ATO Interpretative Decision

ATO ID 2005/47 (Withdrawn)

Excise

• This ATO ID is withdrawn because the Excise Regulations 1925 was repealed and replaced by the Excise Regulation 2015 on 26 March 2015. The ATO ID continues to be a precedential ATO view in respect of decisions made on or before 25 March 2015.
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Issue

Is a refund of excise duty allowed under section 78 of the Excise Act 1901 where duty paid spirits or other excisable beverages that have been delivered for home consumption are returned to the licensed premises?

Decision

No. A refund of excise duty is not allowed under section 78 of the Excise Act where duty paid spirits or other excisable beverages that have been delivered for home consumption are returned to the licensed premises.

Facts

A licensee enters excisable goods for home consumption, pays the duty and delivers the goods to a customer.

The licensee takes back the goods which the customer has been unable to sell.

Reasons for Decision

Section 78 of the Excise Act provides that a refund of excise duty may be allowed:

•

In respect of excisable goods generally or in respect of the goods included in a class of excisable goods, and

•

In prescribed circumstances, and subject to such conditions and restrictions (if any), that relate to excisable goods generally or to the goods included in a class of excisable goods.

Subregulation 50(1) of the Excise Regulations 1925 specifies the circumstances under which a refund of excise duty may be made.

While there are specific paragraphs within subregulation 50(1) of the Excise Regulations that provide for the payment of refunds (subject to certain conditions) where beer contained in bulk containers (paragraph (k)), tobacco products (paragraph (h)) and petrol (paragraph (v)) are returned to the manufacturer of the goods, there are no paragraphs within subregulation 50(1) that provide for a refund where spirits and other excisable beverages are returned to the manufacturer.

Therefore, we must consider whether there are any circumstances within subregulation 50(1) of the Excise Regulations that could possibly apply to excisable goods generally where they are returned to the manufacturer. The only circumstance that is relevant in this instance is paragraph 50(1)(c) of the subregulation which requires excise duty to have been paid 'through manifest error of fact'.

There are two ways in which this client may have entered the excisable goods and paid the requisite duty.

Under section 58 of the Excise Act, the licensed manufacturer or owner may make an entry and pay the requisite duty in respect of excisable goods. The goods may then be lawfully removed from the licensed premises.

Under section 61C of the Excise Act, a Collector may give written permission to the owner of excisable goods to deliver those goods from the CEO's control without having entered the goods or paid the duty. Where goods are delivered on this basis, they are deemed under subsection 61C(2) of the Excise Act to have been entered for home consumption on the day on which they are delivered. Where a periodic settlement permission is in place, subsection 61C(3) of the Excise Act empowers the CEO to impose requirements that the owner/manufacturer must satisfy. The CEO normally requires a return to be lodged on a weekly basis detailing all the movements that have taken place under the permission and remitting the duty payable.

Regardless of whether the licensee entered the goods prior to delivering them from the licensed premises, or delivered them under a periodic settlement permission, it is clear that the licensee has entered the goods and paid the requisite duty. The goods have also been shipped from the licensed premises.

The fact that the goods were subsequently returned to the licensed premises does not change the fact that the goods were lawfully cleared from the CEO's control. Therefore, the duty was properly paid and there has not been a manifest error of fact.

Accordingly, it is clear that a refund of excise duty is not allowed under section 78 of the Excise Act on spirits and other excisable beverages. which have been delivered to a customer but are later returned because the customer could not sell them.

Legislative References:
Excise Act 1901
   section 58
   section 61C
   subsection 61C(2)
   subsection 61C(3)
   section 78

Keywords
Alcohol excise
Excise
Excise payments other

Business Line:  Indirect Tax

Date of publication:  18 February 2005

ISSN: 1445-2782