04 - LICENSING: Suspension
&
cancellation
4.1 PURPOSE
This chapter deals with:
- what happens when you cease your business
- when your licence can be suspended or cancelled
- service of notices, and
- penalties that can apply to offences in relation to suspensions and cancellations.
4.2 INTRODUCTION
Your licence remains in force until it expires or is cancelled. However, activities approved under your licence may be restricted if we suspend your licence. Suspension may be a temporary measure or may lead to the cancellation of your licence.
We can cancel your licence if:
- you ask us to do so (for example, where you intend to cease business), or
- we make a decision to do so because one or more of the following criteria are present:
- you or an associate are not 'fit and proper' as an individual or company
- a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person
- a person who participates in the management or control of the premises is not a 'fit and proper' person
- you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence
- the physical security of the premises is inadequate
- the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises
- you have no market for the goods covered by the licence
- you are not keeping proper books of account for audit purposes
- you have breached a condition of your licence
- you have made a false or misleading statement to us
- suspension is necessary for the protection of the revenue, or
- if you are the holder of a manufacturer licence or storage licence, suspension is necessary to ensure you comply with excise law.
4.3 POLICY AND PRACTICE
4.3.1 WHAT HAPPENS IF I CEASE MY EXCISE BUSINESS?
Your licence conditions require you to notify us within 30 days if you permanently cease activities that require an excise licence. To finalise your excise obligations you must request in writing a cancellation of your licence.
Before we can cancel your licence we must be satisfied that you no longer have any
tobacco
seed, plant or leaf or
excisable tobacco products
. To be satisfied of this we will:
- arrange a final audit of goods at the licensed premises, and
- work out if you are liable to pay any excise duty.
Although your licence conditions require you to notify us within 30 days of cessation of activities, you are encouraged to notify us at the earliest opportunity. This will enable us to assist you to check your records and any stock on hand prior to closure of the site for excise purposes.
If you want to sell your business with the stock included, we can coordinate your licence cancellation with the licence approval for the new owner. (This does not mean that the new owner will automatically be granted a licence). This will ensure the premises and goods are covered by a licence at all times.
If you do not intend to sell the goods with your business, you can:
- pay any outstanding excise duty on goods held at the licensed premises and then dispose of them as you wish, or
- move the goods to another licence holder's premises, provided you have permission from us to move goods to those premises.
We will cancel your licence by giving you written notice.
4.3.2 WHEN CAN YOU SUSPEND AND/OR CANCEL MY LICENCE?
What is the difference between suspension and cancellation?
Suspension of a licence is a temporary measure we may take that limits the activities you can undertake during the period of suspension. It could be followed by cancellation of the licence or revocation of the suspension. Cancellation is a permanent measure which has the effect of prohibiting you from undertaking the activities for which you were previously licensed.
When can you suspend or cancel my licence?
We can suspend or cancel your licence if we have reasonable grounds for believing:
- you are not 'fit and proper' as an individual or company
*
- a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person
*
- a person who participates in the management or control of the premises is not a 'fit and proper' person
*
- you are an associate of a person or a company that is not 'fit and proper'
*
- you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence
*
- the physical security of the premises is inadequate
*
- the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises
*
- you have no market for the goods covered by the licence
*
- you are not keeping proper books of account for audit purposes
- you have breached a condition of your licence
- you have made a false or misleading statement to us
- suspension is necessary for the protection of the revenue
*
, or
- if you are the holder of a manufacturer licence or a storage licence, suspension is necessary to ensure that you comply with excise law.
*
For an explanation of these criteria, please refer to
section 3.3.1
- Licensing criteria in
Chapter 3
- Licensing: Assessing applications
.
The criteria which have not been the subject of previous considerations are covered below:
- you are not keeping proper books of account for audit purposes. For this criterion, we are assessing your actual record keeping practices during the licence period and whether they are in an adequate state for an audit.
- you have breached a condition of your licence. A breach means you have not complied with a condition. In deciding whether or not to suspend we will take into account the following:
- the severity of the breach
- the circumstances surrounding the breach, and
- what the condition is (i.e. the risk it is addressing).
- you have made a false or misleading statement to us. In considering your initial application the false or misleading statements we take into account are in your application. Once you have been granted a licence we can take any statements (including for example in a return, letter or response to a question) you have made in relation to your excise activities.
