The excise duty attached to excisable alcohol products forms a significant component of the overall value of the goods. A licensing regime reduces the risk that the correct amount of duty will not be paid.

2.2.2 WHAT IS A LICENCE?

A licence is an approval or authorisation to enable you to undertake activities as specified in the licence. If you undertake these activities without a licence or contravene your licence you are committing an offence and may be prosecuted.

A licence is issued to a specific entity and specifies the premises where the activities may be undertaken. This may require you to have more than one licence.

Licences can be issued to:

individuals
partnerships and companies in their own right, and
individuals and companies in their capacity as trustees.

There may be different licensing processes depending on the type of entity applying for the licence.

2.3 POLICY AND PRACTICE

2.3.1 DIFFERENT LICENCE TYPES

There are two licence types for excisable alcohol products:

Manufacturer
Storage

Manufacturer licence

To manufacture excisable goods, the Excise Act requires you to be a licensed manufacturer ^[10] and that the goods be manufactured at licensed premises in accordance with the conditions specified on your manufacturer licence. ^[11]

The Excise Act is directed towards controlling commercial operations. It would not be consistent with those controls for the ATO to grant a licence for the production of excisable goods for personal use. In particular, commercial operations would not include home distillation of spirit for personal use. ^[12]

The ATO does not grant licences to manufacture excisable goods for non-commercial use. While it is okay to make beer or wine (or other fermented beverages) for personal use, it is illegal to use a still of any size to distil spirits for personal use without the appropriate licence. ^[13]

The Excise Act definition of manufacture includes the manufacture of beer, for non-commercial purposes, using commercial facilities or equipment. This is what occurs at brew on premises shops (BOPS).

BOPS are premises which provide commercial brewing facilities for customers to make beer for their own consumption. Only the operator or proprietor of the BOPS is required to hold an excise licence, even though the customers may be seen to be carrying out the manufacturing activity. For more information regarding BOPS see Chapter 10 - Beer .

Where beer has been entered for home consumption in an individual container that is:

greater than 48 litres; or
at least 8 litres but not exceeding 48 litres, and is designed to connect to a pressurised gas delivery system (or other system prescribed by the regulations),

and is subsequently repackaged into an individual sealed container that is:

less than 8 litres; or
at least 8 litres but not exceeding 48 litres, and is not designed to connect to a pressurised gas delivery system (or other system prescribed by the regulations),

this repackaging process is considered manufacture for excise purposes ^[14] and is required to be done in accordance with a manufacturer licence.

Example 2A

A beer manufacturer XYZ sells duty paid beer in 50 litre kegs to restaurant ABC and restaurant ABC repackages the beer into their own 300 ml bottles for resale within the restaurant. Restaurant ABC is a manufacturer of beer and requires a licence to manufacture beer.

We consider that these common activities in relation to alcohol are manufacture for excise purposes:

fermentation (except for wine covered by the wine equalisation tax (WET))
distillation
the addition of flavours and/or colours (including in-line mixing as part of packaging into bottles, cans or kegs)
reduction (adding water)
blending*
denaturing spirits
maturation of spirits in wood, and
repackaging of duty-paid beer from bulk containers.

*Specifically in relation to blending spirits, section 77FM of the Excise Act provides that spirit blending to produce spirit constitutes the manufacture of that spirit for the purposes of the Excise Act. A consequence of this section is that where imported high strength spirit is blended in Australia with other high strength spirit the resulting spirit is excisable.

However, subsection 77FM also provides for the Commissioner to specify circumstances where blending of spirits does not constitute manufacture. Excise (Spirit blending exemptions) Determination 2010 (No.1) specifies the following circumstances:

The incidental blending of remnant spirit (whether previously entered for home consumption or under bond) within a vessel or container. It is a matter of fact and degree whether the contents of the vessel or container should be regarded as remnants.
The blending of spirit that has been previously entered for home consumption under sub-items 3.5, 3.6 and 3.7 of the Schedule to the Excise Tariff Act with like spirit that has also been previously entered for home consumption or another substance by a person who has approval under the Excise Act to use that spirit.
The blending of denatured spirit that has been previously entered for home consumption under sub-item 3.8 of the Schedule to the Excise Tariff Act with like spirit that has also been previously entered for home consumption or another substance by an end user.
The blending of spirit that has been previously entered for home consumption with like spirit previously entered for home consumption where no skill, knowledge or judgement was used in the blending process and the blending process does not result in the making of a product that is different from its inputs in any way (eg colour, taste or percentage of alcohol by volume).

