Excise guidelines for the fuel industry

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

4 LICENSING: Suspension and cancellation

4.1 PURPOSE

This Chapter deals with:

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what happens when you cease your business

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when your licence can be suspended or cancelled

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service of notices, and

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penalties that can apply to offences in relation to suspensions and cancellations.

4.2 INTRODUCTION

Your licence remains in force until it is cancelled. However, activities approved under your licence may be restricted if we suspend your licence. Suspension may be a temporary measure or may lead to the cancellation of your licence.

Where your licence covers more than one premises, we can also vary your licence to no longer cover particular premises if we:

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have reasonable grounds to suspend your licence in relation to those premises

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receive written notice from the licence holder requesting the variation.

We can cancel your licence if:

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you ask us to do so (for example, where you intend to cease business)

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we make a decision to do so because one or more of the following criteria are present

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you or an associate are not 'fit and proper' as an individual or company

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a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person

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a person who participates in the management or control of the premises is not a 'fit and proper' person

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you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence

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the physical security of the premises is inadequate

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the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises

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you have no market for the goods covered by the licence

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you are not keeping proper books of account for audit purposes

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you have breached a condition of your licence

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you have made a false or misleading statement to us ^[105]

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suspension is necessary for the protection of the revenue

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if you are the holder of a manufacturer licence or storage licence, suspension is necessary to ensure you comply with excise law, or

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you have not, for a period of at least 3 years, conducted any activities authorised by the licence at any premises covered by the licence.

4.3 POLICY AND PRACTICE

4.3.1 IF YOU CEASE YOUR EXCISE BUSINESS

Your licence conditions require you to notify us within 30 days if you permanently cease activities that require an excise licence. To finalise your excise obligations you must request in writing a cancellation of your licence.

Before we can cancel your licence, we must be satisfied that you no longer have any ' excisable fuel products '. To be satisfied of this we may:

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arrange a final audit of goods at premises covered by the licence, and

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work out if you are liable to pay any excise duty.

Although your licence conditions require you to notify us within 30 days of cessation of activities, you are encouraged to notify us at the earliest opportunity. This will enable us to assist you to check your records and any stock on hand prior to closure of the site for excise purposes.

If you want to sell your business with the stock included, we can coordinate your licence cancellation with the licence approval for the new owner. (This does not mean that the new owner will automatically be granted a licence). This will ensure the premises and goods are covered by a licence at all times.

If you do not intend to sell the goods with your business, you can ^[106] :

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pay any outstanding excise duty on goods held at the premises covered by the licence and then dispose of them as you wish, or

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move the goods to another licence holder's premises, provided you have permission from us to move goods to those premises.

We will cancel your licence by giving you written notice. ^[107]

4.3.2 SUSPENSION OR CANCELLATION OF A LICENCE

The difference between suspension and cancellation

Suspension of a licence is a temporary measure we may take that limits the activities you can undertake during the period of suspension. It could be followed by cancellation of the licence or revocation of the suspension. Cancellation is a permanent measure which has the effect of prohibiting you from undertaking the activities for which you were previously licensed.

Where your licence covers more than one premises, we may also suspend your licence in relation to particular premises limiting the activities you can undertake during the period of suspension at those premises. It could be followed by variation of your licence to remove particular premises prohibiting you from undertaking the activities for which you were previously licensed at those premises.

When your licence can be suspended or cancelled

We can suspend or cancel your licence if we have reasonable grounds for believing ^[108] :

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you are not 'fit and proper' as an individual or company*

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a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person*

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a person who participates in the management or control of the premises is not a 'fit and proper' person*

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you are an associate of a person or a company that is not 'fit and proper'*

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you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence*

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the physical security of the premises is inadequate*

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the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises*

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you have no market for the goods covered by the licence*

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you are not keeping proper books of account for audit purposes

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you have breached a condition of your licence

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you have made a false or misleading statement to us

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suspension is necessary for the protection of the revenue*

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if you are the holder of a manufacturer licence or storage licence, suspension is necessary to ensure that you comply with excise law, or

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you have not for a period of at least 3 years, conducted any activities authorised by the licence at any premises covered by the licence.

