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.
5 MOVEMENT PERMISSIONS
5.1 PURPOSE
This Chapter deals with:
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- why you need a movement permission
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- different movement permission types
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- whether you can get a movement permission
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- what is included in a movement permission
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- whether the receiving premises have to be covered by a licence
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- whether you will need to pay a security
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- what happens when your movement permission is granted
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- your responsibilities
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- what happens if your application for a movement permission is not approved
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- when and how a movement permission can be revoked or cancelled
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- how to apply for a movement permission
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- how to amend a continuing movement permission, and
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- penalties that can apply to offences in relation to movement permissions.
5.2 INTRODUCTION
Under the excise system, control of goods from the time of creation to the point of authorised ' delivery of the goods into the Australian domestic market ', or export, lies with the Commissioner. To maintain this control, the Excise Act requires that goods subject to control are not to be moved without permission. [125]
We refer to this form of permission as a movement permission. It is a permission we provide in writing that authorises you to move specified goods from one specified place to another specified place without excise duty being payable. [126] This permission may be subject to conditions.
The permission holder retains responsibility for any excise liability arising on the ' Excisable goods ' until they are taken up into the stock of the new premises.
5.3 POLICY AND PRACTICE
Depending on your circumstances, you may apply for a permission to move specified excisable goods once (single permission) or excisable goods of a particular kind on a continuing basis (continuing permission). Continuing permissions are used where you have a need to move excisable goods in a regular pattern (for example, a delivery each week to the same premises). A single permission is used when movements are not to a continuing or regular pattern to the same premises.
There are 5 types of movement permission:
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- single movement permission (non-export) a permission to move specified excisable goods from one specified place to another specified place (effective for one movement)
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- continuing movement permission (non-export) a permission to move excisable goods of a kind specified from one specified place to another specified place on a continuing basis
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- general movement permission a permission to move excisable fuel products of a kind from any premises covered by your licence to any other premises covered by a licence which are authorised to keep those goods, on a continuing basis
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- single movement permission (export) a permission to move specified excisable goods to a place of export (effective for one movement), or
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- continuing movement permission (export) a permission to move excisable goods of a kind specified to a place of export on a continuing basis.
5.3.2 OBTAINING A MOVEMENT PERMISSION
You can be granted a movement permission if you are the licence holder of:
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- the place covered by a licence from where the goods are despatched, or
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- the place covered by a licence where the goods are received.
You can also be granted a movement permission if you are the owner of the goods even if you do not hold an excise licence.
A general movement permission can only be granted to the holder of an excise licence to despatch excisable products from premises covered by that licence. If you are granted a licence that covers more than one premises, you may also receive a general movement permission by default.
5.3.3 WHAT IS INCLUDED IN A MOVEMENT PERMISSION
Each movement permission we approve contains 3 parts:
The permission specifies the:
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- permission holder.
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- goods by tariff item or general description that can be moved under the permission.
The type of goods may be expressed generally (for example 'excisable goods', or 'excisable alcohol products') or specifically, by tariff item number or description.
A single movement permission will specify the kind and quantity of the goods that can be moved, for example, 12 (cartons) × 12 (bottles) × 1L whisky @ 40% alcohol by volume = 57.6 litres of alcohol (Lals) classified to excise tariff item 3.2.
Movement permissions can be subject to conditions that are necessary to protect the revenue or ensure compliance with the Excise Act. In general, the conditions listed below are considered necessary to do that.
As a standard condition, you must provide to both the despatching and receiving premises a consecutively numbered document with each movement of goods that specifies:
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- the despatching premises and destination
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- the date of despatch
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- the number and type of packages
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- a description of the goods
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- a statement that the goods are ' underbond ', and
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- any other information necessary to permit the goods to be dealt with at the destination.
A condition can also have a restriction limiting the volume of goods that can be moved within a specific period of time, or at any one time.
This specifies:
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- the premises from which the goods can be removed
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- the premises to which the goods can be moved
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- the goods by tariff item that can be moved under the permission, and
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- for single movement permissions, the period or dates in which the goods may be moved.
* Note that general movement permissions will not contain a schedule, as the permission allows the permission holder to move excisable alcohol products of a kind from any premises covered by their licence to any other premises authorised to keep those kinds of goods.
5.3.4 RECEIVING PREMISES LICENCES
Generally, the receiving premises should be covered by a licence. However, we may authorise underbond movement of goods to a 'specified place' not covered by a licence, for example, a waste destruction facility.
For a general movement permission, the receiving premises must be covered by a licence and be authorised to keep those kinds of goods.
Prior to granting a movement permission, we may also require you to provide a security to protect the revenue or ensure compliance with the Excise Act. Even if we don't require a security prior to the granting of the movement permission, we may ask for a security at a later time. We can also ask you to increase the value of any security you may already have given. [127]
A security can be a bond, guarantee, cash deposit or similar financial product for an amount of money which may be forfeited if there is a failure to comply with the Excise Act. It is not necessary for a liability to arise as a result of the failure to comply, for the security to be forfeited. There is no statutory limit to the amount of a security but the amount is generally set by reference to the level of revenue at risk.