'Excise manufacturer licences specify the manufacturing activity or activities permitted such as:

brewing
brew on premises shops (BOPS) operations
distillation
maturation
denaturing of spirit
manufacturing other excisable beverages, or
any combination of these.

You cannot commence manufacture of excisable alcohol products without a licence. This means that you cannot test your manufacturing equipment or produce samples to market to potential buyers if you do not hold a licence.

Imported alcohol products (other than alcohol which is subject to wine equalisation tax) are subject to customs duty at a rate that is equivalent to the duty on excisable alcohol products (except for an additional ad valorem duty that is payable on certain spirits). If you intend to use imported alcohol products in the manufacture of excisable products ^[15] you will not need to pay the customs duty (except any ad valorem duty that is payable) if you follow the provisions in the Customs Act. ^[16]

These guidelines do not address the requirements of the Department of Home Affairs, however, in general, the provisions provide that if your premises are specified in an excise manufacturer licence and also in a Customs warehouse licence you can enter the imported alcohol products for warehousing and then use the imported alcohol products to manufacture excisable goods. The liability to pay the customs duty on the imported alcohol products is extinguished (except for any ad valorem duty that is payable) upon the manufacture of excisable goods. You will then be liable to pay excise duty on the excisable alcohol products.

You can only manufacture goods at the premises specified in your licence. ^[17] We may also give you written directions in regard to what parts of your factory any manufacturing process is to be carried on and where inputs used in manufacture, and excisable alcohol products, respectively, are to be kept. ^[18]

Storage licence

If you have a manufacturer licence and wish to store your excisable alcohol products underbond at a place that is not specified in your licence you will require a separate storage licence for that place.

If you are in the business of wholesaling and distribution you may wish to store underbond excisable alcohol products, whether owned by you or someone else. In either case, you would require a storage licence.

Even if you are not the owner of the excisable alcohol products, you are still responsible for the security of the goods and may be liable to pay an amount equivalent to the duty if the excisable goods are not kept safely or are not satisfactorily accounted for. ^[19]

A storage licence will specify the type of excisable alcohol products and the location. It will also specify the activities, if any, you can undertake in relation to those goods, ^[20] and whose excisable goods you can store, for example:

goods you own
goods owned by certain people
storage only of underbond packaged product
storage only of bulk product (apart from storage in wood for maturation purposes)
packaging (in bottles, cans, kegs) that does not involve in-line mixing ^[21]
repacking (outer cartons only), or
filtering (except when filtering is combined with other processes and becomes part of an excise manufacturing process).

If you hold a valid manufacturer licence, you do not need a separate storage licence to store goods that you manufacture at those premises. Whilst the storage of your manufactured goods is not manufacture in itself, is a normal part of the chain of events in manufacturing goods. You may also store goods that have been manufactured elsewhere by another entity and moved underbond into your licensed premises.

2.3.2 WHAT ARE MY RESPONSIBILITIES AS A LICENCE HOLDER?

You are responsible for the safe custody of all excisable alcohol products held on your premises and for the observance of the Excise Act at the premises specified in your licence. ^[22]

You may be responsible for paying an amount equal to the duty that would have been payable on any stolen, missing or unaccounted for underbond excisable alcohol products. ^[23]

We may take stock of the excisable alcohol products you have manufactured and the materials used manufacturing them. If it appears to us that duty has not been paid on everything correctly, and you cannot satisfactorily account for the difference, you must pay the difference between the amount that has been paid and the amount that should have been paid. ^[24]

If you wish to destroy any excisable alcohol products you must first obtain permission from us to do so. This does not apply to the destruction of beer of up to 125 litres of alcohol per quarter, provided certain conditions are met. For more information refer to '7.3.1 When can I apply for a remission of excise duty?' of this guide.

You must not move excisable alcohol products, without approval from us. This includes moving excisable alcohol products from your licensed premises to any other location or for export. ^[25]

For more information about obtaining permission to move excisable alcohol products refer to Chapter 5 - Movement permissions .

You are also responsible for ensuring that you comply with the Excise Act and all conditions of your licence. ^[26]

You must keep, retain and produce records in accordance with section 50 of the Excise Act.

If you are a manufacturer, you will also need to:

ensure excisable alcohol products are only delivered for home consumption with appropriate authority, such as in accordance with a periodic settlement permission or Delivery authority ^[27]
pay the correct amount of excise duty ^[28]
provide all reasonable facilities to enable us to exercise our powers under the Excise Act, ^[29] and
provide sufficient lighting, correct weights and scales, and all labour necessary for
- weighing material received into your factory
- weighing all excisable goods manufactured in your factory, and
- taking stock of all material and excisable goods contained in your factory. ^[30]

If you have a storage licence, you will also need to:

ensure excisable alcohol products are only delivered into the Australian domestic market with appropriate authority, such as in accordance with a periodic settlement permission or Delivery authority , and
pay the correct amount of excise duty ^[31] if you are the owner or manufacturer.

