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.
2 LICENSING: Applications
2.1 PURPOSE
This Chapter deals with:
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- why there is a licensing regime
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- what a licence is
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- different licence types
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- how long a licence is valid for
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- whether licences are transferable
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- disclosure of your licensing information
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- how to register for excise
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- how to apply for a licence
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- how to change your licence details, and
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- penalties that can apply to offences in relation to licences.
2.2 INTRODUCTION
2.2.1 WHY THERE IS A LICENSING REGIME
The excise duty attached to ' excisable goods ' forms a significant component of the overall value of the goods. A licensing regime helps the CEO maintain control of excisable goods and ensure the correct amount of duty is paid.
A licence enables you to manufacture or store excisable goods, or both. If you undertake these activities without a licence or contravene your licence conditions you are committing an offence and may be prosecuted.
A licence is issued to a specific entity and specifies the site where the activities may be undertaken. This may require you to have more than one licence. An excise licence may specify one or more premises and an entity may have multiple licences.
Licences can be issued to:
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- individuals
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- partnerships and companies in their own right, and
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- individuals and companies in their capacity as trustees.
There may be different licensing processes depending on the type of entity applying for the licence.
2.3 POLICY AND PRACTICE
2.3.1 TYPE OF LICENCES REQUIRED
If you are a duty-free shop operator, you will require a storage licence (with permission to sell duty-free) to store and sell ' underbond ' excisable goods.
Duty-free shops are different from other premises covered by a licence because they are allowed to display and sell goods that have not had excise paid on them. Your storage licence will specify the type of excisable goods you can store and the location. It will also specify the activities, if any, you can undertake in relation to those goods [37] , for example, sell duty-free to:
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- ' relevant travellers '
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- diplomats or consuls, or
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- sea-going vessels of the Royal Australian Navy or Australian Military Forces.
Paying duty and ' delivering goods into the Australian domestic market ', supplying ship's stores or exporting by other means are not allowed unless specifically authorised in your licence or another permission we have issued you. We will only approve these activities when there is a genuine business need, for example, supplying ship's stores in a remote location where there is no alternative source.
2.3.2 RESPONSIBILITIES OF A LICENCE HOLDER
You are responsible for the secure storage of all excisable goods held on your premises or under your control (or direction) and must keep or store excisable goods only at premises that are covered by your licence. [38]
You must be able to account for the excisable goods in your possession, custody or control to our satisfaction when requested to do so.
You may be responsible for paying an amount equal to the excise duty that would have been payable on any stolen, missing or unaccounted for underbond excisable goods. [39]
You must not move excisable goods without approval from us. This includes moving excisable goods from premises covered by your licence to any other location or for export. [40]
You are also responsible for ensuring that you comply with the Excise Act and all conditions of your licence. [41]
You must keep, retain and produce records in accordance with a ' direction under section 50 ' of the Excise Act.
We have the right to enter premises covered by your licence at any time and can examine and take account of all the goods at the premises. [42] Note: we will usually only seek to enter your premises during normal business hours.
We can stop any vehicle leaving premises covered by your licence and check that there is proper documentation for excisable goods leaving the premises. We can question the driver about any goods in the vehicle. We can direct that the vehicle be unloaded and goods taken to particular parts of the premises for further examination. We must not detain a vehicle for longer than is necessary to do the checking. [43]
We can stop and search any vehicle (not just vehicles leaving premises covered by a licence) without a warrant if we have reasonable grounds for believing that the vehicle contains excisable goods and that the vehicle has been used, is being used or will be used in the commission of an offence under the Excise Act (and certain offences in the Crimes Act 1914 (Crimes Act) [44] and Criminal Code [45] relating to accessory after the fact, attempt to commit an offence, aid and abet someone to commit an offence and conspiracy to commit an offence). [46]
We can open packages and examine, weigh, mark and seal any excisable alcohol products that are subject to ' excise control '.
The Excise Act provides that a licence holder shall [47] :
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- keep such records and furnish such returns as directed
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- keep these records for the period directed, and
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- on demand, produce those records to us.
Any such direction will be in writing and included with your licence. We can amend this direction at any time and will provide written notification of this to you.
We can inspect and take copies of any records kept as directed.
If you cease to hold an excise licence you must still keep all records of your previously licensed activities. Records must be kept for the period of time as directed.
Your excise licence does not have an expiry date. Your licence stays in force until it is cancelled either by the Collector [48] or at your request. [49]
An excise storage licence differs from a customs warehouse licence. You must hold a current section 79 [50] customs warehouse licence for each duty-free shop (which must be renewed annually by the ABF) prior to being granted a storage licence to store excisable goods with permission to sell these products duty-free.
You can also apply to have one excise licence covering more than one premises [51] or consolidate existing excise licences into one licence that covers one or more premises. [52] This does not apply to customs warehouse licences for duty-free shops. [53]
Generally, you cannot transfer your licence to another individual, business entity or premises. The proposed new licence holder must apply for a new licence. You must also request cancellation of your current licence if you are no longer carrying out an excise activity. It is important that you advise us of any change before it takes effect.
The exception to the above rule arises when a licence holder dies. If this is the case, the licence is taken to be transferred to the person's legal personal representative. This allows for the finalisation of the affairs and, unless cancelled earlier, the licence is taken to be automatically cancelled 3 months after the licence holder dies. [54]
2.3.7 DISCLOSING LICENSING INFORMATION
As well as the protection provided by the Privacy Act 1988 (Privacy Act), the tax laws have secrecy provisions about using and disclosing taxpayer information. [55] We can only look at, record, discuss or disclose information about you when it is a necessary part of our work, or where the law specifies that we may.
