What are concessional spirits
Spirits are free of excise duty if they are:
- used for approved concessional purposes (you may still need a permit to buy these spirits)
- denatured (made unfit for human consumption) using a formula approved by us and not for use as fuel in an internal combustion engine).
Concessional spirits are typically very high strength.
You generally need a permit or licence from us to:
- use spirits for concessional purposes
- buy spirits that have been denatured using a formula not approved by us
- supply end users directly from someone else's excise-licensed premises
- resell concessional spirits.
Regulations concerning the safe and proper handling, storage, transport and use of dangerous goods such as spirit, are governed by other relevant local, state and federal bodies. Contact the relevant body in your state or territory for further information.
For more information, see Application for approval to use spirits (NAT 3248).
Using spirits for concessional purposes
You can use concessional spirits for approved industrial, manufacturing, scientific, medical, veterinary or educational purposes, such as to:
- fortify Australian wine or grape must
- manufacture
- medicines, including vaccines
- essences and flavours
- mouthwashes
- printing inks
- foodstuffs
- sterilise equipment
- preserve specimens.
Resale of concessional spirits is not an approved use. You must have an excise licence to resell concessional spirits.
To use concessional spirits for approved purposes, you generally need to hold a permit to use concessional spirits.
However, certain professionals and institutions can use quantities of concessional spirits for approved purposes without needing a permit, including:
- health care practitioners
- veterinary practitioners
- medical, government and educational institutions.
For more information, see:
- EXC 2014/2 Excise (Concessional spirits – class of persons) Determination 2014 (No. 1)
- EXC 2016/6 Excise concessional spirit approvals guidelines 2016 (No. 2).
Buying denatured spirit
You don't need a permit to buy a denatured spirit if it:
- has been denatured using a formula approved by us
- is not for use as fuel in an internal combustion engine.
You do need a permit to buy denatured spirit if it has been denatured using a formula that is not approved by us.
Licence obligations for concessional spirits
If you take physical possession of concessional spirits to supply or resell, you must hold an excise manufacturer or storage licence. You will need to make sure you understand and meet your excise obligations. These include:
- holding the correct licence
- reporting deliveries
- record keeping.
If you supply or resell concessional spirits but don't take physical possession of the spirits, see Reporting deliveries of concessional spirits without an excise licence.
A manufacturer licence will also allow you to:
- store spirits
- repack spirits
- export spirits
- reduce the strength of spirits
- add colourings or other chemicals to spirits.
A storage licence will also allow you to:
- store spirits
- repack spirits (but not change the product, for example you can't reduce)
- export spirits.
If you want to move goods between excise-licensed premises or to a place of export, remember you need to apply for permission.
There are different record keeping requirements for concessional spirits, depending on whether you resell or use concessional spirits.
Reporting deliveries of concessional spirits without an excise licence
You don't need a manufacturer or storage licence if you don't take physical possession of the concessional spirit (for example, you are acting as an agent) and you want to supply or resell it. In this case you must:
- be registered for excise
- lodge an excise return to report your deliveries.
You report either before delivery or periodically after delivery (if you have a periodic settlement permission).
Who you can supply
You can supply concessional spirits to:
- any person or business who holds a current concessional spirits permit and nominates you as a supplier – you can't supply more than the quantity on the permit though (Excise Tariff sub-items 3.5 and 3.7)
- the following professionals and institutions (Excise Tariff sub-item 3.6)
- health care practitioners
- veterinary practitioners
- medical, government and educational institutions
- anyone for any purpose if the spirits are denatured to a formula we have approved (Excise Tariff sub-item 3.8).
You still require a concessional spirit permit if you are a manufacturer and you supply the concessional spirit to yourself for use.
For more information on educational, medical and government institutions that can be supplied, see EXC 2014/2 Excise (Concessional spirits – class of persons) Determination 2014 (No. 1).
Evidence required before supply
Before you supply concessional spirits (other than denatured spirit), you must have evidence that the user can receive the concessional spirits. Examples include:
- a current concessional spirits permit (if applicable) – a copy is sufficient
- a registration certificate or registration number for a health practitioner (pharmacist, doctor, chiropractor, dentist, osteopath, physiotherapist or registered nurse) or veterinary practitioner registered under state or territory law
- information evidencing an exemption under Part 3-3 of the Therapeutic Goods Act 1989 (TGA) for a health care practitioner (acupuncturist, herbalist, homeopath or naturopath) such as a certificate or other evidence of membership with an approved practitioner organisation
- an official letterhead or purchase order from a medical or educational institution or government agency
- a certificate of registration or accreditation from an educational institution.
If you're dealing with third parties and need to know about their approvals to receive concessional spirits, you can contact us.
Approved formulas for denatured spirits
Approved formulas for denatured spirits (Excise Tariff sub-item 3.8) specify the minimum quantity of specific or certain denaturants that must be used to supply denatured spirits at a duty rate of 'free'.
If you use a different formula, you may apply to us in writing to have your formula approved. Your application should include all of the following:
- details of the formula
- specifications for the denaturants used
- technical specifications for the effects of the denaturant in a quantity of alcohol at a strength of 5% by volume in terms of
- smell
- taste
- toxicity.
We will write to you to advise you of the outcome of your application.
For more information, see EXC 2016/10 Excise (Denatured spirits) Determination 2016 (No. 3)