Excise guidelines for duty free shops

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Terms we use in these Guidelines

Deliver into the Australian domestic market ^[193]

'Deliver into the Australian domestic market' is the term we use in this manual for when excisable goods are released into domestic consumption. The term used in the legislation is 'deliver for home consumption'.

Normally this will be by delivering the goods away from licensed premises but includes using those goods yourself (for example, sales to staff).

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. ^[194]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Duty-free operator return

A duty-free operator return is a document that you use if you operate a duty-free store that is:

• on-airport - to report stocktake shortages or surpluses of excisable alcohol goods
• outwards off-airport - to report missed or found dockets and stocktake shortages or surpluses of excisable alcohol goods, or
• where you also hold a licence to store excisable alcohol goods at a site that is not a duty-free store - to report any shortages or surpluses of stock at your storage site.

Excisable goods

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are listed in the Schedule to the Excise Tariff Act, and manufactured or produced in Australia.

For operators of duty free shops this will include:

• alcohol goods that are produced or manufactured in Australia and are subject to excise, and
• imported alcohol goods that have undergone a process of manufacture or production in Australia. For example, high strength imported whisky which has been reduced by adding water (in Australia) before it is bottled, constitutes manufacture or production for excise purposes. Vodka imported in bulk and repackaged in Australia, does not constitute manufacture for excise purposes.

This will not include:

• other imported alcohol goods (because these goods are subject to customs duty)
• wine (which is generally subject to wine equalisation tax (WET)), and
• cigarettes and other tobacco goods as there is currently no licensed manufacture of tobacco in Australia.

For more information about customable alcoholic beverages refer to Chapter 22 of Schedule 3 to the Customs Tariff Act 1995.

Examples of excisable goods include Australian made:

• beer
• spirits, and
• premixed drinks known as ready-to-drink (RTD) beverages.

Excise control

Section 7 of the Excise Act refers to the CEO as having general administration of this Act. In this manual we will also refer to this general administration as Excise Control.

Goods are subject to excise control from the point of manufacture until they have been delivered into the Australian domestic market (referred also as to home consumption ^[195] ) or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

International flight

An international flight is defined as:

• a flight, whether direct or indirect, by an aircraft between a place in Australia from which the aircraft takes off and a place outside Australia at which the aircraft lands or is intended to land ^[196] , or
• a flight, whether direct or indirect, by an aircraft between a place outside Australia from which the aircraft took off and a place in Australia at which the aircraft landed. ^[197]

International voyage

An international voyage is defined as:

• a voyage, whether direct or indirect, by a ship between a place in Australia and a place outside Australia. ^[198]

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914. The current value of a penalty unit is on www.ato.gov.au at Penalties

Proprietor

In relation to a duty free shop, a proprietor is the holder of the warehouse licence that relates to the outwards duty free shop ^[199] or inwards duty free shop. ^[200]

Relevant traveller

• For outwards duty free shop purposes - A person who intends to make an international flight or international voyage, whether as a passenger on, or as a member of the crew (or the pilot or master) of an aircraft or ship, ^[201] or
• For inwards duty free shop purposes - A person who has arrived in Australia on an international flight, whether as a passenger on, or as a member of the crew (or the pilot) of, an aircraft and has not been questioned, for the purposes of the Customs Act 1901, by an officer of Customs, in respect of goods carried on that flight. ^[202]

Remission

A remission of excise duty extinguishes the liability for duty that was created at the point of manufacture, in prescribed circumstances.

For more information about remissions see Chapter 9 - Remissions and exemptions.

Section 50 direction

This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, or proprietor of licensed premises, to keep specified records, furnish specified returns, retain records for a specified period and produce those records on demand by us. This instruction is part of the licence.

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into the Australian domestic market and goods moving between premises under a movement permission.

Warehouse licence ^[203]

Has the same meaning as it has in the Customs Act 1901 which states:

'Warehouse' means a place that a person or partnership is licensed under section 79 to use for warehousing goods. ^[204]

Latest update

January 2022

Section

Changes and updates

Throughout

This chapter was updated to take into account the law changes that impacted the tobacco industry, as a result of which, there is no longer excisable tobacco goods manufactured in Australia that would be subject to excise control in the duty free shop or warehouse. The update also reflects the current duty rate and updates the references from the old Business Portal to the new Online Services for Business. Updated to new format and style including footnotes.

Details of previous updates are available through the versions linked to in the table below.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).