- suspension is necessary to ensure you comply with excise law (this only applies to manufacturer and storage licences). Where we consider that you are not complying with your obligations under the Excise Act, for example, if you have been manufacturing excisable tobacco products in contravention of your manufacturer licence.
What happens if you suspend my licence?
If we believe your conduct warrants consideration of suspension of your licence we will generally advise you of our concerns and provide you with an opportunity to rectify the issues identified.
If we decide to suspend your licence, this will be done by serving
a Notice of suspension
. The notice may be served on you, or given to a person who appears to participate in the management or control of the licensed premises.
A
Notice of suspension
will state that, if you want to stop the cancellation of your licence, you must provide us with a written statement, within seven days of the notice being served, giving reasons why your licence should not be cancelled. We will include our reasons for deciding to suspend your licence with the
Notice of suspension
.
The notice will also state when the suspension takes affect, which could be immediately.
When your licence is suspended, unless you have written permission from us, it is against the law to:
- if you are the holder of a producer licence, produce or store tobacco seed, plant or leaf
- if you are the holder of a dealer licence, deal in or store tobacco seed, plant or leaf
- if you are the holder of a manufacturer licence, manufacture excisable tobacco products or keep or store tobacco leaf, or
- if you are the holder of a storage licence, keep or store excisable tobacco products at licensed premises.
During the period of suspension we may give you written permission to:
- keep or store goods at your licensed premises
- carry out a process at your premises, or
- move goods from your premises to another place.
As a result of a suspension, we may:
- require the owner (you or a third party) of tobacco seed, plant or leaf or excisable tobacco products to move the goods from your premises to another place
- require payment of any costs incurred by us as a result of the suspension
- carry out a stocktake so that the total excise liability is known, and
- take control of your licensed premises and any tobacco seed, plant or leaf or excisable tobacco products stored at these premises.
If we suspend your licence we have 28 days to cancel your licence. During this period we can revoke the suspension if you satisfactorily address the issues which led to the suspension. If we revoke a licence suspension we will do so in writing. We may impose additional conditions or allow you to resume your excise activities under the existing conditions.
All decisions relating to the suspension of a licence are reviewable by lodging an objection.
|
| For more information about your review rights refer to
chapter 8
- Reviews and objections
. |
What happens if you cancel my licence?
We can cancel your licence for the same reasons we can suspend your licence.
|
| We can cancel your licence without previously suspending your licence. This may occur where we consider the issues require immediate action. For example systemic delivery of excisable tobacco products without payment of required duty. |
If we cancel your licence we will serve you with a
Notice of cancellation
. If we cancel your licence, you are not permitted to manufacture, store, produce or deal in excisable products or tobacco seed, plant or leaf. You are also not permitted to move excisable goods without our permission.
If we decide to cancel your licence, this will be done by serving
a Notice of cancellation
. The notice may be served on you, or given to a person who appears to participate in the management or control of the licensed premises. We will include our reasons for deciding to cancel your licence with the
Notice of cancellation
.
At the same time, we will serve the owner of the excisable tobacco products (whether that is you or someone else) notice in writing to either:
- pay the duty on the goods, or
- move the goods to another place in accordance with our permission.
| This notice is served in the same manner as the
Notice of cancellation
. |
If the owner does not comply with the notice to pay duty or move the goods, we may remove them from the owner's control. If, after six months, the owner has not:
- lodged a written claim for the goods, and
- paid the duty and other movement and storage related expenses
then we may sell or dispose of the excisable tobacco products.
Dealing with tobacco seed, plant or leaf when a licence is cancelled
If tobacco seed, plant or leaf remains on the premises after cancellation we can give you permission to move it to someone who does have a licence.
If you do not do so, we can seize the tobacco seed plant or leaf as forfeited goods.
|
| If we cancel your licence, you must retain all records that you have been directed to keep, for the period you have been directed.
|
If you are not satisfied with our decision to cancel your licence or dispose of your excisable goods, you can request a review of our decision by lodging an objection.
|
| For more information about your review rights refer to
chapter 8
- Reviews and objections |
Can I apply for another licence if I have had a licence cancelled?
Yes, you can apply for another licence. However we will take the reasons for the cancellation into account when considering any new application.
