ATO Interpretative Decision
ATO ID 2006/119 (Withdrawn)
Excise
Excise: Record keeping requirements when licences cancelled or not renewedFOI status: may be released
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This ATO ID is withdrawn as the issue is now covered by the Excise Guidelines for the alcohol industry.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision withdrawn 17 January 2019.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is a licence holder required to continue to keep their records in accordance with a direction issued under section 50 of the Excise Act 1901 even after their licence expires or is cancelled?
Decision
Yes. A licence holder is required to continue to keep their records in accordance with a direction issued under section 50 of the Excise Act even after their licence expires or is cancelled.
Facts
A person is issued a manufacturer's licence under Division 2 of the Excise Act.
The Commissioner issues a direction under section 50 of the Excise Act (section 50 direction) requiring the licensed manufacturer to keep particular records for five years.
The person's licence expires or is cancelled.
Reasons for Decision
Subsection 50(1) of the Excise Act empowers the Commissioner to direct a licensed manufacturer (or proprietor of an approved place) to keep particular records for a specified time and produce the records to an officer on demand.
50(1) A licensed manufacturer, and a proprietor of an approved place, shall:
...
In this instance, the taxpayer received a section 50 direction when their licence was granted. The direction set out the records that the taxpayer was required to keep records, and specified that the records were to be retained for five years.
The taxpayer's licence subsequently expired, or was cancelled under section 39L of the Excise Act.
Although section 50 requires a 'licensed manufacturer' to comply with a direction issued by the Commissioner, and a person whose licence expires or is cancelled is no longer a licensed person, the direction continues to apply to the former licensed manufacturer insofar as he/she continues to hold records specified in their section 50 direction that relate to their former activities as a licensed manufacturer.
The importance of licensed manufacturers keeping records is illustrated in a number of provisions throughout the Excise Act. For example, paragraph 39G(j) states that a licence may be suspended if the licence holder is not keeping proper books of account or records to enable the Chief Executive Officer of Customs (CEO) adequately to audit those books or records. (Certain other requirements must be satisfied where the licence is a producer licence or dealer licence). Further, section 39A enables the Commissioner to refuse to grant a licence where the applicant would not be able to keep proper books of account or records to enable the CEO adequately to audit those books or records (once again, subject to certain additional requirements in the case of producer or dealer licences).
By setting a time limit of 5 years for the retention of records, the Commissioner ensures his ability to audit the client's affairs at a time convenient to him so as to ensure the client has paid all excise duty properly payable.
If, in fact, the direction issued under section 50 ceased to have effect once a client's licence expired or was cancelled, the Commissioner would be unable to subsequently review the client's records with a view to determining whether the correct amount of duty had been paid, as the client would no longer be required to retain their records. This would defeat the purpose of the section 50 direction.
It follows that a client is required to continue to hold records specified in a section 50 direction for the duration of the time period specified in the direction, even though their licence has expired or been cancelled.
Date of decision: 18 April 2006
Legislative References:
Excise Act 1901
section 50
section 39L
Keywords
Excise payments record keeping
ISSN: 1445-2782
| Date: | Version: | |
| 18 April 2006 | Original statement | |
| You are here → | 17 January 2019 | Archived |
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