ATO Interpretative Decision
ATO ID 2007/203 (Withdrawn)
Excise
Excise: home consumption - delivered - prepaid entryFOI status: may be released
-
This ATO ID is withdrawn from the database following the decision of the Federal Court in Caltex Australia Petroleum Pty Ltd v. Commissioner of Taxation [2008] FCA 1951, and is replaced by ATO ID 2010/13.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Are excisable goods subject to the Commissioner's control for the purposes of paragraph 50(1)(a) of the Excise Regulations 1925 (Excise Regulations) if the goods are destroyed after they have been entered for home consumption and excise duty paid, but before they are removed from the licensed premises?
Decision
Yes. excisable goods are subject to the Commissioner's control for the purposes of paragraph 50(1)(a) of the Excise Regulations if the goods are destroyed after they have been entered for home consumption and excise duty paid, but before they are removed from the licensed premises.
Facts
Excisable goods were entered for home consumption and the relevant excise duty was paid. Authority to remove the goods for home consumption was given.
The goods were destroyed prior to being physically removed from the licensed place.
Reasons for Decision
Section 78 of the Excise Act 1901 (Excise Act) provides for the granting of remissions, rebates and refunds in respect of excisable goods, subject to the Excise Regulations.
Regulation 50 of the Excise Regulations sets out a number of circumstances under which refunds, rebates and remissions are available. The availability of refunds, rebates and remissions is also subject to a number of other regulations.
Paragraph 50(1)(a) of the Excise Regulations provides that one of the prescribed circumstances in which a refund, rebate or remission is available is where:
- (a)
- the goods on which Excise duty has been paid or is payable have, while subject to the CEO's control:
- (i)
- deteriorated or been damaged, pillaged, lost or destroyed; or
- (ii)
- become unfit for human consumption; or
- ...
Therefore, entitlement to a refund relies (in part) on whether the goods on which Excise duty has been paid were subject to the CEO's control when they were destroyed. The term CEO is defined in section 4 of the Excise Act as meaning the Commissioner of Taxation.
Subsection 61(1) of the Excise Act specifies when excisable goods cease to be subject to the CEO's control. Subsection 61(1) states:
61(1) All excisable goods are subject to the CEO's control until delivered for home consumption or for exportation to a place outside Australia, whichever occurs first.
Section 58 of the Excise Act allows for authority to be given for the removal of goods for home consumption. Section 58(1) states:
58(1) Subject to subsections (2) and (4), entries may be made by the licensed manufacturer or owner and passed by an officer and may authorize the removal of excisable goods for:
Therefore, in order to determine when goods leave the CEO's control, we must determine what constitutes 'home consumption' and when goods are 'delivered' for home consumption.
The term 'home consumption' is not defined in the Excise Act and there is no definitive case law that looks at the issue in question. However there are several cases where issues closely related to it are considered. In R v. Lyons (1906) 3 CLR 770 at 784 O'Connor J stated, in relation to the Customs Act 1901 (Customs Act),
... the whole policy of the Customs Act, as indicated by a number of sections, is that, from the time of importation until the time of paying duty, the customs shall not lose control of the articles imported.
His Honour further stated 'if once goods go into home consumption, that is, into circulation ...' He does not appear to distinguish between the concept of duty payment and goods going into home consumption.
In Carmody v. F C Lovelock Pty Ltd (1970) 123 CLR 1 Gibbs J stated:
... that as a general rule goods entered for home consumption would be lawfully delivered for home consumption, and would pass out of customs' control, forthwith upon an entry being passed. Although the Customs Act does not expressly so provide, the duty would normally be paid at the time of passing the entry (see R. v Lyon).
This differentiates the issues of entries being passed from the payment of duty. While this is a Customs Act case the concept of 'delivered for home consumption' is common to Customs and Excise.
In the circumstances in question the goods are the subject of authority under section 58 of the Excise Act. Section 58 of the Excise Act allows an officer to authorise removal of goods for home consumption and section 61 of the Excise Act specifies that goods are subject to the CEO's control until delivered for home consumption. The Excise Act does not define 'delivered' or removal. The ordinary meaning of delivery is discussed in Gamer's Motor Centre (Newcastle) Pty Ltd v. Natwest Wholesale Australia Pty Ltd . Mason CJ noted (at 243) that the popular meaning of the word 'delivery' is the dispatch of goods. The Macquarie Dictionary (Revised 3rd Edition) defines removal as 'the act of removing' and remove as 'to move from a place or position; take away; take off.' Both the words removal and delivery imply physical movement.
Delivery for home consumption is different from entry for home consumption. The licensed manufacturer or owner may enter the goods but the goods must not be delivered without authority to do so. Granting of authority to remove the goods under section 58 of the Excise Act does not constitute delivery.
It is our view that section 61 of the Excise Act requires there to be physical movement of the goods for goods to be 'delivered for home consumption'.
Excisable goods are therefore subject to the CEO's control until dispatched into circulation. This means the goods must physically leave the licensed area and once they do so they are no longer subject to the CEO's control.
Where the goods have been destroyed before physically leaving the licensed premise they are still subject to the CEO's control even though they have been entered and duty has been paid and authority to remove them for home consumption has been given. Where a licence incorporates only part of a premise, then movement out of the licensed area to part of the premise not licensed will constitute delivery from the CEO's control.
Date of decision: 28 August 2006
Legislative References:
Excise Act 1901
subsection 58(1)
subsection 61(1)
Case References:
R v. Lyons
(1906) 3 CLR 770
13 ALR 37
(1970) 123 CLR 1 Gamer's Motor Centre (Newcastle) Pty Ltd v. Natwest Wholesale Australia Pty Ltd
(1987) 163 CLR 236
Other References:
The Macquarie Dictionary (Revised 3rd Edition)
Keywords
Delivered for home consumption
Excise
Excise collections
Licensing
ISSN: 1445-2782
| Date: | Version: | |
| 28 August 2006 | Original statement | |
| You are here | 15 January 2010 | Archived |
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