For more information about duty liability and methods of payment refer to Chapter 6 - Payment of duty .

2.3.3 WHAT ELSE CAN WE DO?

Access

We have the right to enter your licensed premises at any time and can examine and take account of all the goods at the premises. ^[32] Note: we will usually only seek to enter your premises during normal business hours.

Stop vehicles

We can stop any vehicle leaving your licensed premises and check that there is proper documentation for excisable alcohol products leaving the premises. We can question the driver about any goods in the vehicle. We can direct that the vehicle be unloaded and goods taken to particular parts of the premises for further examination. We must not detain a vehicle for longer than is necessary to do the checking. ^[33]

Search vehicles

We can stop and search any vehicle (not just vehicles leaving a licensed premises) without a warrant if we have reasonable grounds for believing that the vehicle contains excisable alcohol products and that the vehicle has been used, is being used or will be used in committing an offence under the Excise Act (and certain offences in the Crimes Act 1914 ^[34] and Criminal Code ^[35] relating to accessory after the fact, attempt to commit an offence, aid and abet someone to commit an offence and conspiracy to commit an offence). ^[36]

Examine goods

We can open packages and examine, weigh, mark and seal any excisable alcohol products that are subject to excise control and, if you are a manufacturer, lock up, seal, mark or fasten any plant in or on your factory. ^[37]

We can also:

supervise the manufacture of excisable alcohol products, ^[38] and
take, utilise and dispose of samples of materials, partly manufactured excisable alcohol products and excisable alcohol products subject to excise control, and alcohol products that we have reasonable grounds for suspecting are excisable alcohol products on which duty has not been paid. ^[39]

2.3.4 WHAT RECORDS DO I NEED TO KEEP?

The Excise Act provides that a licence holder, and proprietor of an approved place, shall:

keep such records and furnish such returns as directed
keep these records for the period directed, and
on demand, produce those records to us. ^[40]

Any such direction will be in writing and included as a condition on your licence.

We can inspect and take copies of any records kept as directed.

If you cease to hold an excise licence you must still keep all records of your previously licensed activities. Records must be kept for the period of time as directed.

For more information about the type of records you may need to keep see the chapter relevant to your industry.

2.3.5 HOW LONG IS MY LICENCE VALID FOR?

Your licence will state its expiry date. When first issued, the licence is valid until the next 30 September two years after the anniversary of the day it is granted. ^[41]

Example 2B

If we grant a licence on 15 September 2007, it will expire on 30 September 2009.

If we grant a licence on 15 October 2007, it will expire on 30 September 2010.

Upon renewal a licence is valid for a further three years starting from the day after the date of expiry of the existing licence, that is, 1 October three years from the year the existing licence expires. ^[42]

2.3.6 IS MY LICENCE TRANSFERABLE?

Generally you cannot transfer your licence to another individual or business entity. The proposed new licence holder must apply for a new licence. You must also request cancellation of your current licence if you are no longer carrying out an excise activity. It is important that you advise us of any change in advance of it taking effect.

The exception to the above rule arises when a licence holder dies. If this is the case, the licence is taken to be transferred to the person's legal personal representative. This allows for the finalisation of the affairs and, unless cancelled earlier, the licence is taken to be automatically cancelled three months after the licence holder dies. ^[43]

For more information about cancelling licences refer to Chapter 4 - Licensing: suspension & cancellation .

Licences may be transferred to new premises if the licence holder relocates their business. However, we will need to be satisfied that the physical security of the new premises is adequate and so you must contact us prior to the relocation to ensure that all the required documentation is finalised in time for the move.

2.3.7 CAN MY LICENSING INFORMATION BE DISCLOSED?

As well as the protection provided by the Privacy Act 1988, the tax laws have secrecy provisions about using and disclosing taxpayer information. ^[44] We can only look at, record, discuss or disclose information about you when it is a necessary part of our work, or where the law specifies that we may.

Subdivision 355-B of Schedule 1 to the Taxation Administration Act 1953 (TAA) allows us to record or disclose information about you in certain circumstances. For example, it specifically allows us to disclose information about you to the Australian Border Force.