As part of assessing your application for a movement permission, we will decide whether you must provide a security. We will take into account:
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- whether you currently hold an excise licence
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- whether the despatching and receiving premises are covered by a licence
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- the type of goods involved
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- the amount of the liability on the goods
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- the tax compliance record of the
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- applicant for the permission
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- owner of the despatching premises
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- owner of the receiving premises, and
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- the susceptibility of the goods to be lost or diverted into home consumption without the payment of duty.
We review securities linked to continuous movement permissions every 3 years, at which time they may be extended, revised or cancelled. Compliance with a single movement permission is assessed on completion of the movement of the excisable goods covered by the permission.
The decision to require a security is not a reviewable decision under the objection process. However, there may be other avenues for review, for example, you may seek an informal review of our decision.
5.3.6 ONCE A MOVEMENT PERMISSION IS GRANTED
When your movement permission is granted, it will be sent to you. You can then move your goods in accordance with the schedule. You will need to keep appropriate records to track the movement of your goods.
Where you have had possession, custody or control of goods we may request you (the permission holder) to account for the goods. If you are able to demonstrate that the goods have been lawfully moved under a movement permission, this will be considered a satisfactory accounting. It is important that you keep good records of any movement of goods both to and from your premises.
If you cannot satisfactorily account for the goods or you have failed to keep them safely, we may demand an amount equal to the duty that would have been payable on the goods. [128]
The permission holder is accountable for the goods:
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- from the time they are removed from the despatching premises, and
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- until they are delivered to the receiving premises.
Accountability then transfers to the receiving premises. If the permission holder is the owner of the receiving premises, transfer of accountability occurs when the goods leave the despatching premises. If the permission holder owns the goods but is not licensed, they would generally be accountable for the goods from the time they are removed from the despatching premises until they are delivered to the receiving premises and taken up into stock.
If there is a discrepancy between the quantity shown in the delivery documentation and the physical quantity received you should contact us.
5.3.8 IF AN APPLICATION IS NOT APPROVED
If we do not approve your application for a movement permission, or to amend your existing movement permission, we will notify you in writing. If you are not satisfied with our decision, you can ask us to review it. You will not be able to move the goods to the place nominated in the application.
5.3.9 REVOCATION OR CANCELLATION OF A MOVEMENT PERMISSION
A continuing permission remains in effect until it is revoked or cancelled. [129]
We can cancel your movement permission if:
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- you ask us to do so
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- we consider that there is a risk to the revenue, or
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- we have cancelled the licence of the receiving or despatching premises and this is the only premises listed on the permission.
If we decide to cancel your movement permission, we will notify you in writing. The cancellation will take effect from the time:
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- you are served with the cancellation notice, or
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- specified on the cancellation notice.
5.4 PROCEDURES
5.4.1 APPLYING FOR A MOVEMENT PERMISSION
Relevant forms to apply for a movement permission are available at Permission to move excise alcohol products .
If you do not have control of the proposed receiving premises (either covered or not covered by a licence), we require you to obtain a letter from the operator of these premises stating that they will accept responsibility for the underbond goods when received. The application forms contain details of the statement required from the operator of the receiving premises.
If you are granted a licence that covers more than one premises, or your existing licence is varied to cover more than one premises you may also receive a general movement permission by default with your licence.
5.4.2 AMENDING A CONTINUING MOVEMENT PERMISSION
If you wish to amend your existing continuing movement permission (for example, change the schedule of receiving premises), you must send us either:
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- a new application form with the amending details, or
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- a letter including the permission number and necessary changes.
If you wish to add new receiving premises to your existing permission, you must also provide us with a letter from the operator of the receiving premises accepting responsibility for the underbond goods when received. The application form contains details of the statement required from an operator of the receiving premises.
We will consider your request and send you a new or amended permission if approved. In the meantime you cannot move goods outside your current permission.
If you need more information on movement permissions contact us as follows:
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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.
5.5 PENALTIES THAT CAN APPLY IN RELATION TO MOVEMENT PERMISSIONS
If you move excisable goods without a movement permission [130] or contrary to your movement permission [131] , 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.
5.6 TERMS USED
Deliver into the Australian domestic market
Deliver into the Australian domestic market [132] is the term we use in this Guide for when excisable goods are released into domestic consumption. The term used in the legislation is 'deliver for home consumption'.
Normally, this will be by delivering the goods away from premises covered by a licence but includes using those goods yourself (for example, sales to staff).
The term 'home consumption' is not defined in the Excise Act and there is no definitive case law that looks at the issue in question. However, there are several cases where issues closely related to it are considered. [133]
The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.
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 .
A relevant traveller is:
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- for outwards duty-free shop purposes a person who intends to make an international flight or international voyage, whether as a passenger on, or as a member of the crew (or the pilot or master) of an aircraft or ship [134]
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- for inwards duty-free shop purposes a person who has arrived in Australia on an international flight, whether as a passenger on, or as a member of the crew (or the pilot) of, an aircraft and has not been questioned, for the purposes of the Customs Act 1901, by an officer of Customs, in respect of goods carried on that flight. [135]
This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into the Australian domestic market and goods moving between premises under a movement permission.
Amendment history
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References
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