Excise guidelines for the tobacco industry
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06 - PAYMENT OF DUTY
This chapter deals with:
- when duty is payable
- when duty is payable under periodic settlement
- when duty is payable under prepayment of excise duty
- when duty is not payable
- how to work out the amount of duty you're liable to pay, including tariff proposals and quotas
- whether you have to account for tobacco leaf and excisable tobacco products
- how to get a Periodic settlement permission (PSP)
- what your PSP will include
- what to do to deliver tobacco products into home consumption
- how to lodge excise returns and pay excise duty
- what to do if you have made an error on your excise return, and
- penalties that can apply to offences in relation to payment of duty.
Excise duty is imposed at the time excisable tobacco products are manufactured.  However, the duty is not required to be paid at the time of manufacture.
This chapter focuses on the payment of duty and the factors that influence when and how much duty is payable.
To ensure the duty is ultimately acquitted excisable tobacco products remain subject to our control until they are delivered :
- into home consumption (the Australian domestic market), or
- for export to a place outside Australia 
The liability for duty, imposed at the time of manufacture, can be acquitted by:
- payment of the duty
- export of the goods
- remission, or
- use in the manufacture of other excisable goods.
When the liability for duty becomes payable depends on how authority is given to deliver the excisable tobacco products into home consumption. Authority to deliver excisable tobacco products into home consumption can be given on a continuing basis, known as a periodic settlement permission (PSP),  or on an ad hoc basis, known as prepayment of duty. 
Under a PSP the duty is paid after the excisable tobacco products are delivered into home consumption.
A PSP allows you to deliver specified goods without an entry for home consumption, subject to various conditions. In particular, you must report all the deliveries made under the PSP and pay the duty on a periodic basis after the goods have been delivered into home consumption.  Periodic settlement is the most common arrangement for the delivery of goods into home consumption.
You may apply for a PSP that covers any recurring seven-day reporting period. You may specify in your application the 7 day period you wish to use, for example, Wednesday to Tuesday. The application must be made on the approved form.
You may apply for a monthly PSP if you are either:
- a small business entity; or
- included in a particular class of business or you deliver goods that are of a particular kind for example crude oil or condensate.
The class of business or particular kind of goods must be prescribed in the Excise Regulation 2015.
A 'small business entity' is a business with an aggregated turnover for the previous year of less than $2 million or is likely to have an aggregated turnover for the current year of less than $2 million. 
A PSP is given in writing and includes:
- your name as the holder of the PSP
- the kind of goods to which the PSP applies
- the place from which the goods may be delivered
- the start date of the PSP and whether it is for a seven-day or monthly period; and
- any special requirements of the periodic settlement.
In considering your application for a PSP we will take into account various factors including compliance with all laws administered by the Commissioner of Taxation and the protection of the revenue. This includes whether you have complied with the requirements of any previous permission you have been given. If we refuse to give a PSP we will issue you a notice in writing setting out the reasons for the refusal.
A decision we make in relation to the period of a PSP or any condition for a PSP is a reviewable decision. 
For information about your review rights refer to C hapter 8 - Reviews and objections .
If you have a seven-day PSP for tobacco products you must:
- lodge an excise return, on the due date specified in your PSP. The return details the goods you have delivered into home consumption during the settlement period, and
- pay the duty, on the first business day following the end of the seven-day period, on the goods you have delivered within the settlement period. 
A 'business day' is a day that is not a Saturday or Sunday or a public holiday in the place where you lodge your return.
If you have a monthly PSP the same requirements apply however you must give your return and pay any excise duty on or before the 21 st day of the month following the end of the monthly period.
We may also determine a different PSP period if:
- you do not have any excise duty to pay, or
- you are a small business and have a PSP for a monthly period and have advised us in writing that the business has ceased to be a small business, or
- the business is included in a particular class of business and has a PSP for a monthly period and has advised us in writing that the business has ceased to be included in the class.
The class of business must be prescribed in the Excise Regulation 2015.
If we determine a different PSP period we will advise you in writing that your PSP is revoked from the day specified in the notice. We will give you another PSP for a seven-day period.
If you advise us in writing that you wish to change the period of your PSP, we may, in writing, revoke your current PSP and give you another permission for the preferred period. We will notify you of the day the change comes into effect
You do not need to have an excise licence to have a PSP.
