Excise guidelines for duty free shops

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.

2.2.2 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 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.

2.3 POLICY AND PRACTICE

2.3.1 WHAT TYPE OF LICENCE DO I NEED?

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

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 Customs or visit the Customs website at www.border.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, [28] 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. 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.

2.3.2 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. [30]

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. [31]

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.

2.3.3 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. [33] 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. [34]

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 [35] and Criminal Code [36] 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). [37]

2.3.4 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. [38]

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.

2.3.5 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. [39]

Example: 2A

If we grant a licence on 15 September 2012, it will expire on 30 September 2014.

If we grant a licence on 15 October 2012, it will expire on 30 September 2015.

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 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. Further information is here

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 3 months after the licence holder dies. [40]

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

2.3.7 CAN MY LICENSING INFORMATION BE DISCLOSED?

As well as the protection provided by the 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 Australian Customs and Border Protection Service.

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 1988 (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 .

2.4 PROCEDURES

2.4.1 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. [41]

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 obtain information - company (NAT 7106) form
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 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. [42]

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

2.4.2 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. [43]

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

2.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on licensing matters contact us.

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.

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 5 times the amount of duty on the excisable goods. [44]

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. [45]

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.

2.6 TERMS USED

Excisable goods

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.

Excisable goods include:

tobacco
cigarettes
beer, and
spirits.

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 by the Excise Act.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914. The current value of a penalty unit is on www.ato.gov.au at Penalties

Relevant traveller

For outwards duty free shop purposes - A person who intends to make an international flight or international voyage, whether as a passenger on, or as a member of the crew (or the pilot or master) of an aircraft or ship, [46] or
For inwards duty free shop purposes - A person who has arrived in Australia on an international flight, whether as a passenger on, or as a member of the crew (or the pilot) of, an aircraft and has not been questioned, for the purposes of the Customs Act 1901 , by an officer of Customs, in respect of goods carried on that flight. [47]

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 excise 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 39 - Applications for licences

Section 39D - Conditions of licence

Section 39E - Duration of licences

Section 39O - Death of licence holder

Section 50 - Record keeping

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 61D - Outwards duty free shops

Section 61E - Inwards duty free shops

Section 62 - Deficiency in duty

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 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 Crimes Act 1914

4AA - Penalty units

6 - Accessory after the fact

2.7.4 Criminal Code Act 1995

11.1 - Attempt

11.2 - Complicity and common purpose

11.5 - Conspiracy

Excise guidelines for duty free shops

	Date:	Version:
	1 July 2006	Original document
You are here	1 July 2015	Updated document
	7 January 2022	Updated document
	1 July 2024	Current document

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