratory work

Restoration of antique frames, prints and paintings

Restoration of artwork

Restoration of paintings

Restoration of paper

S

Science teaching/educational purposes

Scientific experiments

Scientific laboratory use

Scientific purposes

Scientific research

Scuba equipment testing

Secondary brine refrigerant

Silvering mirrors

Skin care products

Skin preparations

Soil chemical testing

Solvents, proprietary, where formulas are approved

Specimen fixation and staining procedures

Specimen preservation for scientific purposes

Spectacle cleaning agent

Spraying grape vines to enhance quality in wine

Spraying grapes to enhance grape colour

Spraying on vines to increase berry colour

Sterilisation of 23ct Gold Flakes for use in winemaking

Sterilisation of acupuncture equipment

Sterilisation of bottling equipment

Sterilisation of corks and corking machines

Sterilisation of dental equipment

Sterilisation of fermentation and freeze drying equipment

Sterilisation of food processing machinery

Sterilisation of hospital equipment

Sterilisation of laboratory equipment

Sterilisation of medical equipment

Sterilisation of oak barrels

Sterilisation of skin for example acupuncture, tattooing, body piercing

Sterilisation of surfaces in a beverage manufacturing area

Sterilisation of surfaces in a food manufacturing area

Sterilisation of surfaces in a medical equipment manufacturing area

Sterilisation of surfaces in a pharmaceutical manufacturing area

Sterilisation of surgical instruments

Sterilisation of tissue culture

Sterilisation of veterinary equipment

Sterilisation of water filters and glass packaging

Sterilisation within dental surgeries

Sterilisation within wineries

Sterilising agent in aquaculture

Sterilising agent in plant tissue culture

Sterilising of poultry vaccinating equipment

Storage and preservation of aquatic insect specimens

Storage and preservation of biological specimens

Storage and preservation of cadavers

Storage of collection of natural history specimens

Storage of membrane filter cartridges

Storage of scientific samples

Storage of wine filter cartridges and membranes

Surgical applications

Surgical procedures

T

Tablet manufacture

Tannin solutions for wine

Teaching and research purposes

Testing of food products

Testing of paint systems applied over ABS plastic car components

Testing of security dyes in sensitised cheque papers

Tetanus antigen

Therapeutic goods

Tirage liqueur added to sparkling wine

Tissue processing

Tobacco manufacture

Traditional Chinese medical procedures

Traditional Chinese medicines

Treatment of cultural heritage items

Treatment of motion picture film

Tree breeding research

V

Vanilla fridge wipes

Vapour pressure systems

Varnish or polish for musical instruments

Vegetable oil

Veterinary medicine, preparations, procedures and products

Vinegar manufacture

W

Water quality analysis

Wine colour extraction

Wool testing

APPENDIX: 9.2 Undenatured Spirits - Approved uses of ETI 2J

(section 6 in this Chapter)

Approved uses of ETI 2J inlcude:

For use in the manufacture of:

  • sparkling grape wine
  • fortified grape wine
  • mistelle

Spirit for fortifying Australian wine or Australian sparkling wine or for fortifying Australian grape must (mistelle) subject to regulations is classified under ETI 2J.

Sparkling grape wine means wine that, by complete or partial fermentation of contained sugars, has become surcharged with carbon dioxide. Sparkling wine must contain at least 8% a/v of ethanol at 20 ° C. Sparkling wine may also contain:

  • grape spirit containing not less than 74% a/v of ethanol at 20 ° C, or
  • brandy containing not less than 57.1% a/v of ethanol at 20 ° C. It must also contain no less than 5g/L of carbon dioxide at 20 ° C (Food Standards Code, Standard 4.1.1).

Fortified grape wine means Australian wine to which has been added grape spirit, brandy or both. Fortified wine must contain at least 15% a/v and not more than 22% a/v of ethanol at 20 ° C (Food Standards Code 4.1.1). Types of fortified wines include port, sherry, muscat.

Mistelle means grape must or grape juice prepared from fresh grapes to which grape spirit has been added to arrest fermentation and which has an ethanol content between 12% a/v and 15% a/v at 20 ° C (Food Standards Code 4.1.1).