Buy Me Pty Ltd does not hold an excise licence. A licensed manufacturer manufactures excisable tobacco products for Buy Me under contract. Under the terms of the contract, Buy Me has title to the goods from the time of manufacture and will pay the excise duty.
Buy Me may be granted a PSP.
The PSP is for the period Monday to Sunday. Therefore, Buy Me is able to arrange delivery of excisable tobacco products into home consumption and defer payment of excise duty, on those goods, until after the end of period. On the first working day after the end of the period (i.e. Monday, unless it is a public holiday in which case it will be due on Tuesday) Buy Me must lodge an excise return for any excisable tobacco products delivered during the period and pay the excise duty owing on those goods. We will send Buy Me written confirmation, after the excise return has been processed.
Under prepayment, the duty is paid before the excisable tobacco products are delivered into home consumption.
If you do not hold a PSP, you must receive a Delivery authority from us before you are allowed to deliver the excisable tobacco products into home consumption. We require you to pay any applicable duty before we give you a Delivery authority . To request a Delivery authority you need to lodge an excise return (NAT4285).
That is, you must:
You must not deliver excisable tobacco products into home consumption before receiving the Delivery authority .
There are circumstances in which no duty will be payable. These include where:
- goods are exported
- a remission circumstance applies, or
- excisable tobacco products that are subject to our control are used in the manufacture of other excisable tobacco products.
To work out how much duty you need to pay you will need to know the:
- tariff classification of the excisable tobacco products
- quantity of the excisable tobacco products you deliver into home consumption, and
- rate of duty on the excisable tobacco products.
Classification of excisable tobacco products
The Schedule to the Excise Tariff Act 1921 (the Schedule) lists those goods that, if manufactured in Australia, are subject to excise. The table also contains the rate of duty applicable to the goods. For the excisable tobacco products the relevant part of the table is as follows:
Description of goods
Rate of Duty
Tobacco, cigars, cigarettes and snuff
In stick form not exceeding in weight 0.8 grams per stick actual tobacco content
*excise duty rate per stick
*excise duty rate per kilogram of tobacco content
* For the current rates of duty, refer to the Schedule under Excise Tariff Working Pages on our website. Use the following link: Excise tariff working pages
Tobacco, cigars and cigarettes are all classified to item 5 but only cigars and cigarettes are in stick form so, if the individual sticks do not exceed 0.8 grams in weight of tobacco (i.e. not including filters or paper), they are classified to subitem 5.1. Products such as cigars and cigarettes with more than 0.8 grams of tobacco, pipe tobacco, ready rubbed tobacco, molasses tobacco and snuff are classified to subitem 5.5.
Although snuff is listed in the Schedule, there is currently a permanent ban on its supply, along with chewing tobacco, under subsection 65C(7) of the Trade Practices Act 1974
Quantity of excisable tobacco products
Duty for excisable tobacco products is levied on the quantity of the goods themselves.
Tobacco quantity is measured in sticks (e.g. cigarettes) or kilograms of tobacco content which includes anything (including moisture and other additives) added to the tobacco leaf during manufacturing or processing. This includes such things as molasses added to tobacco for use in a hookah pipe. The molasses would be included when determining the quantity of tobacco. 
When calculating the quantity of tobacco content in kilograms you should calculate to two decimal places.
Rate of duty on excisable tobacco products
The rate of duty is set in the table in the Schedule. The rates of duty on excisable tobacco products are subject to change. They are indexed twice a year in accordance with increases in the AWOTE (average weekly ordinary time earnings) figures published bi-annually by the ABS (Australian Bureau of Statistics) in March and September each year.  They can also be subject to other changes resulting from government policy.
For ease of reference we provide a 'working tariff', incorporating indexation changes, on our website. Use the following link: Excise tariff working pages
The rate of duty you use is the rate contained in the working tariff for the subitem. It will also depend on whether you have a PSP. If you do it is the rate applicable at the time you deliver the excisable tobacco products into home consumption. If you do not have a PSP, then it is the rate applicable at the time you make the pre-payment. 
When goods are delivered into home consumption under a PSP, the rate of duty that applies is the rate in force at the time the goods are delivered.
On 10 April 2015 a manufacturer delivers cigarettes under its PSP.
The cigarettes are classified to subitem 5.1 of the Excise tariff.
The rate of duty that applies is the rate in force on 10 August 2014 - $0.47008 per stick, even though the duty will not be paid until the end of the settlement period.
