Excise guidelines for the tobacco industry
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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.
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. [162] This permission may be subject to conditions.
The permission holder retains responsibility for any liability arising on the ' tobacco ' seed, plant or leaf until they are taken up into the stock of the receiving premises.
The legislation differentiates between tobacco seed, plant and leaf, all of which are not excisable goods, and manufactured tobacco products, which are excisable goods. You need permission to move tobacco seed, plant and leaf from one place to another place. [163]
Manufactured tobacco goods are deemed entered and delivered into the Australian domestic market at the time of manufacture. The manufacturer is liable for the duty at the point of manufacture which must be paid within 7 days [164] . As such manufactured tobacco goods are no longer subject to the ' CEO's ' control, and no further permissions or authorisations are required to deal with the goods.
5.3 POLICY AND PRACTICE
Depending on your circumstances, you may apply for a permission to move specified products once (single permission) or products of a particular kind on a continuing basis (continuing permission). Continuing permissions are used where you have a need to move products in a regular pattern (for example, a delivery each week to the same premises).
A single permission is used when movements are not on a continuing or regular pattern to the same premises or in some instances when we have new entrants into the excise system.
There are 4 types of movement permission available for tobacco products:
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- single movement permission (non-export) - a permission to move specified products 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 products of a kind specified from one specified place to another specified place on a continuing basis
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- single movement permission (export) - a permission to move specified products from a specified place to a place of export (effective for one movement), or
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- continuing movement permission (export) - a permission to move products of a kind specified from one specified place 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 owner' of the place covered by the licence:
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- from where the products are despatched
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- where the products are received.
You can also be granted a movement permission if you are the owner of the products even if you do not hold an excise licence.
5.3.3 WHAT IS INCLUDED IN A MOVEMENT PERMISSION
Each movement permission we approve contains 3 parts.
The permission specifies:
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- the permission holder, and
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- a general description of the products that can be moved under the permission.
The type of products may be expressed generally (for example, ' excise controlled goods', or 'excise controlled tobacco products') or specifically, by description.
A single movement permission will specify the kind and quantity of the products that can be moved, for example, 20 (bales) × 100kg = 2000kg cured leaf tobacco.
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 are considered necessary to do that. [165]
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 products
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- a statement that the products are 'controlled' products under the Excise Act, and
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- any other information necessary to permit the products to be dealt with at the destination.
This document should be communicated to the receiving premises within 24 hours of the products being despatched.
A condition can also be included that limits the volume of products and type of products that can be moved within a specific period of time, or at any one time, although this detail can also be included in the schedule.
A condition that is imposed by the law on movement permissions for tobacco leaf requires each tobacco bale to have a tobacco bale label attached. The tobacco bale label must remain attached to the bale while the bale is not on premises specified in a manufacturer, producer or dealer licence. Tobacco bale labels are available from us and serve to uniquely identify each tobacco bale. [166]
The requirement for a tobacco bale label can be waived but we need to give you specific written permission. This would be considered where you can demonstrate reasons why the tobacco leaf cannot be put into bales.
The schedule specifies:
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- the premises 'from' which the products can be removed
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- the premises or port (air or ship) 'to' which the products can be moved
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- the quantity of products that can be moved, and
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- for single movement permissions, the period or dates within which the products may be moved.
5.3.4 RECEIVING PREMISES AND LICENCES
Generally, the receiving premises should be covered by a licence. However, we may authorise movement of products to a 'specified place' not covered by a licence, for example, a waste destruction facility. [167]
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. [168]
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 or any condition included in the movement permission. 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 may 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 if the products were manufactured into excisable tobacco 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 products to be lost or diverted into home consumption (that is, domestic market 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 controlled products covered by the permission.
The decision to require a security is not reviewable under the objection process.
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 products in accordance with the schedule. You will need to keep appropriate records to track the movement of your products.
Where you have had possession, custody or control of products we may request you (the permission holder) to account for the products. If you are able to demonstrate that the products 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 movements of products from and to your premises or under a movement permission issued to you.
If you cannot satisfactorily account for the tobacco leaf, we may demand an amount equal to the duty that would have been payable if the leaf had been manufactured into excisable goods classified to subitem 5.5 of the Schedule and entered for home consumption on the day of the demand. [169]
The permission holder is accountable for the products:
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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 or the place for export.
The requirement to keep the products safely and to satisfactorily account for them when requested transfers to the receiving premises if the conditions of the movement permission are met and the products are taken up into the records of the receiver.
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. You will not be permitted to move the products from the place nominated in the application without our permission.
5.3.9 REVOCATION OR CANCELLATION OF A MOVEMENT PERMISSION
A continuing permission remains in effect until it is cancelled. [170]
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
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- you are not complying with the requirements (including the conditions) of the permission, or
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- we have cancelled the licence of the receiving or despatching premises.
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
To apply for a movement permission, you should contact us.
If you do not have control of the proposed receiving premises, you will be required to obtain a letter from the operator of these premises stating that they will accept responsibility for the controlled products when received. The application forms contain details of the statement required from the operator of the receiving premises.
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 details of the 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 controlled products 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 products outside your current permission.
If you need more information on movement permissions, 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.
5.5 PENALTIES THAT CAN APPLY IN RELATION TO MOVEMENT PERMISSIONS
If you intentionally move tobacco seed or plant without a movement permission, the penalty is a maximum of 2 years in prison or up to 500 ' penalty units '. [171]
If you intentionally move tobacco leaf without a movement 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 tobacco leaf had been manufactured into excisable goods. [172]
If you intentionally move tobacco seed or plant contrary to your movement permission, the penalty is a maximum of 2 years in prison or 500 penalty units. [173]
If you intentionally move tobacco leaf contrary to your movement 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 tobacco leaf had been manufactured into excisable goods. [174]
A strict liability penalty of 100 units can apply to all offences included in this section. [175]
5.6 TERMS USED
CEO means the Commissioner of Taxation.
Tobacco goods are no longer subject to excise control from the point of manufacture when they have been deemed entered and delivered into home consumption. Duty is payable by the manufacturer at the time the goods are manufactured.
Tobacco seed, plant and leaf are subject to excise control and cannot be moved, altered or interfered with except as authorised by the Excise Act.
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.
This Guide deals with both controlled tobacco products (tobacco seed, plant and leaf) and excisable tobacco goods.
The term excisable tobacco goods include:
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- pouch tobacco
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- cigars
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- cigarettes
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- shisha or molasses tobacco, and
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- snuff.
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 .
This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, licensed producer, licensed dealer, or proprietor of premises covered by an excise licence, to keep specified records, furnish specified returns, retain records for a specified period and produce those records on demand by us.
Tobacco means tobacco leaf subjected to any process other than curing the leaf as stripped from the plant. [176] Tobacco includes any thing (including moisture) added to the tobacco leaf during manufacturing or processing. [177]
This means that until tobacco leaf is subjected to processes after curing it is not excisable. However tobacco seed and plant is a controlled substance and as such you need to hold an excise producer or dealer licence to be in possession of these goods.
The species of the Nicotiana genus that are generally used for smoking, chewing or snuff are considered to produce tobacco leaf. Those species are currently Nicotiana tabacum, Nicotiana rusticum and Nicotiana sylvestris.
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 home consumption and goods moving between premises covered by a licence under a movement permission.
Amendment history
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References
| Date: | Version: | |
| 1 July 2006 | Updated document | |
| 1 September 2014 | Updated document | |
| 1 April 2015 | Updated document | |
| 17 December 2021 | Updated document | |
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