Excise guidelines for duty free shops

Under the excise system, control of goods from the time of creation to the point of authorised delivery of the goods into the Australian domestic market, or export, lies with the Commissioner. To maintain this control, the Excise Act requires that excisable goods are not to be moved without permission. [88]

We refer to this form of permission as a movement permission. It is a permission we provide in writing that authorises you to move specified goods from one specified place to another specified place without excise duty being payable. [89] This permission may be subject to conditions.

The permission holder retains responsibility for any excise liability arising on the excisable goods until they are taken up into the stock of the new premises.

5.3 POLICY AND PRACTICE

5.3.1 WHAT DIFFERENT PERMISSION TYPES ARE THERE?

Depending on your circumstances, you may apply for a permission to move specified excisable goods once (single permission) or excisable goods of a particular kind on a continuing basis (continuing permission). Continuing permissions are used where you have a need to move excisable goods in a regular pattern (for example, a delivery each week to the same premises). A single permission is used when movements are not to a continuing or regular pattern to the same premises.

There are four types of movement permission:

Single movement permission (non-export) - a permission to move specified excisable goods from one specified place to another specified place (effective for one movement)
Continuing movement permission (non-export) - a permission to move excisable goods of a kind specified from one specified place to another specified place on a continuing basis
Single movement permission (export) - a permission to move specified excisable goods to a place of export (effective for one movement), or
Continuing movement permission (export) - a permission to move excisable goods of a kind specified to a place of export on a continuing basis.

An export movement permission is not an authority to export. You must obtain this separately from Customs. Excisable goods being exported by relevant travellers do not need a movement permission.

5.3.2 CAN I GET A MOVEMENT PERMISSION?

If you have a licence to store excisable goods, you can be granted a movement permission.

5.3.3 WHAT IS INCLUDED IN A MOVEMENT PERMISSION?

Each movement permission we approve contains three parts:

1. The permission

This specifies

the permission holder.

2. The conditions

Movement permissions can be subject to conditions that are necessary to protect the revenue or ensure compliance with the Excise Act. In general, the conditions listed below are considered necessary to do that.

As a standard condition, you must provide to both the despatching and receiving premises a consecutively numbered document with each movement of goods that specifies:

the despatching premises and destination
the date of despatch
the number and type of packages
a description of the goods
a statement that the goods are underbond , and
any other information necessary to permit the goods to be dealt with at the destination.

A condition can also have a restriction limiting the volume of goods that can be moved within a specific period of time, or at any one time.

3. The schedule

This specifies:

the premises from which the goods can be removed
the premises to which the goods can be moved
the goods by tariff item that can be moved under the permission, and
for single movement permissions, the period or dates in which the goods may be moved.

If you own both the licensed premises between which goods are being moved, the schedule may not specify all these details but only that any movement of goods between premises licensed to you is approved.

The type of goods may be expressed generally (for example 'excisable goods', or 'excisable tobacco products') or specifically, by tariff item number or description.

A single movement permission will specify the kind and quantity of the goods that can be moved, for example 20 (outer cartons) x 20 (inner packs) x 250 cigarettes = 100,000 sticks classified to subitem 5.1 in the Schedule to the Excise Tariff Act.

5.3.4 DOES THE RECEIVING PREMISES HAVE TO BE LICENSED?

Generally, the receiving premises should be licensed. However, we may authorise underbond movement of goods to an unlicensed 'specified place', for example a waste destruction facility.

5.3.5 WILL I NEED TO PAY A SECURITY?

Prior to granting a movement permission, we may also require you to provide a security to protect the revenue or ensure compliance with the Excise Act. Even if we don't require a security prior to the granting of the movement permission, we may ask for a security at a later time. We can also ask you to increase the value of any security you may already have given. [90]

A security can be a bond, guarantee, cash deposit or similar financial product for an amount of money which may be forfeited if there is a failure to comply with the Excise Act. It is not necessary for a liability to arise as a result of the failure to comply, for the security to be forfeit. There is no statutory limit to the amount of a security but the amount is generally set by reference to the level of revenue at risk.

As part of assessing your application for a movement permission, we will decide whether you must provide a security. We will take into account:

whether you currently hold an excise licence
whether the despatching and receiving premises are licensed
the type of goods involved
the amount of the liability on the goods
the tax compliance record of
- the applicant for the permission
- the despatching premises
- the receiving premises, and
the susceptibility of the goods to be lost or diverted into home consumption without the payment of duty.

We cannot apply these securities against other tax debts.