When goods are delivered into home consumption under a prepayment, the rate that applies is the rate in force at the time payment is made.
On 1 February 2015 a manufacturer that does not hold a PSP prepays duty for the delivery of cigarettes. The cigarettes are delivered on 10 March 2015.
The cigarettes are classified to subitem 5.1 of the Excise tariff.
The rate of duty that applies is the rate in force on 1 February 2014 - $0.46268 per stick.
The amount of duty payable is then calculated by multiplying the quantity of excisable tobacco products by the applicable rate of duty.
10,000 cigarettes are delivered into home consumption on 4 March 2015 under a PSP.
The cigarettes are classified to subitem 5.1 of the Excise tariff and have a duty rate of $0.47008 per stick.
Therefore, the duty payable is 10,000 sticks x $0. 47008 = $4700.80
If you have delivered (or intend to deliver under pre-payment) cigarettes classified to subitem 5.1 and pouch tobacco classified to subitem 5.5 then you need to add more than one line onto the excise return and then calculate the total duty liability for both lines.
What happens if the rate changes during my settlement period?
If the rates of duty change within your settlement period, you may lodge two excise returns or, alternatively, include separate lines for the same product on one return; that is:
- one return or line for goods delivered under the old rates, and
- one return or line for goods delivered under the new rates.
The rate of duty for tobacco in stick form not exceeding 0.8 g per stick actual tobacco content increased on and from 1 March 2014 (a Saturday) from $0.40197 to $0.40639 per stick.
Sovereign Tobacco holds an excise storage licence and a PSP specifying a weekly settlement period commencing Monday.
Sovereign Tobacco delivers into home consumption 750,000 cigarettes on Friday 28 February and 3,000,000 cigarettes on Saturday1 March.
In its excise return for Monday 3 March, Sovereign Tobacco uses separate line entries for product delivered at the old rate and at the new rate:
How can the rate change?
In addition to AWOTE increases, as described above, the applicable rate of excise duty can also be affected by:
- changes to the Excise Tariff Act (including tariff proposals), or
Changes to the Excise Tariff Act
Where the Government decides to change the rate of excise applying to certain excisable goods, or to start applying excise to certain goods or stop applying excise to certain goods this requires an amendment to the Excise Tariff Act. The Government normally notifies the intention to do this with a tariff proposal.
Tariff proposals are a means of changing the Excise Tariff (rates can be adjusted up or down; products can be added or removed) so that it is effective from the time it is proposed rather than after the enactment of an Excise Tariff Amendment Act. Most of the processes relate to Parliamentary procedures however there are specific provisions in the Excise Act that provide for the making of tariff proposals when Parliament is not sitting.
Effectively changes to the Excise Tariff can be notified in the Parliament or, if the Parliament is not sitting, by Notice in the Gazette. We then apply the proposal as if it is law.
The tariff proposal is required to be validated by an Act within 12 months giving retrospective effect to the date of the proposal.
You cannot commence proceedings against us for any action taken to collect the amount set by the tariff proposal during the periods specified in section 114 of the Excise Act. 
Effectively this means you need to pay in line with a tariff proposal. Any increases in rates or introduction of new products through a tariff proposal technically does not impose excise but we will protect the revenue by collecting amounts in line with the proposal.
If an amending Act validating the changes outlined within the tariff proposal is not passed within the prescribed periods, then any additional amounts paid will be refunded to you.
The Commissioner has the discretion to declare that a period is a declared period during which quotas can be imposed. During a declared period, the Commissioner has the discretion to make a quota order that specifies the amount of excisable goods that a person may enter for home consumption at the prevailing rate of duty. If a person exceeds their quota amount during a declared period, the duty rate applicable to the excess is the rate in force on the day after the end of the declared period.  If the excise rate increases, they become liable to pay the increased rate for the goods that are in excess of their quota amount (excess goods).
Where we believe that persons are anticipating an increase in the rate of duty, and as a result the clearances of excisable tobacco products in a particular period is likely to be greater than it otherwise would be, we will publish a notice in the Commonwealth Gazette . This notice will state that a particular period is a 'declared period'.  Use this link to access PSLA - 2012/3 The ATO role in determining and applying quotas under the Excise Act 1901
The 'declared period' is the period during which quotas will operate. To establish what your quota is we will consider the amounts of your past deliveries. 
Once we have established your quota we will give you a written quota order that specifies the maximum level (which can be nil)  of excisable tobacco products that you can deliver into home consumption at the applicable excise rate in force during the declared period.