Spirits for use in the fortification of wine must comply with the requirements of section 57B of the Distillation Act. Fortifying spirit must be either:

  • a spirit distilled from wine or other products of wine making, being a spirit that contains not less than 74% by volume of alcohol, or
  • Australian brandy that has been matured by storage in wood for a period of not less than 2 years, being brandy that contains not less than 57% by volume of alcohol plus flavouring and colouring matter (if any) approved by the Collector and which do not cause obscuration of the strength of the brandy exceeding 1.7%.

Note: For the purposes of (b) above, brandy mixed with sugar, which is used to sweeten champagne, should be entered under ETI 2J.

Although Australian Food Standard 2.7.4 allows the addition of non-grape spirit to grape wine, this is not allowed under excise legislation (see the requirements for fortifying spirit above).

Prior to 1 July 2000, the Tax Office was not concerned with small strengthening top-ups of the kind mentioned above because the activity involved strengthening Australian wine and/or grape must. As there may be a revenue risk involved this is being factored into Tax Office future planning and treatment strategies.

APPENDIX: 9.3 Schedule of approved formulae for special methylated spirits

(subsection 11.2.1 in this chapter)

Schedule of approved formulae for special methylated spirits for any manufacture or purpose in which the use of industrial or mineralised spirits would be unsuitable or detrimental.

Formula number

Minimum quantity of methylating substance

For use in the manufacture of, or for the purpose of:

F1

0.5% methanol plus 2.0% benzol, toluol or petrol

For all purposes except those prohibited by the Spirits Act

Note: The Spirits Act, section.14 (6) prescribes that no methylated spirits shall be used in the manufacture or preparation of any articles of food or drink, or of any essences, tinctures, or medicines.

F2

0.5% diethyl phthalate

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F3

2.0% methanol

For all purposes except those prohibited by the Spirits Act

Note: The Spirits Act section14 (6) prescribes that no methylated spirits shall be used in the manufacture or preparation of any articles of food or drink, or of any essences, tinctures, or medicines.

F4

0.25% tertiary butyl alcohol

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F5

90 gm brucine sulphate or alkaloid per 1,000 litres of spirits

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F6

16 gm bitrex per 1,000 litres of spirits

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F7

1 kg sucrose octa acetate per 1,000 litres of spirit

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F8

90 gm quassin per 1,000 litres of spirit

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F9

0.2% acetaldehyde

Acetic acid; acetone; ethyl acetate; diethyl phthalate.

F10

10.0% acetone

Branding ink for meat producers

F11

5.0% ethyl ether

Branding ink for meat producers

F12

2.0% by weight ethylene glycol mono-ethyl ether

Mono- and di- ethylene glycol ethers

F13

0.5% methyl ethyl ketone

Cleaning solution for photocopying systems; industrial felts for paper and printing industry.

F14

5.0% butyric acid

Butyric esters.

F15

0.5% methanol plus 2.0% oil of thyme

Sausage seasoning (the finished product is to be free from methylating substance).

F16

0.75% methyl ethyl ketone plus 1.0% dioxitol

Solvent used in office duplicating process.

F17

5.0% benzol of toluol

Narcotics from opium alkaloids.

F18

5.0% sulphuric ether

Diethyl ether (anaesthetic ether).

F19

sulphur dioxide

(resulting percentage of sulphur dioxide in the spirit to be no less than 0.5%w/v)

Sterilising wine bottles.

F20

1.0% carbolic crystals and 0.5% methanol

Antiseptics and germicides.

F21

1.0% petrol

Power alcohol or blending with petrol.

F22

1.25 litres t-butyl alcohol and 4.70 grams bitrex per 1,000 litres of spirit

Scents and toilet preparations; deodorisers; products packed in aerosol form.

F23

7% PEOPS 93% ethanol PEOPS(TM) - polyethylene oxide/styrene copolymer mixed with xylene added to ethanol

Manufacture of 'diesohol'

F24

83.5% ethanol, 16.5% dieselaid D and morpholine 500 ppm.

Biofuel (fuel ethanol)

F25

0.125% tertiary butyl alcohol and 0.014% brucine sulphate in absolute alcohol

Cosmetics

APPENDIX: 9.4 Examples of fortifier records - account of fortifying spirit

(subsection 6.7 in this chapter)

Schedule: account of fortifying spirit

 

WINE TO BE FORTIFIED

FORTIFYING SPIRIT

FORTIFIED WINE

Date

Fort no.

Ops/ cellar note no.

