ATO Interpretative Decision

ATO ID 2004/113

Excise

Payment of Excise Duty: periodic settlement permission returns
FOI status: may be released
Status of this decision: Decision Current
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

If a person has a periodic settlement permission granted under section 61C of the Excise Act 1901, and the permission requires excise duty to be paid on a certain day, does this mean the payment must actually be received by the Tax Office on that day?

Decision

Yes. Where a periodic settlement permission granted under section 61C of the Excise Act requires excise duty to be paid on a certain day, payment must be received by the Tax Office on that day.

Facts

A person has a periodic settlement permission.

The permission requires duty to be paid on the first working day following the end of the accounting week.

The permission specifies that the accounting week for the person lasts seven days and begins on a Monday and ends on the following Sunday.

The person organises payment on a Monday but because of the way the financial institution batches its transfers, payment is not received by the Tax Office until Tuesday.

Reasons for Decision

Section 61C of the Excise Act allows for the granting of a permission to deliver excisable goods without entry. Subsection 61C(3) allows for the permission to be subject to requirements specified in the permission.

The permission issued to the person contains the following relevant (standard) requirements:

...Payment of excise duty due and payable in respect of goods delivered for home consumption during an accounting week shall be made by the Permission Holder on the first working day immediately following the last day of the accounting week...

and

...You must lodge your completed return by 4pm on the first working day following the accounting week in which you made your delivery. You must also make your payment by 4pm on the same day...

The permission for this person specifies that the 'accounting week' means a period of seven days commencing on each Monday and concluding at the close of business on the Sunday following.

Section 8AAZM of the Taxation Administration Act 1953 (TAA) deals with when payments of tax debts are taken to have been made. Section 8AAZM states:

For the purposes of taxation laws, a payment in respect of a tax debt is taken not to have been made until it is received by:

(a)
the Commissioner; or
(b)
a person acting on behalf of the Commissioner.

Therefore, if the payment relates to taxation laws, and a payment under a periodic settlement permission equates to payment of a tax debt, then payment is not made until it is received by the Commissioner or a person acting on behalf of the Commissioner.

The term 'taxation law' is defined in subsection 2(1) of the TAA as follows:

...' taxation law' has the meaning given by the Income Tax Assessment Act 1997.
Subsection 955-1(1) of the Income Tax Assessment Act 1997 defines ' taxation law' to mean:

(a)
an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or
(b)
regulations under such an Act (including such a part of an Act); or
(c)
the Tax Agents Services Act 2009 or regulations made under that Act.

however, this meaning is modified by subsection 2(2) of the TAA which states:

Despite the definition of taxation law in subsection (1), an Excise Act (as defined in subsection 4(1) of the Excise Act 1901) is not a taxation law for the purposes of Part III of, and Subdivision 284-B in Schedule 1 to, this Act.

The general administration of the Excise Act rests with the CEO, which is defined in section 4 of that Act as the Commissioner of Taxation. As the Excise Act is not specifically prescribed, it therefore falls within the meaning of a taxation law, except for the purposes of Part III (Prosecutions and Offences) and Subdivision 284-B (Penalties relating to false or misleading statements) in Schedule 1 to the TAA. Payments under a periodic settlement permission are not made for the purposes of Part III or Subdivision 284-B in Schedule 1. Therefore, the payment relates to taxation laws.

The term 'tax debt' is defined in section 8AAZA of the TAA as meaning 'a primary tax debt or a secondary tax debt.' A 'primary tax debt means any amount due to the Commonwealth directly under a taxation law ... including any amount that is not yet payable.' Excise duty payable under a periodic settlement permission is therefore a primary tax debt and, for the purposes of section 8AAZM of the TAA, a tax debt.

The periodic settlement permission requires payment on the first working day following the end of the accounting week. If the end of the accounting week is a Sunday then payment must be received by the Commissioner or someone acting on behalf of the Commissioner by 4pm on Monday. If, by using a particular financial institution, the client does not ensure the Tax Office or someone acting on behalf of the Commissioner has received the funds by 4pm Monday then they have not complied with a requirement of the periodic settlement permission.

Date of decision:  14 January 2004

Legislative References:
Taxation Administration Act 1953
   section 8AAZM

Excise Act 1901
   section 61C

Related ATO Interpretative Decisions
ATO ID 2004/114

Keywords
Excise
Excise collections
Excise collections other
Licensing
Weekly settlement permission

Business Line:  Indirect Tax

Date of publication:  6 February 2004

ISSN: 1445-2782

history
  Date: Version:
You are here 14 January 2004 Original statement
  17 January 2019 Withdrawn

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