Excise guidelines for duty-free shops
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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), or
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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 [108]
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- suspension is necessary for the protection of the revenue
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- 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. [109]
Before we can cancel your licence, we must be satisfied that you no longer have any ' excisable goods '. 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 [110] :
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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. [111]
If you do not comply with the requirements of the notice, the goods will be sold or otherwise disposed of. [112]
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 [113] :
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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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- 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.
* 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:
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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 to represent your business activity.
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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
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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 not been complying with a condition in respect of your permission. [114]
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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 stored excisable goods 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 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 your 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 [115] , unless you have written permission from us, it is against the law to keep or store excisable goods at premises covered by your licence.
During the period of suspension, we may give you written permission to [116] :
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- keep or store excisable 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 goods to move the goods from premises covered by your licence 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 goods 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 suspension processes outlined above 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.
We can cancel your licence or vary your licence to remove particular premises for the same reasons we can suspend your licence.
If we cancel your licence, we will serve you with a Notice of cancellation. If we cancel your licence, you are not permitted to store excisable goods. You are also not permitted to move excisable goods without our permission.
The Notice of cancellation may be served on you or given to a person who appears to participate in the management or control of premises covered by your licence. We will include our reasons for deciding to cancel your licence with the Notice of cancellation.
At the same time, we will serve the owner of the excisable goods (whether that is you or someone else) 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.
If the owner does not comply with the direction 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 goods if, after 6 months, the owner has not [117] :
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- lodged a written claim for the goods, and
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- paid the duty and other movement and storage related expenses.
Where your licence covers more than one premises, the cancellation processes outlined above can be applied to particular premises in the same manner by variation of the licence to remove those particular premises. [118]
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. [119]
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
Notices of suspension, variation or cancellation and directions to deal with excisable goods will be served either [120] :
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- personally or by post [121] 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.
If you need more information on excise, as it relates to duty-free shops, contact us via ATO Online Services or the other options as listed on Contact us about excisable alcohol .
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.
If you store excisable goods 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 goods. [122]
Where your licence covers more than one premises
Where your licence covers more than one premises, the penalties outlined above of 500 penalty units and 5 times the amount of duty on the excisable fuel products apply if you keep or store excisable goods at particular premises in relation to which the licence is suspended. [123]
If your licence has been cancelled or varied to remove premises, you must not, without our permission, remove excisable goods 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 goods. [124]
4.6 TERMS USED
Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are listed in the Schedule, and manufactured or produced in Australia.
For operators of duty-free shops, this will include:
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- alcohol goods that are produced or manufactured in Australia and are subject to excise, and
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- imported alcohol goods that have undergone a process of manufacture or production in Australia - for example, high-strength imported whisky which has been reduced by adding water (in Australia) before it is bottled, constitutes manufacture or production for excise purposes. Vodka imported in bulk and repackaged in Australia, does not constitute manufacture for excise purposes.
This will not include:
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- other imported alcohol goods (because these goods are subject to customs duty)
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- wine (which is generally subject to wine equalisation tax), and
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- cigarettes and other tobacco goods as there is currently no licensed manufacture of tobacco in Australia.
Examples of excisable goods include Australian-made:
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- beer
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- spirits, and
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- pre-mixed drinks known as ready-to-drink beverages.
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 .
Amendment history
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| Throughout | Content checked for technical accuracy and currency.
Updated in line with current ATO style and accessibility requirements. |
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References
| Date: | Version: | |
| 1 July 2006 | Updated document | |
| 1 July 2015 | Updated document | |
| 7 January 2022 | Updated document | |
| 1 July 2024 | Updated document | |
| You are here | 1 October 2025 | Current document |