Litres

Baume grape must

Baume fermented wine

% Natural alcohol

Litres used

% Str. alc/vol

Lals used

Litres

% Str. alc/Vol

Baume

Wine type

              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              

APPENDIX: 9.5 Example of fortifier records - fortifying spirit register

(subsections 6.5, 6.6 and 11.4 in this chapter)

Fortifying spirit register

 

RECEIPTS

DELIVERIES

SPIRIT DETAILS

SPIRITS ON HAND

Date

Consignment note no.

Fort. no.

Litres

% Str alc/vol

Lals

Vessel

Dip

Litres

% Str alc/vol

Lals

Loss/Gain

            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            

APPENDIX: 9.6 Terms of agreement to govern the manufacture and distribution of spirit based food essences and flavourings free from excise duty

(subsection 4.2.2 in this chapter)

BETWEEN:

(Name of client)

Of : (Address)

  

AND

THE COMMISSIONER OF TAXATION

of 91 Waymouth Street, Adelaide in the State of South Australia.

RECITALS

A.

The parties have reached agreement in respect of the circumstances in which THE COMMISSIONER may approve the delivery of spirits free of Excise Duty

B.

The parties wish to set out the terms of their agreement and the actions which are required to be undertaken by each of them in this agreement.

OPERATIVE PART

1. DEFINITIONS AND INTERPRETATION

1.1 In this document,

" Act "

means The Excise Tariff Act 1921 (as amended) and includes regulations made pursuant to the Act, and any related legislation;

" THE COMMISSIONER "

means THE COMMISSIONER OF TAXATION for the Commonwealth of Australia and as required, his successors or assigns and any delegate or authorised representative acting on his behalf

" party " or " parties "

Means       (name of client)       and/or THE COMMISSIONER OF TAXATION for the Commonwealth of Australia.

" person "

means any natural person and includes a firm, corporation, body corporate, unincorporated association or any governmental authority.

'restaurant'

means an entity or establishment whose principal and predominant activity is the preparation and serving of meals for consumption on the premises.

1.2 In this document, unless the contrary intention appears:

1.2.1 A reference to this document means this agreement, and references to clauses and schedules are references to clauses and schedules of this agreement;
1.2.2 Any word, term or expression for which a particular or special meaning has been attributed or ascribed it by the Act, shall be given that particular or special meaning in this agreement;
1.2.3 Singular includes the plural and vice versa;
1.2.4 A reference to any one gender includes each other gender (as the case may require);
1.2.5 A reference to a person includes that person's executors, administrators, legal personal representatives, successors and permitted assigns; and
1.2.6 An agreement on the part, or in favour of, two or more persons binds them or any one of them jointly and severally.

1.3 All headings in this agreement have been inserted for the purpose of ease of reference only and do not affect the meaning or interpretation of this agreement.

2. GENERAL

2.1 That       (name of client)       is the manufacturer of spirit based food essences and flavourings.

2.2 That       (name of client)       manufactures spirit based essences and flavourings which are intended for culinary purposes.

2.3 That       (name of client)       manufactures spirit based essences and flavourings for sale directly to commercial end users and to distributors whose customers are commercial end users.

2.4 That       (name of client)       does not manufacture spirit based essences or flavourings for retail sale nor for direct consumption as an alcoholic beverage.

2.5 That THE COMMISSIONER may approve the delivery of spirits free from Excise duty for manufacturing purposes which are approved purposes in accordance with Excise Regulation 142.

2.6 That THE COMMISSIONER by way of guidelines and policy has stated that the manufacture of essences which are clearly intended for culinary purposes, is an approved purpose.

2.7 That THE COMMISSIONER has approved the delivery of Excise Duty free spirits to       (name of client)       for the purpose of manufacturing spirit based food essences and flavourings.

3. THE MANUFACTURER'S UNDERTAKING AND ACKNOWLEDGEMENTS

3.1       (name of client)       acknowledges that to continue to receive Excise Duty free spirit for the manufacture of spirit based essences and flavourings they must meet the terms of this agreement and, where appropriate, they must obtain undertakings from distributors and end users.

3.2 Accordingly,       (name of client)       covenant and agree to do the following:

3.2.1 To make available to THE COMMISSIONER, within 14 days of his request, all sales data, including cash sales, relating to the sale of spirit based food essences and flavourings to commercial end users and distributors. Such data will include details of individual sales and the name, address and Australian Business Number (when available) of the purchaser and where required, a copy of the relevant undertaking.