* For an explanation of these criteria, refer to Section 3.3.1 Licensing criteria.

The criteria which have not been the subject of previous considerations are covered below:

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You are not keeping proper books of account for audit purposes. For this criterion, we are assessing your actual record-keeping practices during the licence period and whether they are in an adequate state for an audit.

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You have breached a condition of your licence. A breach means you have not complied with a condition. In deciding whether or not to suspend we will take into account the following

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the severity of the breach

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the circumstances surrounding the breach, and

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what the condition is (that is, the risk it is addressing).

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You have made a false or misleading statement to us. In considering your initial application, the false or misleading statements we take into account are in your application. Once you have been granted a licence, we can take into account any statements (including, for example, in a return, letter or response to a question) you have made in relation to your excise activities.

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Suspension is necessary to ensure you comply with excise law. Where we consider that you are not complying with your obligations under the Excise Act, for example, if you have been manufacturing excisable fuel products in contravention of your manufacturer licence. ^[109]

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You have not for a period of at least 3 years, conducted any activities authorised by the licence at any premises covered by the licence. We will consider suspending the licence where, for example, you have not manufactured or stored excisable fuel for the previous 3 years at any premises covered by the licence and it is unlikely you will do so in the near future.

If your licence is suspended

If we believe your conduct warrants consideration of suspension of your licence or particular premises covered by your licence, we will generally advise you of our concerns prior to proceeding with suspension and provide you with an opportunity to rectify the issues identified.

If we decide to proceed with the suspension, this will be done by serving a Notice of suspension. The notice may be served on you or given to a person who appears to participate in the management or control of any of the premises covered by the licence.

A Notice of suspension will state that, if you want to stop the cancellation of your licence (or variation of your licence to no longer cover particular premises), you must provide us with a written statement, within 7 days of the notice being served, giving reasons why your licence should not be cancelled (or varied). We will include our reasons for deciding to suspend your licence or particular premises covered by your licence with the Notice of suspension.

The notice will also state when the suspension takes effect, which could be immediately.

When your licence is suspended, unless you have written permission from us, it is against the law to ^[110] :

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manufacture excisable fuel products if you are the holder of a manufacturer licence, or

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keep or store excisable fuel products at premises covered by your licence if you are the holder of a storage licence.

During the period of suspension we may give you written permission to ^[111] :

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keep or store goods at premises covered by your licence

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carry out a process at your premises, or

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move goods from your premises to another place.

As a result of a suspension, we may:

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require the owner (you or a third party) of excisable fuel products to move the goods from your premises to another place

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require payment of any costs incurred by us as a result of the suspension

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carry out a stocktake so that the total excise liability is known, and

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take control of premises covered by your licence and any excisable fuel products stored at these premises.

If we suspend your licence, we have 28 days to cancel your licence. During this period we can revoke the suspension if you satisfactorily address the issues which led to the suspension. If we revoke a licence suspension we will do so in writing. We may impose additional conditions or allow you to resume your excise activities under the existing conditions.

Where your licence covers more than one premises, the aforementioned suspension processes can be applied in the same manner to particular premises covered by the licence.

All decisions relating to the suspension of a licence or to particular premises covered by the licence are reviewable by lodging an objection.

For more information about your review rights, refer to Chapter 8 Reviews and objections.

If your licence is cancelled

We can cancel your licence or vary your licence to remove particular premises for the same reasons we can suspend your licence.

We can cancel your licence without suspending your licence first. This may occur where we consider the issues require immediate action – for example, repeated delivery of excisable fuel products without payment of required duty.

If we cancel your licence, we will serve you with a Notice of cancellation. If we cancel your licence, you are not permitted to manufacture or store excisable fuel products. You are also not permitted to move excisable fuel products without our permission.

The notice may be served on you or given to a person who appears to participate in the management or control of premises covered by the licence. We will include our reasons for deciding to cancel your licence with the Notice of cancellation.