4.4 PROCEDURES
4.4.1 SERVICE OF NOTICES
Notices of suspension or cancellation and directions to deal with excisable tobacco products will be served either:
- personally or by post
on you, or
- personally on a person who, at the time the notice is served, appears to participate in the management or control of the licensed premises.
4.4.2 WHAT DO I DO IF I NEED MORE INFORMATION?
If you need more information on suspension or cancellation of a licence contact us as follows:
- phone
1300 137 295
- fax
(03) 9285 1168
, or
- write to us at
Australian Taxation Office
PO Box 3001
PENRITH, NSW, 2740
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.
4.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO SUSPENSIONS AND CANCELLATIONS
The following are the penalties that may apply after conviction for an offence.
Produce
If you produce tobacco seed or tobacco plant when your producer licence is suspended, the penalty is a maximum of two years in prison or up to 500
penalty units
.
If you produce tobacco leaf when your producer licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty that would have been payable if tobacco leaf had been manufactured into excisable goods.
Deal in
If you deal in tobacco seed or plant when your dealer licence is suspended, the penalty is a maximum of two years in prison or 500 penalty units.
If you deal in tobacco leaf when your dealer licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty that would have been payable if tobacco leaf had been manufactured into excisable goods.
Manufacture
If you manufacturer excisable tobacco products when your manufacturer licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable tobacco products.
[136]
Keep or store
If you store excisable tobacco products when your storage licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable tobacco products.
If you keep or store tobacco leaf when your manufacturer licence, producer licence or dealer licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty that would have been payable if tobacco leaf had been manufactured into excisable goods.
Remove
If your licence has been cancelled or expired, you must not remove excisable tobacco products on which duty has not been paid, from the premises specified in the licence. The penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable tobacco products.
If your licence has been cancelled or expired, you must not remove tobacco seed or plant from the premises specified in the licence. The penalty is a maximum of two years in prison or 500 penalty units.
If your licence has been cancelled or expired, you must not remove tobacco leaf from the premises specified in the licence The penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty that would have been payable if tobacco leaf had been manufactured into excisable goods.
4.6 TERMS USED
Excisable tobacco 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.
As these guidelines deal with tobacco products, we have used the term excisable tobacco products.
Excisable tobacco products include:
- tobacco
- cigars
- cigarettes, and
- snuff.
Penalty units
A penalty unit is specified in
section 4AA
of the
Crimes Act 1914
and, at the time of writing, is $110.
Tobacco
Tobacco means tobacco leaf subjected to any process other than curing the leaf as stripped from the plant.
This means that until tobacco leaf is subjected to processes after curing it is not excisable.
The species of the
Nicotiana
genus that are generally used for smoking, chewing or snuff are considered to produce tobacco leaf. Those species are currently
Nicotiana tabacum, Nicotiana rusticum
and
Nicotiana sylvestris.
4.7 LEGISLATION (quick reference guide)
In this chapter we have referred to the following legislation:
4.7.1
Excise Act 1901
Section 26
- Licensed manufacturers to manufacture in accordance with Act and licence
Section 39G
- When the Collector may suspend a licence
Section 39J
- Method of suspension
Section 39K
- Activities that are prohibited during suspension
Section 39L
- Cancellation of licences
Section 39M
- Removal of goods on cancellation etc. of licence
Section 39N
- Removal of goods by Collector on cancellation etc. of licence
Section 39P
- Service of notices
Section 39Q
- Review of decisions
4.7.2
Excise Tariff Act 1921
The Schedule
4.7.3
Crimes Act 1914
4AA
- Penalty units
| OUR COMMITMENT TO YOU
The information in this publication is current at August 2008.
This publication is an expression of the Commissioner's opinion on the operation of tobacco excise legislation. This publication is not legally or administratively binding on the Commissioner and is not a 'public ruling' for the purposes of
Section 105-60
or
Division 358
of Schedule 1 to the
Taxation Administration Act 1953
. The law does not provide for legally binding rulings on tobacco excise legislation.
If you feel this publication does not fully cover your circumstances, please seek help from the Tax Office or a professional adviser. Since we regularly revise our publications to take account of any changes to the law, you should make sure this edition is the latest. The easiest way to do this is by checking for a more recent version on our website at
www.ato.gov.au
|
