Excise guidelines for the alcohol industry

The Constitution also provides that laws imposing taxation (and excise is a tax) shall only deal with the imposition of tax. The Excise Tariff Act 1921 (Excise Tariff Act) imposes excise on relevant goods manufactured ^[2] in Australia and the Excise Act 1901 (Excise Act) deals with administrative arrangements applying to the excise system.

In Ha & Anor v. State Of New South Wales & Ors; Walter Hammond & Associates Pty Limited v. State Of New South Wales & Ors ^[3] (Ha), the High Court explained a duty of excise as follows:

... duties of excise are taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin. Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods. ^[4]

Excise imposed by the Excise Tariff Act is imposed on goods dutiable under the Schedule to that Act and manufactured in Australia. It can be seen that this clearly fits the definition of duty of excise as described by the High Court in the Ha case.

1.3 OVERVIEW OF EXCISE LEGISLATION

The principal legislative framework for the excise system, relating to alcohol, is contained in the:

Excise Tariff Act 1921 (Excise Tariff Act)
Excise Act 1901 (Excise Act), and
Excise Regulation 2015 (Excise Regulation).

To change the Excise Tariff Act requires an amending Act to be passed through Parliament. There are parliamentary procedures which allow for the modification of the Excise Tariff so that the changes can be implemented immediately. These procedures are known as tariff proposals.

For more information on tariff proposals see Section 1.3.1 - Excise Tariff Act.

1.3.1 Excise Tariff Act

There are three key provisions in the Excise Tariff Act that operate to:

impose excise duty
identify excisable goods and the applicable duty rates (the Schedule), and
index the duty rate.

Imposition of Excise Duty

Section 5 of the Excise Tariff Act imposes excise duty on goods that are dutiable under the Schedule to the Act and manufactured in Australia. Excise duty is imposed at the time of manufacture of the relevant goods. The Schedule lists the various goods that are subject to excise and the rate of duty applicable. It is sometimes referred to as the Excise Tariff.

The schedule of excisable goods and the duty rates

The Schedule to the Excise Tariff Act includes a table that lists the goods that are subject to excise duty (if those goods are manufactured in Australia). The goods that are currently subject to excise fall within three broad groups:

alcoholic beverages (other than wine) and spirits
cigarettes and other tobacco products, and
fuel and oils.

Within those three broad groups the schedule provides eight different items and those items are (in most cases) further broken down into subitems. The table contains a description of the items and subitems and provides the rate of duty applicable to them.

The following is the alcohol products section of the table:

	Tariff Item	Sub item	Unit	Description of Goods	Rate*
	1			Beer
*		1.1	LAL	Beer not exceeding 3% by volume of alcohol packaged in an individual container not exceeding 48 litres	$40.43 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.2	LAL	Beer not exceeding 3% by volume of alcohol packaged in an individual container exceeding 48 litres	$8.08 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.5	LAL	Beer exceeding 3% but not exceeding 3.5% by volume of alcohol packaged in an individual container not exceeding 48 litres	$47.09 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.6	LAL	Beer exceeding 3% but not exceeding 3.5% by volume of alcohol packaged in an individual container exceeding 48 litres	$25.33 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.10	LAL	Beer exceeding 3.5% by volume of alcohol packaged in an individual container not exceeding 48 litres	$47.09 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.11	LAL	Beer exceeding 3.5% by volume of alcohol packaged in an individual container exceeding 48 litres	$33.16 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.15	LAL	Beer not exceeding 3% by volume of alcohol produced for non-commercial purposes using commercial facilities or equipment	$2.84 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*		1.16	LAL	Beer exceeding 3% by volume of alcohol produced for non-commercial purposes using commercial facilities or equipment	$3.28 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15
*	2		LAL	Other excisable beverages not exceeding 10% by volume of alcohol	$79.77 per litre of alcohol
	3			Spirits; Other excisable beverages exceeding 10% by volume of alcohol
*		3.1	LAL	Brandy	$74.50 per litre of alcohol
*		3.2	LAL	Other excisable beverages exceeding 10% by volume of alcohol	$79.77 per litre of alcohol
		3.5	LAL	Spirit that: a person has an approval, under section 77FD of the Excise Act 1901 , to use for fortifying Australian wine or Australian grape must; and is otherwise covered by the approval	Free
		3.6	LAL	Spirit that: is for use by a person who is included in a class of persons determined under section 77FE of the Excise Act 1901 ; and if a quantity is specified in a determination under that section in relation to the person - does not exceed that quantity; and is for an industrial, manufacturing, scientific, medical, veterinary or educational purpose	Free
		3.7	LAL	Spirit that: a person has an approval, under section 77FF of the Excise Act 1901 , to use for an industrial, manufacturing, scientific, medical, veterinary or educational purpose; and is otherwise covered by the approval	Free
		3.8	LAL	Spirit denatured according to a formula determined under section 77FG of the Excise Act 1901 , other than spirit for use as fuel in an internal combustion engine	Free
*		3.10	LAL	Spirits not elsewhere included	$79.77 per litre of alcohol

*Rate of duty as at 2 February 2015. For the current rates of duty, refer to the Schedule under Excise Tariff Working Pages on our website.