In relation to licensing information, the TAA allows us to disclose information for the purpose of enabling an entity to understand or comply with their tax obligations. ^[45] This includes:

whether another person holds a current excise licence, and
any conditions that apply to their licence.

Information may be disclosed by taxation officers in the performance of their duties and would cover disclosing information:

to a person dealing or proposing to deal with another person in relation to goods subject to excise control, and
provided we are satisfied that disclosure is necessary for the purposes of ensuring the dealing or proposed dealing is in accordance with excise law. ^[46]

Example 2C

You need to find additional storage space for your finished alcohol products and, therefore, need to check that the entity who offers to store your products has a licence to store excisable alcohol products. We can disclose to you whether or not the other entity holds a storage licence.

If we decide that the disclosure is necessary, we must provide the information in writing to the person who requires it. If the matter is urgent, we may advise by phone. However, we must later confirm the information by letter or fax.

A disclosure may be initiated by us or by you when you request information.

Anyone who receives such information should use it only for the purpose for which it was given. Any other use may be unlawful.

Note: The TAA imposes certain obligations on you concerning the on-disclosure of information that affects another person. ^[47] The Privacy Act also imposes certain obligations on you concerning the privacy of information that you have received about an individual. Further information can be obtained from the Office of the Australian Information Commissioner .

Our decision in relation to the disclosure of protected information is not a reviewable decision. However you have the right to make a complaint to the Commonwealth Ombudsman about a range of administrative actions we take or the Privacy Commissioner if you think we have breached the Privacy Act in dealing with your personal information.

For information about your review rights refer to Chapter 8 - Reviews and objections .

When you provide details of the authorised person we should contact if we need to know more about your application, or the operations of your business, you are giving us authority to disclose information. This could be yourself, as the applicant, or another person you nominate.

2.4 PROCEDURES

2.4.1 HOW DO I REGISTER FOR EXCISE?

If you will be making payments of excise duty but do not hold (and are not applying for) an excise licence, periodic settlement permission or movement permission you need to register by completing Registration for excise payments (NAT 16623).

While it is not compulsory to provide an Australian Business Number (ABN) or Tax File Number (TFN) for registration, it will help us to process your application.

If you need an ABN, phone 1300 657 162 for a registration pack. You can send your completed ABN registration form with your completed registration application.

To register for excise, complete a Registration for excise payments (NAT 16623).

2.4.2 HOW DO I APPLY FOR A LICENCE?

If you would like to apply for a licence, you should:

contact us, and
lodge an application form together with all the required supporting documents.

You can contact us via:

the Online Services for Business
phone 1300 137 290
fax at 1300 130 916
email at alcohol@ato.gov.au , or
write to us at

Australian Taxation Office
PO Box 3514
ALBURY NSW 2640

Our staff will:

discuss your particular circumstances with you
give you advice about the appropriate licence or licences
explain how to apply
explain your ongoing obligations as a licence holder, and
provide you with a licence application form.

There is no charge for an excise licence.

How do I lodge an application?

You need to complete the relevant form to apply for a manufacturer or storage ^[48] licence.

Before lodging your application form, make sure you have included the required supporting documents. Your application form contains information to help you work out which supporting documents you must provide. You may also need to complete other excise forms, depending upon your proposed activities.

Supporting documents include:

an accurate plan of the premises that clearly indicates the area for manufacture and/or storage
a Declaration of criminal history particulars (NAT 74815) form, or
a Consent to criminal history record check (NAT 16358), and
an application for permission to move underbond goods.

For more information about movement permissions refer to Chapter 5 - Movement permissions .

You should contact our Licensing staff on 1300 137 290, or email at alcohol@ato.gov.au for advice about the forms and supporting documents that you will need to lodge.

To lodge your completed application form and supporting documents send them to Excise & EEG Client Services via:

the Online Services for Business
phone 1300 137 290
fax at 1300 130 916
email at alcohol@ato.gov.au , or
write to us at

Australian Taxation Office
PO Box 3514
ALBURY NSW 2640

You must not manufacture or store excisable goods before your licence has been granted. ^[49]

We will process your application within 28 days of the date we receive all required information.

2.4.3 HOW DO I CHANGE MY LICENCE DETAILS?

We can amend your licence for changes that do not involve a change of entity. This includes a change of business name (that is your trading name).

A change in composition of a partnership does not affect the continuity of that partnership. Any one or more of the partners may act on behalf of the partnership in notifying changes. ^[50]

You must advise us of any of these changes within 30 days. We will then provide you with an amended licence.