We review securities linked to continuous movement permissions every three years, at which time they may be extended, revised or cancelled. Compliance with a single movement permission is assessed on completion of the movement of the excisable goods covered by the permission.

The decision to require a security is not reviewable under the objection process. However, there may be other avenues for review, for example, you may seek an informal review of our decision.

For information about your review rights refer to Chapter 10 - Reviews and objections.

5.3.6 WHAT HAPPENS WHEN MY MOVEMENT PERMISSION IS GRANTED?

When your movement permission is granted, it will be sent to you. You can then move your goods in accordance with the schedule. You will need to keep appropriate records to track the movement of your goods.

5.3.7 WHAT ARE MY RESPONSIBILITIES?

Where you have had possession, custody or control of goods we may request you (the permission holder) to account for the goods. If you are able to demonstrate that the goods have been lawfully moved under a movement permission, this will be considered a satisfactory accounting. It is important that you keep good records of any movements of goods both to and from your premises.

If you cannot satisfactorily account for the goods or failed to keep them safe, we may demand an amount equal to the duty that would have been payable on the goods. [91]

The permission holder is accountable for the goods:

from the time they are removed from the despatching premises, and
until they are delivered to the receiving premises.

Accountability then transfers to the receiving premises. If there is a discrepancy between the quantity shown in the delivery documentation and the physical quantity received you should contact us.

In the exceptional case where the goods are moved to unlicensed premises, accountability for the goods remains with you, as the permission holder.

5.3.8 WHAT HAPPENS IF MY APPLICATION IS NOT APPROVED?

If we do not approve your application for a movement permission, or to amend your existing movement permission, we will notify you in writing. If you are not satisfied with our decision, you can ask us to review it. You will not be able to move the goods to the place nominated in the application.

For information about your review rights refer to Chapter 10 - Reviews and objections

5.3.9 WHEN AND HOW CAN A MOVEMENT PERMISSION BE REVOKED OR CANCELLED?

A continuing permission remains in effect until it is cancelled. [92]

We can cancel your movement permission if:

you ask us to do so
we consider that there is a risk to the revenue, or
we have cancelled the licence of the receiving or despatching premises.

If we decide to cancel your movement permission, we will notify you in writing. The cancellation will take effect from the time:

you are served with the cancellation notice, or
specified on the cancellation notice.

A decision to revoke or cancel a movement permission is not a reviewable decision. However, there may be other avenues for review, for example, you may seek an informal review of our decision.

For information about your review rights refer to Chapter 10 - Reviews and objections .

5.4 PROCEDURES

5.4.1 HOW DO I APPLY FOR A MOVEMENT PERMISSION?

To apply for a movement permission, you should complete the relevant form, available on our website.

If you do not have control of the proposed receiving premises (licensed or unlicensed), we require you to obtain a letter from the operator of these premises stating that they will accept responsibility for the underbond goods when received. The application forms contain details of the statement required from the operator of the receiving premises.

If you need to deliver goods to new premises within specified periods please ensure that you allow sufficient time for your application to be determined. Generally, we will make a decision on your application within 28 days unless we need further information.

5.4.2 HOW DO I AMEND MY CONTINUING MOVEMENT PERMISSION?

If you wish to amend your existing continuing movement permission (for example, change the schedule of receiving premises), you must send us either:

a new application form with the amending details, or
a letter including the permission number and necessary changes.

If you wish to add new receiving premises to your existing permission, you must also provide us with a letter from the operator of the receiving premises accepting responsibility for the underbond goods when received. The application form contains details of the statement required from an operator of the receiving premises.

We will consider your request and send you a new or amended permission if approved. In the meantime you cannot move goods outside your current permission.

5.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on movement permissions contact us.

5.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO MOVEMENT PERMISSIONS?

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

Move

If you move excisable goods without a movement 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. [93]

If you move excisable goods contrary to your movement 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. [94]

5.6 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

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, [95] or
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. [96]

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.

5.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

5.7.1 Excise Act 1901

Section 4 - Definitions

Section 16 - Right to require security

Section 17 - Form of security

Section 18 - General security may be given

Section 19 - Cancellation of bonds

Section 20 - New sureties

Section 21 - Form of security

Section 22 - Effect of security

Section 60 - Persons to keep excisable goods safely

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

Section 61D - Outwards duty free shops

Section 61E - Inwards duty free shops

Section 117A - Unlawfully moving excisable goods

5.7.2 Excise Tariff Act 1921

The Schedule

5.7.3 Crimes Act 1914

4AA - Penalty units

5.7.4 Acts Interpretation Act 1901

Section 33 - Exercise of powers and duties

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

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).