If, at any time during the declared period, you exceed your quota you are required to pay the duty on the excess goods at the existing rate.
At the end of the declared period we will reconcile your deliveries with your quota. If you delivered into home consumption more than your quota, then the duty for the amount in excess of the quota is calculated at the rate in force the day after the declared period ends. Therefore, if the rate has gone up, you will pay the higher rate of duty on the amount in excess of your quota.
We can vary or revoke a quota order any time before the end of the declared period or 60 days after the making of the quota order whichever occurs last.
If you dispute: 
- the amount of duty
- the rate of duty, or
- the liability of goods to duty (for example, whether the goods are excisable),
You may deposit with us the amount of duty demanded.
The deposit of this duty is to be made on an excise return. The excise return should be accompanied by a letter which sets out the details of the dispute. Upon receipt of the amount deposited we will authorise delivery of the goods. You have 6 months after making the deposit to commence court action. If that action is decided in your favour we are obliged to refund you the deposit along with interest of 5% p.a. If the action is not commenced within 6 months or the court does not find in your favour the amount deposited is taken to be the correct amount of duty.
However, you may not commence court action if you have a taxation objection under Part IVC of the Taxation Administration Act 1953 against a private ruling and the matter of the objections:
- relates to the amount or rate of duty, or
- the liability of the goods to duty, and
- the matter of the objection is also in dispute 
For more information on private rulings see section 8.5.1 - Private Rulings
These disputes do not apply to changes brought about by a tariff proposal.
For more information on tariff proposals see section 6.3.5 - How do I work out the amount of duty to pay?
As authority to deliver the goods is a consequence of making the deposit this means that section 154 only applies to goods that are delivered under pre-payment not goods delivered under a PSP.
Delivery of the goods and payment of interest do not apply in cases where we are of the opinion that any evasion under the Excise Act has been committed or attempted.
Where you have or had possession, custody or control of any tobacco leaf  and/or excisable tobacco products  (subject to our control) you have to be able to satisfactorily account for them when requested.
If we ask you to account for tobacco leaf or excisable tobacco products, and you cannot satisfactorily do so, then you will generally be required to pay the excise duty on the excisable tobacco products or an amount equal to the excise duty in the case of tobacco leaf. If we require this payment you will be given a written demand. The amount you are required to pay is calculated using the rate in force on the day the demand is made. A payment of duty (or an amount equal to the duty) does not prevent the Commissioner from pursuing other liabilities arising under the Excise Act for the same goods. 
When requested to account for goods you must be able to show that:
- the goods are still under excise control
- duty has been paid
- duty was not payable (for example, where a remission applied), or
- the goods have otherwise been dealt with in accordance with the law (for example, moved pursuant to the conditions of a movement permission and the goods, and responsibility to keep the goods safely and account for them when requested has been taken up by another person or the goods were exported).
Goods will not have been accounted for satisfactorily if they were:
- given away for promotional purposes 
- stolen from licensed premises,  or
- delivered into the Australian domestic market under the mistaken belief that they were not excisable. 
We may also demand payment from you if you have failed to keep excisable tobacco products safely (for example, if you have a break-in and a theft occurs). Again you will generally have an opportunity to pay the excise duty. If the duty is not paid, we may demand that you pay an amount equal to the duty payable at the rate applicable on the day of the demand.  If we require this payment you will be given a written demand.
Our decision to demand payment is a reviewable decision. 
For information about your review rights refer to chapter 8 - Reviews and objections .
In determining whether you have accounted for the excisable tobacco products, we may allow you to offset any stock shortages and surpluses.
A licensed distributor of tobacco products is asked to account for their excisable tobacco products. They carry out a stocktake and there is a surplus of 4,000 sticks of Brand X and a shortage of 10,000 sticks of Brand Y.
We will allow the distributor to offset the surplus and shortage. Therefore, there are 6000 sticks that have not been accounted for.
A demand will be issued for an amount equal to the excise duty payable on the 6,000 sticks.
The licence holder corrects book stock to take up the surplus floor stock of 4,000 sticks and, when the demand is paid, writes off the shortage of 10,000 sticks.
A licensed distributor of tobacco products is asked to account for their excisable tobacco products. They carry out a stocktake and there is a surplus of 12,500 sticks of Brand A and a shortage of 5,000 sticks of Brand B.