SALES TO END USERS

3.2.2       (name of client)       may sell spirit based food essences and flavourings to end users in the business of commercial food manufacture including but not restricted to bakeries, patisseries, confectionery and ice-cream manufacturers without the imposition of further controls.
3.2.3 In the event that       (name of client)       wishes to sell spirit based food essences and flavourings to a commercial end user which is a restaurant, they may only do so after obtaining from the owner of the restaurant business undertakings and acknowledgment that:
  1. the essences and flavourings purchased are only to be used in the restaurant kitchen for the manufacture of food and are not to be diverted for use in the restaurant bar.
  2. the owner ensures that the manager of the kitchen is aware of the prohibition against spirit based essences and flavourings being diverted for use in the restaurant bar and that the manager of the kitchen undertakes to control and oversee the use of such essences and flavourings strictly for culinary purposes.
  3. both the owner and the manager of the kitchen undertake to ensure that the essences and flavourings not be converted to or consumed as an alcoholic beverage.
  4. the spirit based food essences and flavourings will not be on sold to other establishments or persons.
  5.       (name of client)       has absolute discretion and the power and ability to cease to supply essences and flavourings if either they or THE COMMISSIONER suspect that the essences and flavourings are being sold or used contrary to the terms of this agreement
3.2.4 That they will not sell their spirit based food essences and flavourings directly to any other end user, including but not limited to licensed hotels and clubs without the express written permission of THE COMMISSIONER.
3.2.5 The form of undertaking to be obtained by       (name of client)       for the purposes of clause 3.2.2 shall be in accordance with Schedule I.

SALES TO DISTRIBUTORS

Obtain from the distributor undertakings and agreement that;

3.2.6 The distributor may sell, without further controls,       (name of clients)       spirit based food essences and flavourings to end users in the business of commercial food manufacture including but not restricted to bakeries, patisseries, confectionery and ice-cream manufacturers.
3.2.7 In the event that the distributor wishes to sell       (name of clients)       spirit based food essences directly to a commercial end user which is a restaurant it may only do so after obtaining from the owner of the restaurant business an undertaking and acknowledgment that:
  1. the essences and flavourings purchased are only to be used in the restaurant kitchen for the manufacture of food and are not to be diverted for use in the restaurant bar.
  2. the owner ensures that the manager of the kitchen is aware of the prohibition against spirit based essences and flavourings being diverted for use in the restaurant bar and that the manager of the kitchen undertakes to control and oversee the use of such essences strictly for culinary purposes.
  3. both the owner and the manager of the kitchen undertake to ensure that the essences and flavourings not be converted to or consumed as an alcoholic beverage.
  4. the food essences and flavourings will not be on sold to other establishments or persons.
  5.       (name of client)       or his distributors has absolute discretion, the power and ability to cease to supply essences and flavourings if either (name of client) ,the distributor or THE COMMISSIONER suspect that the essences and flavourings are being sold or used contrary to the terms of this agreement.
3.2.8 The distributor will not sell       (name of clients)       spirit based food essences and flavourings directly to any other end user, including but not limited to licensed hotels or clubs, without the express written permission of THE COMMISSIONER.
3.2.9 The distributor will make available to THE COMMISSIONER, within 14 days of his request, all sales data, including cash sales, relating to the sale of spirit based food essences and flavourings to commercial end users. Such data will include details of individual sales and the name, address and Australian Business Number (when available) of the purchaser and where required, a copy of the relevant undertaking.
3.2.10       (name of client)       has, in his absolute discretion, the power and ability to cease to supply the distributor with their spirit based food essences and flavourings if either       (name of client)       or THE COMMISSIONER suspect that the essences and flavourings are being sold or used contrary to the terms of this agreement.
3.2.11 The form of undertaking to be obtained by       (name of client)       from the distributor for the purposes of clause 3.2.6 to 3.2.10 will be in accordance with Schedule II.
The form of undertaking to be obtained by the distributor for the purposes of clause 3.2.7 will be in accordance with Schedule I.

4. CONFIDENTIALITY

4.1 This agreement is confidential to the parties hereto and may not be disclosed by either party to any person except:

4.1.1 to employees, legal advisers and other consultants of the parties requiring information for the purposes of implementing the terms of this Agreement;
4.1.2 with the consent of each other;
4.1.3 if required by law;
4.1.4 if required in connection with legal proceedings relating to this agreement.