At the same time, we will serve on the owner of the excisable fuel products (whether that is you or someone else) a notice in writing to either:

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pay the duty on the goods, or

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move the goods to another place in accordance with our permission.

This notice is served in the same manner as the Notice of cancellation.

If the owner does not comply with the notice to pay duty or move the goods, we may remove them from the owner's control. We may sell or dispose of the excisable fuel products if, after 6 months, the owner has not ^[112] :

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lodged a written claim for the goods, or

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paid the duty and other movement and storage related expenses.

If we cancel your licence, you must retain all records that you have been directed to keep, for the period you have been directed.

Where your licence covers more than one premises, the aforementioned cancellation processes can be applied to particular premises in the same manner by variation of the licence to remove those particular premises. ^[113]

If you are not satisfied with our decision to cancel your licence, vary your licence to remove particular premises or dispose of your excisable goods, you can request a review of our decision by lodging an objection. ^[114]

For more information about your review rights, refer to Chapter 8 Reviews and objections.

Applying for another licence after a licence cancellation

You can apply for another licence after you have had a licence cancelled. However, we will take the reasons for the cancellation into account when considering any new application.

4.4 PROCEDURES

4.4.1 SERVICE OF NOTICES

Notices of suspension, variation or cancellation and directions to deal with excisable fuel products will be served either ^[115] :

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personally or by post ^[116] on you, or

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personally on a person who, at the time the notice is served, appears to participate in the management or control of premises covered by the licence.

4.4.2 MORE INFORMATION

If you need more information on suspension or cancellation of a licence, contact us via:

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phone 1300 137 290

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ATO Online Services , or

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write to us at
Australian Taxation Office
PO Box 3514
ALBURY NSW 2640

We will ordinarily respond to written information requests within 28 days. If we cannot respond within 28 days, we will contact you within 14 days to obtain more information or negotiate an extended response date.

4.5 PENALTIES THAT CAN APPLY IN RELATION TO SUSPENSIONS AND CANCELLATIONS

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products when your manufacturer licence is suspended, the penalty is a maximum of 2 years in prison or the greater of 500 ' penalty units ' and 5 times the amount of duty on the excisable fuel products. ^[117]

Keep or store

If you store excisable fuel products when your storage licence is suspended, the penalty is a maximum of 2 years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. ^[118]

Where your licence covers more than one premises

Where your licence covers more than one premises, the aforementioned penalties of 500 penalty units and 5 times the amount of duty on the excisable fuel products apply if you manufacture or store excisable fuel products at particular premises in relation to which the licence is suspended. ^[119]

Remove

If your licence has been cancelled or varied to remove premises you must not, without our permission, remove excisable fuel products on which duty has not been paid. The penalty is a maximum of 2 years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. ^[120]

4.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As this Guide deals with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

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petrol

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diesel

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renewable diesel

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crude petroleum oil

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condensate

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heating oil

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kerosene

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fuel ethanol

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biodiesel

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compressed natural gas (CNG)

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liquefied natural gas (LNG), and

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liquefied petroleum gas (LPG).

Penalty units

The value of a penalty unit is contained in section 4AA of the Crimes Act 1914 , and is indexed regularly. The dollar amount of a penalty unit is available at Penalties .

4.7 LEGISLATION (quick reference guide)

In this Chapter, we have referred to the following legislation:

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Excise Act 1901

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section 26 – licensed manufacturers to manufacture in accordance with Act and licence

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section 39G – when the Collector may suspend a licence

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section 39J – method of suspension

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section 39K – activities that are prohibited during suspension

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section 39L – cancellation of licences

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section 39LA – variation of certain licences to remove premises

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section 39M – removal of goods on cancellation etc. of licence

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section 39N – removal of goods by Collector on cancellation etc. of licence.

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section 39P – service of notices

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section 39Q – review of decisions

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Excise Tariff Act 1921

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The Schedule

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Crimes Act 1914

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section 4AA – penalty units

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Amendment history

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References