We will allow the distributor to offset the surplus and shortage. Therefore, there are no sticks that have not been accounted for but there is a surplus of 7,500 sticks.
The licence holder corrects book stock to take up the surplus floor stock of 12,500 sticks and write off the shortage of 5,000 sticks.
If you have a storage licence and stock excisable alcoholic goods and tobacco products, you may only offset tobacco against tobacco and alcohol against alcohol.
What happens if I return tobacco products to underbond stock?
Tobacco products that have been delivered into home consumption but returned before the end of the settlement period are not required to be included on the excise return for that period. The product can be returned to underbond stock and treated as though it has not left excise control. Tobacco product that has been returned to a licensed place in a settlement period after the tobacco was delivered and duty paid must be dealt with via a refund application. A refund under these circumstances is only payable if the returned product is either destroyed or used in the manufacture of other tobacco, cigarettes or cigars.
For more information about refunds and remissions see chapter 7 - Remissions, refunds, drawbacks and exemptions .
If you apply for a manufacturer or storage licence, you can use your application form to indicate whether you intend to pay excise duty either periodically or prior to delivery. You do not need to complete a separate PSP application.
If you do not have a licence, or you originally chose not to pay excise duty periodically, you can apply for a PSP by completing an Application For A Periodic Settlement Permission form (Nat 73712) and forwarding it to us for approval.
If we approve your PSP, we will notify you in writing within 28 days of receiving your completed application.
A PSP is not transferable to another person and remains in force until revoked.
A request to add or delete delivery establishments from a PSP is treated as if it were a request for a new permission. However, your PSP number will remain unchanged.
We may also:
- refuse to grant a PSP
- impose conditions on a PSP, or
- cancel a PSP
Failure to comply with a condition may result in the cancellation of the PSP.  In such an instance, we would take into account a variety of factors, including your payment history.
A decision to refuse or to cancel a PSP is a reviewable decision.
For information about your review rights refer to chapter 8 - Reviews and objections .
For more information about PSPs, contact us by phoning 1300 137 290 .
Your PSP in relation to excisable tobacco products will include:
- permission to deliver excisable tobacco products into home consumption
- conditions, such as:
- settlement period - the period specified on which goods can be delivered 
- the type of goods that may be delivered from each premises,
- quantity limits (if any)
- when you must pay the duty
- how you must pay - permitted methods (e.g. EFT, cheque, at a Post Office)
- when and how to lodge your excise return,  and
- record-keeping requirements
- a schedule listing:
- one or more premises from which deliveries may be made.
A PSP specifies a settlement period starting on Saturday and ending on Friday. It states that excise returns must be lodged by 4 pm on the first business day after the end of the settlement period. It also says that the duty on deliveries made during the settlement period must be paid at the same time as the excise return is required to be lodged.
You must lodge an excise return and pay the duty by 4 pm on Monday for all goods delivered during the settlement period.
When a public holiday falls on a Monday, the excise return is due for lodgement and duty is to be paid by 4 pm on Tuesday, the next business day.
Where you have deliveries in different states of Australia there may be different public holidays in those states. If your returns are prepared by an office in a state different from that in which the delivery into home consumption occurs, lodgement is due on the next business day in the state where the return is prepared. 
The Taxation Administration Act 1953 (TAA) provides the Commissioner with the power to allow the payment of a tax related liability (including excise duty) and lodgement of an approved form (including an excise return) to be deferred in certain circumstances. Practise Statement Law Administration (PSLA) 2011/14 and 15 provide details of when the Commissioner can exercise this power, with the main requirement being that the circumstance that led to the request to defer payment or lodgement is outside the control of the entity required to pay the liability and lodge the return.
Circumstances that are accepted as outside the control of a PSP holder include natural disaster, serious illness or legal impediment, while an example of a circumstance that would not satisfy the requirements of the PSLA would be a PSP holder closing down their operations for Christmas holidays (other than acknowledged public holidays).
Delivery under periodic settlement permission
If we provide you with a PSP, you must take the following steps to deliver excisable tobacco products into home consumption:
- deliver the tobacco products into home consumption: (the products are now no longer subject to excise control)
- complete and submit your excise return in accordance with the timeframes in the permission, and
- pay the duty to us in accordance with the timeframes in the permission.