5. DEFAULT CLAUSE

5.1 If THE COMMISSIONER becomes aware of a breach of any of the terms contained in this Agreement he may serve a written notice under Regulation 151 of the Excise Regulations on       (name of client)       revoking their approval for delivery of spirit free from Excise duty.

5.2 If the Act or any regulations made pursuant to the Act or the guidelines and/or policy of THE COMMISSIONER concerning the granting or permitting of access to concessional spirit is amended or varied then THE COMMISSIONER may in his absolute discretion terminate this agreement.

EXECUTED as a Deed

Signed by ........................................................................

Position (......................................)

at ................................................................................

on this ......day

of ..............200   .

in the presence of

Name in Full : ........................................................................

Signature ........................................................................

Date ........................................................................

                                                                                                                                     

SIGNED for and on behalf of

THE COMMISSIONER OF TAXATION FOR

THE COMMONWEALTH OF AUSTRALIA

by ........................................................................

Assistant Director Policy - AIG Excise

at Adelaide.

This .......................... day of .............................. 200 .

in the presence of :

Name in Full : ........................................................................

Signature ........................................................................

Date ........................................................................

This is the Schedule I referred to in the Agreement dated .......... between ............... and THE COMMISSIONER

SCHEDULE 1

USER AGREEMENT

BETWEEN:

..................................................................       ('MANUFACTURER')

 

OR

 

..................................................................       ('DISTRIBUTOR')

AND

..................................................................       ('END USER')

RECITALS

A.

(The Manufacturer / Distributor) agrees to supply a range of spirit based food essences and flavourings to (The End User).

B.

The parties wish to set out the terms of their agreement and the actions which are required to be taken by each of them in this Agreement.

THIS AGREEMENT WITNESSES:

1. (The Manufacturer / Distributor) has supplied (The End User) with spirit based food essences and flavourings.

2. (The End User) is the owner of and operates a restaurant business.

3. (The End User) undertakes and acknowledges that:

3.1 The essences and flavourings purchased are only to be used in the restaurant kitchen for the manufacture of food and are not to be diverted for use in the restaurant bar.
3.2 The manager of the kitchen is aware of the prohibition against spirit based essences and flavourings being diverted for use in the restaurant bar and that the manager of the kitchen undertakes to control and oversee the use of such essences strictly for culinary purposes.
3.3 Both the owner and the manager of the kitchen undertake to ensure that the essences and flavourings not be converted to, or consumed as, an alcoholic beverage.
3.4 The food essences and flavourings will not be on sold to other establishments or persons.
3.5 The Manufacturer or its distributors have in their absolute discretion the power and ability to cease to supply essences and flavourings if either The Manufacturer, the distributor or THE COMMISSIONER suspect that the essences and flavourings are being sold or used contrary to the terms of this agreement.

..............................

Manufacturer/Distributor

.................................

End User

(Date)

(Date)

This is the Schedule II referred to in the Agreement dated .............. between ............... and THE COMMISSIONER

SCHEDULE 2

DISTRIBUTION AGREEMENT

BETWEEN:

..................................................................       ('MANUFACTURER')

  

AND

..................................................................       ('DISTRIBUTOR')

RECITALS

A.

(The Manufacturer) agrees to supply a range of spirit based food essences and flavourings to (The Distributor).

B.

The parties wish to set out the terms of their agreement and the actions which are required to be taken by each of them in this Agreement.

THIS AGREEMENT WITNESSES:

1. (The Manufacturer) has supplied (The Distributor) with spirit based food essences and flavourings.

2. (The Distributor) sells these spirit based food essences and flavourings to end users in the business of commercial food manufacture including but not restricted to bakeries, patisseries, confectionery and ice-cream manufacturers.

3. (The Distributor) may sell spirit based food essences and flavourings to restaurants but may only do so after obtaining from the owner of the restaurant business the following undertakings and acknowledgments:

3.1 The essences and flavourings purchased are only to be used in the restaurant kitchen for the manufacture of food and are not to be diverted for use in the restaurant bar.
3.2 The owner ensures that the manager of the kitchen is aware of the prohibition against spirit based essences and flavourings being diverted for use in the restaurant bar and that the manager of the kitchen undertakes to control and oversee the use of such essences strictly for culinary purposes.
3.3 Both the owner and the manager of the kitchen undertake to ensure that the essences and flavourings not be converted to, or consumed as, an alcoholic beverage.
3.4 The food essences and flavourings will not be on sold to other establishments or persons.
3.5 (The Manufacturer) or its distributors have in their absolute discretion the power and ability to cease to supply essences and flavourings if either (The Manufacturer), (The Distributor) or THE COMMISSIONER suspect that the essences and flavourings are being sold or used contrary to the terms of this agreement.

