ATO Interpretative Decision

ATO ID 2007/148

Excise

Excise: imposing restrictions on an excise storage licence
FOI status: may be released

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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.

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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the Collector able to impose a condition on a storage licence under subsection 39D(3) of the Excise Act 1901 (Excise Act) that restricts the storage of excisable goods to ship's stores and aircraft's stores?

Decision

Yes. The Collector is able to impose a condition on a storage licence under subsection 39D(3) of the Excise Act that restricts the storage of excisable goods to ship's stores and aircraft's stores.

Facts

An entity (provedore) supplies excisable goods in the form of ship's stores and aircraft's stores to overseas ships and international aircraft.

The provedore applies for a storage licence in order to receive excisable goods in the form of ship's stores and aircraft's stores under bond.

Reasons for Decision

Section 39D of the Excise Act provides that:

A licence is subject to such conditions (if any) as are specified in the licence, being conditions considered by the Collector to be necessary or desirable for the protection of the revenue or for the purpose of ensuring compliance with the Excise Acts.

In Re Francesco Martino Applicant v. Australian Taxation Office Respondent [2002] AATA 1242 (the Martino Case) (unreported, Deputy President Forgie, 29 November 2002), the expression 'protect the revenue' was considered to have two limbs:

•: ensuring that the Commonwealth receives all that it should in the form of any excise that is ultimately payable; and
•: not spending more of the Commonwealth's money than need be spent in carrying out its supervisory duties and responsibilities under the Act and in ensuring that excisable goods are not marketed illegally in Australia.

A further aspect of the first limb is that the Commonwealth should receive all the monies properly payable to it in a timely manner. This principle is also evident in paragraph 39A(2)(k) of the Excise Act. Under this paragraph, the Collector may refuse to grant a storage licence on the grounds that the grant of the licence would delay liability for duty.

With regard to ship's stores and aircraft's stores, subsection 160A(1) of the Excise Act provides that excise duty is not payable (except as provided by the regulations).

If a provedore did not hold a storage licence, they would be required to acquire excisable goods duty paid. As ship's stores and aircraft's stores are not liable to excise duty, a provedore would need to seek a refund of the duty that they paid on the goods under item 5, clause 1 of Schedule 1 of the Excise Regulation 2015.

To avoid this situation, the Collector grants storage licences to provedores under section 39A of the Excise Act so that they do not need to acquire excisable goods duty paid but may instead receive them under bond.

However, if a provedore had an unconditional storage licence and sold excisable goods other than in the form of ship's stores or aircraft's stores, then the provedore would be able to hold those goods and delay the payment of duty until those goods are delivered from the provedore's licensed storage place.

Such a delay in payment means that the Collector spends more time (and therefore money) than is necessary in carrying out their supervisory duties and responsibilities under the Excise Act. It also means that the Commonwealth will not receive the excise duty properly payable to it in a timely manner.

Consequently, it is necessary or desirable for the protection of the revenue to impose a condition on a storage licence granted to a provedore under subsection 39D(3) of the Excise Act that restricts the storage of excisable goods to ship's stores and aircraft's stores.

Amendment History

Date of Amendment	Part	Comment
3 July 2015	Reasons for Decision	Changes to citations due to Excise Regulation 2015 replacing Excise Regulations 1925

Date of decision: 10 July 2007

Legislative References:
Excise Act 1901
   section 39A
   paragraph 39A(2)(k)
   section 39D
   subsection 39D(3)
   subsection 160A(1)

Excise Regulation 2015
item 5, clause 1 of Schedule 1

Case References:
Re Martino v. Australian Taxation Office
[2002] AATA 1242

Keywords
Excise
Ship's stores

Siebel/TDMS Reference Number: 5472735; 1-6LE2UWH

Business Line: Indirect Tax

Date of publication: 13 July 2007

ISSN: 1445-2782

history

	Date:	Version:
	10 July 2007	Original statement
You are here →	3 July 2015	Updated statement

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