Subdivision 355-B of Schedule 1 to the Taxation Administration Act 1953 (TAA) allows us to record or disclose information about you in certain circumstances. For example, the Excise Act specifically allows us to disclose information about you to the ABF.
In relation to licensing information, the TAA specifically allows us to disclose information about:
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- whether another person holds a current excise licence, and
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- any conditions that apply to their licence.
The ATO is lawfully required to publish and maintain a public register on the ATO website, disclosing the name of the licence holders, their Australian Business Number (ABN) and the name of the Act under which the licence was granted. [56] This will assist business to identify entities that are licensed to manufacture and store excisable and excise equivalent goods. [57]
Information may be disclosed by us in the performance of our duties and would cover disclosing information:
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- to a person dealing or proposing to deal with another person in relation to goods subject to 'excise control', and
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- provided we are satisfied that disclosure is necessary for the purposes of ensuring the dealing or proposed dealing is in accordance with excise law.
If we decide that the disclosure is necessary, we must provide the information in writing to the person who requires it. If the matter is urgent, we may advise by phone. However, we must later confirm the information by in writing.
Anyone who receives such information should use it only for the purpose for which it was given. Any other use may be unlawful.
Note: The TAA imposes certain obligations on you concerning the on-disclosure of information that affects another person. [58] The Privacy Act imposes certain obligations on you concerning the privacy of information that you have received about an individual. Further information can be obtained from the Office of the Australian Information Commissioner .
Our decision in relation to the disclosure of protected information is not a reviewable decision. However, you have the right to make a complaint to the Commonwealth Ombudsman about a range of administrative actions we take or the Australian Information Commissioner if you think we have breached the Privacy Act in dealing with your personal information.
2.4 PROCEDURES
You must register for excise before you can be issued with a licence to store excisable alcohol products.
While it is not compulsory to provide an ABN or tax file number (TFN) for registration, it will help us to process your application.
If you need an ABN, phone 1300 657 162 for a registration pack. You can lodge your completed ABN registration form with your completed excise registration application.
If you would like to apply for a licence, you should:
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- contact us by phone on 1300 137 290 , and
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- lodge an Excise registration form together with all the required supporting documents (see below). [59]
Our staff will:
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- discuss your particular circumstances with you
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- give you advice about the appropriate licence or licences
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- explain how to apply
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- explain your ongoing obligations as a licence holder, and
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- provide you with a licence application form.
- There is no charge for an excise licence.
Before lodging your application form, make sure you have included the required supporting documents. Your application form contains information to help you work out which supporting documents you must provide. You may also need to complete other excise forms, depending upon your proposed activities.
Supporting documents include:
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- an accurate plan of the premises that clearly indicates the area for storage
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- a Fit and proper person declaration
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- an application for permission to move underbond goods
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- if requested by us, a Consent to a national criminal history check - excise.
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- lodge online ATO Online Services
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- post them to
- Excise Licensing Group
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
Where you hold an existing storage licence [61] , you can apply to vary your licence to:
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- add new premises to your existing storage licence
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- remove one or more of the premises from your licence (as long as your licence will still cover at least one premises)
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- consolidate your existing licences into one licence that covers multiple premises.
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.
2.4.3 CHANGING LICENCE DETAILS
We can amend your licence for changes that do not involve a change of entity. This includes a change of:
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- business name (that is your trading name)
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- postal address, or
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- street name or property address made by a relevant authority.
A change in composition of a partnership does not affect the continuity of that partnership. Any one or more of the partners may act on behalf of the partnership in notifying changes. [63]
You must advise us of any of these changes within 30 days. We will then provide you with an amended licence.
If you need more information on licensing matters, contact us via:
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- ATO Online Services
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- phone 1300 137 290 , 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.
2.5 PENALTIES THAT CAN APPLY IN RELATION TO LICENCES
The following are the penalties that may apply after conviction for an offence.
Keep or store without permission
If you possess or have custody or control of excisable goods without permission, the penalty is a maximum of 2 years in prison or the greater of 500 ' penalty units ' and 5 times the amount of duty that would have been payable if the goods had been entered for home consumption on the penalty day. [64]
False or misleading statements
If you make a statement to us that is false or misleading, or make an omission from a statement that makes it false or misleading, the penalty is a maximum of 50 penalty units.
However, if that false or misleading statement is in respect of duty payable on particular goods, the penalty is a maximum of 50 penalty units and twice the amount of duty payable on those goods. [65]
If you do not keep, retain and produce records in accordance with a 'direction under section 50' of the Excise Act, the penalty is a maximum of 30 penalty units.
2.6 TERMS USED
Deliver into the Australian domestic market
Deliver into the Australian domestic market [66] 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. [67]
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.
Section 7 of the Excise Act refers to the CEO as having 'general administration of this Act'. In this Guide, we will also refer to this general administration as excise control.
Goods are subject to excise control from the point of manufacture until they have been delivered into the Australian domestic market (referred also as to home consumption [68] ) or for export.
Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.
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 [69]
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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. [70]
This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, or proprietor of premises covered by a storage licence, to keep specified records, furnish specified returns, retain records for a specified period and produce those records on demand by us. The written instruction is incorporated into the licence conditions.
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.
Warehouse licence [71] has the same meaning as it has in the Customs Act which states, '"Warehouse" means a place that a person or partnership is licensed under section 79 to use for warehousing goods'. [72]
Amendment history
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References
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