Delivery after prepaying the excise duty
If you do not have a PSP, you must take the following steps to deliver excisable tobacco products into home consumption:
- complete and submit your excise return
- pay the duty to us
- obtain a Delivery authority from us, and
- deliver the tobacco products into home consumption.
To lodge your excise return (NAT 4285):
- fax it to us on 1300 131 456 , or
- post it to:
Excise Returns Processing Unit
PO Box 3007
PENRITH NSW 2740
You can pay excise duties:
- by electronic funds transfer, including direct credit and BPAY
- using a credit card
- in person at a Post Office, or
- by mail (cheque or money order).
If you are required to pay your other tax debts electronically, you must also make your payment for excise duty by electronic funds transfer.
If you pay the excise duty at a Post Office, you must use a payment advice. To obtain a payment advice booklet, phone us on 13 72 26 or, if you need further information, 1800 815 886 and supply us with your Australian business number (or Excise Identification Number) and client account number.
Lodgement of an excise return and payment of any duty must be made by the day and time stated on your PSP. This means that we must receive the funds by that time. 
Failure to pay on time may result in the cancellation of your PSP.
To obtain an excise return (NAT 4285):
For more information about completing your excise return refer to the Excise return instructions (NAT 15436).
You may correct errors in your excise return or add new lines by lodging an amending excise return and referencing the number of your original return.
If your amendment results in a shortfall in excise duty paid, you must pay the additional duty when you lodge the amending return.
If your amendment results in an overpayment of excise duty, you may apply for a refund or treat the amount as a credit and offset it against the duty you are liable to pay in your next excise return.
An amending return can only be used to change product details such as tariff item, volume or rate of duty.
If you wish to change other information in your original excise return (for example client details or the settlement period) you must lodge a new excise return form as the amending excise return form does not cater for changes to these sections. The new return must contain the amended details and refer to the original return. You should also request cancellation of the original return.
To obtain an Amending excise return (NAT 4286):
For more information about completing your Amending excise return refer to the: Amending e xcise return instructions (NAT 15772)
If you need more information on payment of duty contact us as follows:
- phone 1300 137 290
- fax 1300 130 916
- e-mail us at ATO-EXC-Tobacco@ato.gov.au , or
- write to us at
Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
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.
The following are the penalties that may apply after conviction for an offence.
Move, alter or interfere
If you move, alter or interfere with excisable tobacco products that are subject to excise control, without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable tobacco products. 
If you deliver excisable tobacco products into home consumption contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable tobacco products. 
If you evade payment of any duty which is payable, the maximum penalty is 5 times the amount of duty on the excisable tobacco products, or where a court cannot determine the amount of that duty the penalty is a maximum of 500 penalty units. 
False or misleading statements
If you make a false or misleading statement, or an omission from a statement in respect of duty payable on particular goods, to us, a penalty not exceeding the sum of 50 penalty units and twice the amount of duty payable on those goods. 
In some cases these penalties can be in addition to the duty that is payable on the excisable tobacco products as they have been delivered into home consumption. 
Deliver into home consumption 
Deliver into home consumption is the term used in this guide and certain parts of the Excise Act to describe when excisable tobacco products 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  where issues closely related to it are considered with the most appropriate one being Caltex Australia Petroleum Pty Ltd v. Commissioner of Taxation . 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:
His Honour stated that 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.
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.
As these guidelines deal with tobacco products, we have used the term excisable tobacco products.
Excisable tobacco products include:
- cigarettes, and
Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.
Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.
An excise return  is the document that you use to advise us:
- the volume of excisable tobacco products that you have delivered into home consumption during the period designated on your PSP, or
- the volume of excisable tobacco products that you wish to deliver into home consumption following duty payment and approval.
A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of publication, is $170.
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.
Tobacco means tobacco leaf subjected to any process other than curing the leaf as stripped from the plant. 
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 under a movement permission.
In this chapter we have referred to the following legislation:
Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods
Section 58 - Entry for home consumption etc.
Section 59 - Payment of duty
Section 59A - Declared period quotas - effect on rates of Excise duty
Section 60 - Persons to keep excisable goods safely etc.
Section 61 - Control of excisable goods
Section 61C - Permission to deliver certain goods for home consumption without entry
Section 77AA - Tobacco leaf stock may be checked
Section 114 - Time for commencing action
Section 120 - Offences
Section 154 - Deposit of duty
Section 162C - Review of decisions
Section 5 - Duties of excise
Section 6AA - Indexation of tobacco duty rates
4AA - Penalty units