4. (Name of Distributor) will not sell spirit based food essences and flavourings directly to any other end user, including but not limited to licensed hotels or clubs without the express written permission of THE COMMISSIONER.

5. (Name of Distributor) will make available to THE COMMISSIONER, within 14 days of his request, all sales data, including cash sales, relating to the sale of spirit based food essences and flavourings to commercial end users. Such data will include details of individual sales and the name, address and Australian Business Number (when available) of the purchaser and where required, a copy of the relevant undertaking.

..............................

Manufacturer

.................................

Distributor

(Date)

(Date)

APPENDIX: 9.7 FORM 21 (REGULATION 148)

(subsection 4.3 in this chapter)

APPENDIX: 9.8 Exemptions from the concessional spirits permit process.

(subsection 11.1 in this chapter)

Sea-going vessels : 3 litres of undenatured ethanol per ship per year for first aid purposes without a permit, subject to the following guidelines:

  • ship's agent must supply the concessional spirit reseller/pharmacy with an order signed by the ship's captain and quoting Australian Marine Safety Marine Order No. 1
  • order documentation must contain:
    • name of the ship and Lloyds number
    • voyage number and date, and
    • captain name.
  • reseller/pharmacy is to record the details of the order in their register and provide the agent with a delivery advice.
  • agent to sign for receipt of the spirit.
  • agent to deliver the spirit to the captain on board the ship.
  • captain to sign the delivery advice for receipt of the spirit.
  • agent to return the signed delivery advice to the reseller/pharmacy.
  • reseller/pharmacy to retain the signed delivery advice.

Overseas clients : 20 litres on a once only basis without a permit. The following conditions must be met:

  • request is for a once only approval
  • supplier is an approved supplier under the concessional spirits permit scheme
  • quantity does not exceed 20 litres, and
  • indicated use is an approved use under the concessional spirits permit scheme.

1 Section 57B of the Distillation Act

2 Regulation 142 of the Excise Regulations

3 Regulation 149 of the Excise Regulations

4 Sub-section 6 (2) of the Distillation Act, sub-section 3 (2) of the Spirits Act and the Schedule to the Excise Tariff Act

5 Sub-section 6 (2) of the Distillation Act, sub-section 3 (2) of the Spirits Act and the Schedule to the Excise Tariff Act

6 Regulation 153 of the Excise Regulations

7 Not elsewhere included (in the Schedule to the Excise Tariff Act).

8 Subsection 5(1) of the Excise Tariff Act.

9 Section 25 of the Excise Act 1901

10 Regulation 160A provides that a reference to universities in regulation 158 includes technical colleges and other educational institutions.

11 The Macquarie Dictionary , 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW

12 Regulation 17 of the Spirits Regulations

13 Subregulation 19(1) of the Spirits Regulations

14 Subsection 14(4) of the Spirits Act

15 Regulation 17(1) of the Spirits Regulations.

16 Subregulation 17(2) of the Spirits Regulations.

17 Regulation 19 of the Spirits Regulations.

18 Subsection 14(6) of the Spirits Act.

19 As a long-standing administrative practice, the Tax Office recommends SMS for the manufacture of scents, perfumes and toiletries. Methylation formulas approved specifically for the manufacture of these products are included in the schedule of approved methylating formulas at Appendix 9:4.

20 Subsection 16(2) of the Spirits Act.

21 Subsection 14(6) of the Spirits Act.

22 Regulation 28 of the Spirits Regulations.

23 Unfermented juice as pressed from the grape.

24 Regulation 86 of the Excise Regulations.

25 Section 60 of the Distillation Act.

26 Section 60 of the Excise Act.

27 Regulation 149 of the Excise Regulations.

28 Sections 58 and 61C of the Excise Act.

29 Regulation 142 of the Excise Regulations 1925.

30 Section 16 of the Excise Act.

31 Regulation 149 of the Excise Regulations

32 Regulation 149 of the Excise Regulations requires that spirits delivered under regulation 142 for approved industrial or manufacturing purposes must be kept separate from other goods on the premises and, if required by the Tax Office, must be kept in a secure and safe room.

ATO references:
NO NAT 14790-04.2006


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