Excise guidelines for duty free shops

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Chapter 2 - Licensing: applications

Purpose

This chapter deals with:

• why there is a licensing regime
• what a licence is
• different licence types
• how long a licence is valid for
• whether licences are transferable
• disclosure of your licensing information
• how to register for excise
• how to apply for a licence
• how to change your licence details, and
• penalties that can apply to offences in relation to licences.

2.1 Introduction

2.1.1 Why is there a licensing regime?

The excise duty attached to excisable goods 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.

2.1.2 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 site 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.

A licence is not transferable.

2.2 Policy and practice

2.2.1 What type of licence do I need?

If you are a duty free shop operator, you will require a storage licence (with permission to sell duty free) to store and sell underbond excisable goods.

	Before your storage licence is issued, you will also need a warehouse licence issued under the Customs Act.
	For more information on Customs warehouse licences, you should contact ABF or visit the ABF website at www.abf.gov.au

Duty free shops are different from other licensed premises because they are allowed to display and sell goods that have not had excise paid on them. Your storage licence will specify the type of excisable goods you can store and the location. It will also specify the activities, if any, you can undertake in relation to those goods, ^[25] for example, sell duty free to:

• relevant travellers
• diplomats or consuls, and/or
• sea-going vessels of the Royal Australian Navy (RAN) or Australian Military Forces (AMF).

Paying duty and delivering goods into the Australian domestic market , supplying ship's stores or exporting by other means are not allowed unless specifically authorised in your licence or another permission we have issued you. We will only approve these activities when there is a genuine business need, for example, supplying ship's stores in a remote location where there is no alternative source.

2.2.2 What are my responsibilities as a licence holder?

You are responsible for the secure storage of all excisable goods held on your premises or under your control and must keep or store excisable goods only at premises that are specified in your licence.

You may be responsible for paying an amount equal to the excise duty that would have been payable on any stolen, missing or unaccounted for excisable goods. ^[26]

If you wish to destroy any excisable goods you must first obtain permission from us to do so.

You must not move excisable goods without approval from us. This includes moving excisable goods from your licensed premises to any other location or for export. ^[27]

For more information about obtaining permission to move excisable goods 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.

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

2.2.3 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. ^[28] 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 goods 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. ^[29]

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 goods and that the vehicle has been used, is being used or will be used in the commission of an offence under the Excise Act (and certain offences in the Crimes Act 1914 ^[30] and Criminal Code Act 1995 ^[31] 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). ^[32]

2.2.4 What records do I need to keep?

Unlike other taxation laws, the Excise Act does not have a general record keeping provision. The Excise Act does provide that a licence holder 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. ^[33]

Any such direction will be in writing and included with your licence. We can amend this direction at any time and will provide written notification of this to you.

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.

2.2.5 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. ^[34]

Example 2A If we grant a licence on 15 September 2021, it will expire on 30 September 2023. If we grant a licence on 15 October 2021, it will expire on 30 September 2024.

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.

A storage license differs from a warehouse licence. You must hold a current section 79 ^[35] Customs Warehouse licence for a licensed duty free shop. You must also hold a storage licence to store excisable goods with permission to sell these products duty free.

For more information see Application for a license to store excisable goods with permission to sell duty free .

2.2.6 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. ^[36]

For more information about cancelling licences refer to Chapter 4 - Licensing: Suspension and cancellation.

2.2.7 Can my licensing information be disclosed?

As well as the protection provided by the Privacy Act 1988 (Privacy Act), the tax laws have secrecy provisions about using and disclosing taxpayer information. 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, the Excise Act specifically allows us to disclose information about you to the Department of Home Affairs.

In relation to licensing information, the TAA specifically allows us to disclose information about:

• 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.

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 Privacy Act 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 Australian Information 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 10 - Reviews and objections.

2.3 Procedures

2.3.1 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.

To contact us phone 1300 137 290 .

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 storage licence. ^[37]

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 storage
• a Declaration of criminal history particulars (NAT 74815), 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.
	For more information on how to lodge your completed application form and supporting documents - here.
	You must not store excisable goods before your licence has been granted. [38]
	We will process your application within 28 days of the date we receive all required information.

2.3.2 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)
• postal address, or
• street name or property address made by a relevant authority.

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. ^[39] You must advise us of any of these changes within 30 days. We will then provide you with an amended licence.

2.3.3 What do I do if I need more information?

If you need more information on excise, as it relates to duty free shops, contact us via the Online services for Business or the other options as listed on the excise and EEG's contact webpage .

We will ordinarily respond to written information requests within 28 days. If we cannot respond within 28 days, we will contact you within 14 days to obtain more information or negotiate an extended response date.

2.4 What penalties can apply to offences in relation to licences?

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

Keep or store

If you possess or have custody or control of excisable goods 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 goods. ^[40]

False or misleading statements

If you make a false or misleading statement to us in relation to your licence, the penalty is a maximum of 50 penalty units. ^[41]

Records

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

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).