2.4.4 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on licensing matters you can contact us via:

the Online Services for Business
phone 1300 137 290
fax at 1300 130 916
email at alcohol@ato.gov.au , or
write to us at

Australian Taxation Office
PO Box 3514
ALBURY NSW 2640

We will ordinarily respond to electronic requests within 15 business days and finalise private rulings within 28 days of receiving all necessary information. If we cannot respond within 28 days, we will contact you within 14 days to obtain more information or negotiate an extended response date.

2.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO LICENCES?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable alcohol products without a manufacturer licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable alcohol products. ^[51]

If you manufacture excisable alcohol products contrary to the Excise Act or any conditions specified in your licence the penalty is a maximum of two years in prison or 500 penalty units. ^[52]

If you manufacture excisable alcohol products at premises that are not specified in your licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable alcohol products. ^[53]

Keep or store

If you possess or have custody or control of excisable alcohol products without permission the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable alcohol products. ^[54]

False or misleading statements

If you make a false or misleading statement, or an omission from a statement in respect of duty payable on particular goods, to us, a penalty not exceeding the sum of 50 penalty units and twice the amount of duty payable on those goods. ^[55]

Records

If you do not keep, retain and produce records in accordance with section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units. ^[56]

Facilities, etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units. ^[57]

If you do not provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into, and all excisable alcohol products manufactured in, your factory and for taking stock of all material and excisable alcohol products contained in your factory, the maximum penalty is 10 penalty units. ^[58]

Marks and seals

If we mark or seal excisable alcohol products or fasten, lock or seal any plant in your factory and you alter, break or erase the mark, seal, fastening or lock, the maximum penalty is 50 penalty units. ^[59]

2.6 TERMS USED

Excisable alcohol products

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

As these guidelines deal with alcohol products, we have used the term excisable alcohol products.

Excisable alcohol products include:

beer
spirits
premixed drinks known as ready-to-drink (RTD) beverages
brewed beverages that are not beer, and
high strength spirit for non-beverage use, including denatured spirit.

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into the Australian domestic market or for export.

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

Excise return

An excise return is the document that you use to advise us of:

the volume of excisable alcohol products that you have delivered into the Australian domestic market during the period designated on your periodic settlement permission, or
the volume of excisable alcohol products that you wish to deliver into the Australian domestic market following approval. ^[60]

For information about when duty is payable under periodic settlement refer to Chapter 6 - Payment of duty .

Penalty units

Refer to section 4AA of the Crimes Act 1914 for the current value of a penalty unit.

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 written direction is included as a condition of your 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 the Commissioner's 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.

2.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

2.7.1 Excise Act 1901

Section 4 - Definitions

Section 6A - How this Act applies to partnerships

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 39 - Applications for licences

Section 39E - Duration of licences

Section 39O - Death of licence holder

Section 46 - Supervision by officers

Section 49 - Facilities to officers

Section 50 - Record keeping

Section 51 - Collector may give directions

Section 52 - Weights and scales

Section 53 - Responsibility of manufacturers

Section 54 - Liability to pay duty

Section 58 - Entry for home consumption etc.

Section 60 - Persons to keep excisable goods safely etc.

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 62 - Deficiency in duty

Section 77FC - Repackaged beer

Section 86 - Officers to have access to factories and approved places

Section 87 - Power to stop conveyances about to leave an excise place

Section 87AA - Searches of conveyances without warrant

Section 91 - Examine all goods

Section 92 - Seals etc. not to be broken

Section 106 - Samples

Section 117 - Unlawful possession of excisable goods

Section 120 - Offences

Section 159 - Protection of confidentiality of information

2.7.2 Excise Tariff Act 1921

The Schedule

2.7.3 Customs Act 1901

Section 105B - Extinguishment of duty on excise-equivalent goods

2.7.4 Crimes Act 1914

Section 4AA - Penalty units

Section 6 - Accessory after the fact

2.7.5 Criminal Code Act 1995

Section 11.1 - Attempt

Section 11.2 - Complicity and common purpose

Section 11.5 - Conspiracy

2.7.6 Taxation Administration Act 1953

Division 355 - Confidentiality of taxpayer information

Subdivision 355-B - Disclosure of protected information by taxation officers

Subdivision 355-C - On-disclosure of protected information by other people

Excise guidelines for the alcohol industry

	Date:	Version:
	1 July 2013	Original document
	1 July 2015	Updated document
	7 September 2017	Updated document
	21 February 2018	Updated document
	5 August 2019	Updated document
	4 June 2021	Updated document
	9 July 2021	Updated document
	23 December 2021	Updated document
	25 February 2022	Updated document
You are here	1 July 2024	Current document

View full documentBack to top