Excise guidelines for the tobacco industry

  • This document has changed over time. View its history.

Terms we use in these Guidelines


CEO means the Commissioner of Taxation

Deliver into home consumption

Deliver into home consumption [248] is the term used in these Guidelines and certain parts of the Excise Act to describe when excisable tobacco goods are released into the Australian domestic market for consumption. The term used in the legislation is 'deliver for home consumption' or 'deliver into home consumption'.

Normally this will be by delivering the goods away from licensed premises but includes consuming or using those goods yourself, or selling goods to your staff at your licensed premises.

The term 'home consumption' is not defined in the Excise Act. However, there are several cases [249] where issues closely related to it are considered, with the most appropriate one being Caltex Australia Petroleum Pty Ltd v Commissioner of Taxation [2008] FCA 1951. In this case, held in the Victorian Federal Court, one of the questions Sunberg J dealt with was 'whether the residual oils were '"delivered for home consumption" by Caltex for the purposes of ss 61, 61C and 59 of the Excise Act?'.

The findings of the Court on this particular issue were the:

  • The taxpayer's liability for excise duty depended on whether it could be said that the taxpayer 'delivered' the residual oils for, or into, home consumption as that concept appears in the Excise Act.
  • The Court found that the taxpayer delivered the residual oils for home consumption based on the finding that the Excise Act does not refer to delivery to a person but adopts the more ample language of delivery for or into home consumption.
  • The Court held that the language of the Excise Act is sufficiently broad to apply to the consumption by a manufacturer at its own premises. The Court refuted the contention that 'delivery' required the physical removal of goods from one place to another, stating that in that scenario it would give the concept of delivery for home consumption a restricted meaning not warranted either by the breadth of the language used, or the purpose of the legislation.
  • The conclusion drawn from these findings and those in the Southern Shipping case is that 'home consumption' refers to the destination of goods as being within Australia (as opposed to export) and that the goods did not need to be physically delivered from a premises but would include goods consumed within the premises.

Excise control

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.

Excise return

An excise return [250] is the document that you use to advise us the volume of excisable tobacco goods that you have manufactured during the seven-day tobacco excise period designated on your licence.

Excisable tobacco 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.

These Guidelines deal with both controlled tobacco products (tobacco seed, plant and leaf) and excisable tobacco goods.

The term 'excisable tobacco goods include:

  • pouch tobacco
  • cigars
  • cigarettes
  • shisha/molasses tobacco, and
  • snuff.

Penalty units

The current value of a penalty unit is specified in section 4AA of the Crimes Act.


A remission of excise duty extinguishes the liability for duty that was created at the point of manufacture, in prescribed circumstances.

For more information about remissions see Chapter 7 - Remissions, refunds, drawbacks and exemptions.

Section 50 direction

This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, licensed producer, licensed dealer, or proprietor of licensed premises, 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. [251] Tobacco includes any thing (including moisture) added to the tobacco leaf during manufacturing or processing. [252]

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 licensed premises under a movement permission.

Latest update

December 2021

SectionChanges and updates
ThroughoutThis chapter was updated to take into account law changes that impacted the tobacco industry, which repealed provisions allowing for the movement and storage of excisable tobacco goods on which duty has not yet been paid. The update also reflects the current duty rate and replace references from the old Business Portal to the new Online Services for Business.

Updated to new format and style including footnotes.

Details of previous updates are available through the versions linked to in the table below.


You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Excise guidelines for the tobacco industry
  Date: Version:
  1 July 2006 Original document
  1 September 2014 Updated document
  1 April 2015 Updated document
You are here 17 December 2021 Current document

View full documentView full documentBack to top