Indexation of the duty rate

The rates of excise are set in the Schedule to the Excise Tariff Act. However, section 6A provides that the rates of duty may increase every six months (generally 1 February and 1 August). The amount of any increase is calculated by reference to the All Groups Consumer Price Index published quarterly by the Australian Bureau of Statistics.

These increases are commonly referred to as indexation. We publish these in the Commonwealth Gazette and, for ease of reference, we provide a 'working tariff' which shows an up to date rate taking account of the indexation increases.

Indexation increases also apply to rates set under a tariff proposal.

Tariff proposals

Tariff proposals are a means of changing the Excise Tariff (rates can be adjusted up or down or products can be added or removed) so that it is effective from the time it is proposed rather than after the enactment of an Excise Tariff Amendment Act. Most of the processes relate to Parliamentary procedures, however, there are specific provisions in the Excise Act that provide for the making of tariff proposals when Parliament is not sitting.

Changes to the Excise Tariff can be notified in the Parliament or, if the Parliament is not sitting, by notice in the Gazette. We then apply the proposal as if it is law.

The tariff proposal is required to be validated by an Act within 12 months giving retrospective effect to the date of the proposal.

You cannot commence proceedings against us for any action taken to collect the amount set by the tariff proposal during the periods specified in section 114 of the Excise Act. ^[5]

Effectively, this means you need to pay in line with a tariff proposal. Any increases in rates or introduction of new products through a tariff proposal technically does not impose excise, but we will protect the revenue by collecting amounts in line with the proposal.

If an amending Act validating the changes outlined within the tariff proposal is not passed within the prescribed periods, then any additional amounts will be refunded to you.

1.3.2 Excise Act

The Excise Act imposes controls in two main areas:

manufacture, storage and movement of excisable alcohol products , and
payment of duty for excisable alcohol products.

The Excise Act requires that alcohol not be manufactured outside our control. This is to ensure that the correct amount of duty is ultimately paid or the alcohol is otherwise satisfactorily dealt with. This is achieved by making various activities unlawful and allowing us to grant licences and permission to people to carry on those otherwise unlawful activities.

Manufacture, storage and movement of excisable alcohol products

Before you can manufacture alcohol products you need a manufacturer licence granted under the Excise Act. ^[6]

Before you can store excisable alcohol products that you did not manufacture you need a storage licence granted under the Excise Act. ^[7]

Before you can remove excisable alcohol products on which duty has not been paid, you need permission granted under the Excise Act. ^[8]

Generally we will not grant permission to move excisable alcohol products on which duty has not been paid to a place that is not covered by either a manufacturer licence or a storage licence.

For more information about the excise licensing regime, refer to Chapter 2 - Licensing: Applications .

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

Payment of duty for excisable alcohol products

The Excise Tariff Act imposes duty when excisable alcohol products are manufactured. The Excise Act specifies when the duty must be paid, how and what you must report to us, the relevant time to determine the rate of duty in force, and provides a mechanism to require payment where duty has not been correctly accounted for on excisable alcohol products.

In general terms, duty must be paid on the goods before they are delivered from licensed premises (other than being delivered to another licensed premises). Permission may be granted to deliver the goods prior to paying the duty.

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

1.3.3 Excise Regulation

The Excise Regulation sets out provisions in relation to excisable goods such as:

refunds and remissions, and
drawbacks.

For more information about remissions, refunds and drawbacks refer to Chapter 7 - Remissions, refunds, drawbacks and exemptions .

1.4 WHO ADMINISTERS EXCISE?

The Commissioner of Taxation has the general administration of the Excise Act and the Excise Tariff Act. ^[9] This means you have to deal with the ATO for Australian manufactured alcohol products.

1.5 WHEN AM I INVOLVED IN THE EXCISE SYSTEM?

You are involved in the excise system if you:

manufacture excisable alcohol products;
store or own excisable alcohol products upon which excise duty has not been paid

1.6 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on excise, as it relates to alcohol, contact us via:

the Business Portal

phone on 1300 137 290

fax at 1300 130 916 ,

email at alcohol@ato.gov.au , or

mail to
Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

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

1.7 TERMS USED

Excisable alcohol products

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 in Australia.

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
spirit for non-beverage use, including denatured spirit.

1.8 LEGISLATION (quick reference guide)

In this chapter, we have referred to the following legislation:

1.8.1 Excise Act 1901

Section 4 - Definitions

Section 7 - General administration of Act

Section 25 - Only licensed manufacturers to manufacture excisable goods

Part IV - Manufacturer, storage, producer and dealer licences

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

Section 114 - Time for commencing action

1.8.2 Excise Tariff Act 1921

Section 1A - General administration of Act

Section 5 - Duties of excise

Section 6A - Indexation of rates of duty

The Schedule

1.8.3 Commonwealth of Australia Constitution

Section 90 - Exclusive power over customs, excise, and bounties

Excise guidelines for the alcohol industry

	Date:	Version:
	1 July 2013	Original document
You are here	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
	1 July 2024	Current document

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