Excise guidelines for duty free shops

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Chapter 7 - Making duty free sales: inwards

Purpose

This chapter deals with:

• making inwards duty free sales
• conditions travellers must be made aware of, and
• penalties that can apply to offences in relation to duty free shops.

7.1 Introduction

In general terms, inwards duty free shops will not pay duty. However, excise duty will be payable when excisable goods are unable to be accounted for (for example, stock shortages).

This chapter focuses on the rules that you need to follow when making duty free sales from an inwards duty free shop.

7.2 Policy and practice

7.2.1 Inwards duty free shops

An inwards duty free shop is authorised to sell airport shop goods which can be excisable or customable goods. The ATO provides authorisation for excisable goods while ABF is responsible for authorisations dealing with imported goods.

Inwards duty free shops sell to relevant travellers who have just completed an international flight from a place outside Australia and are purchasing excisable product prior to clearing the Customs barrier.

Purchases of excisable goods by inward travellers form part of the (Customs) passenger concession. Provided the excisable goods are within the passenger concession limits they remain free of duty. ^[135]

Specific controls on inwards duty free shops exist so that sales can only be made to relevant travellers.

Identifying a 'relevant traveller'

You must not sell goods to a person in your shop unless the person ^[136] :

• is a relevant traveller ^[137] , and
• shows a ticket or other document that confirms that they have arrived in Australia on an international flight.

Mandatory signage

You must prominently display signs that clearly state ^[138] :

• the amount of alcohol products that may be entered for home consumption, by a relevant traveller, free of excise duty, and
• the conditions (if any) under which, for the purposes of the Excise Act, a traveller needs to comply in relation to their purchase.

Internet and telephone sales

You may arrange sales through the internet or phone. You can do so as long as ^[139] :

• the person is, or intends to be, a relevant traveller
• they give details of their intended arrival in Australia (including the flight number or other destination of the international flight)
• you inform the traveller of
  • the amount of alcohol that may be entered free of excise duty, and
  • the conditions (if any) under which, for the purposes of the Customs Act, a traveller is to comply in relation to the purchase of the goods, and
• the agreement is subject to the condition that the sale takes place in the shop, that is the traveller picks the goods up in the shop.

Prior to handing the goods to the traveller, you must sight the ticket or other document for the relevant flight confirming the details provided at the time the agreement was entered into. ^[140]

Record keeping and reporting

What records need to be kept?

You must keep records as specified and may be required to notify us of all sales made to which your permission applies. ^[141]

These records may include:

• sales of excisable product
• stock records for excisable products
• underbond delivery notes for goods received
• underbond delivery notes for goods removed
• copies of approved single movement permissions (SMP) for movement in and out of your licensed premises
• copies of approved remissions, and
• documentation relating to your physical stocktakes.

What reports need to be prepared?

You are not required to prepare any special reports.

7.3 Procedures

7.3.1 What do I do if I need more information?

If you need more information on excise, as it relates to duty free shops, contact us via the Online Services for Business or the other options as listed on the excise and EEG's contact webpage

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.

7.4 What penalties can apply to offences in relation to duty free shops?

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

7.4.1 Move, alter or interfere

If you move, alter or interfere with excisable goods that are subject to excise control, without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable goods. ^[142]

Note: This includes moving underbond excisable goods from your premises to any other location or for export.

If your movement of underbond excisable goods does not comply with the permission to move the underbond excisable alcohol products, the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable goods. ^[143]

7.4.2 Deliver

If you deliver excisable goods into the Australian domestic market contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and five times the amount of duty on the excisable goods. ^[144]

7.4.3 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.

7.4.4 Evade

If you evade payment of any duty which is payable, the maximum penalty is five times the amount of duty on the excisable goods or where a court cannot determine the amount of that duty the penalty is a maximum of 500 penalty units. ^[145]

7.4.5 False or misleading statements

If you make a false or misleading statement to us, the penalty is a maximum of 50 penalty units. ^[146]

Latest update

January 2022

Section

Changes and updates

Throughout

This chapter was updated to take into account the law changes that impacted the tobacco industry, as a result of which, there is no longer excisable tobacco goods manufactured in Australia that would be subject to excise control in the duty free shop or warehouse. The update also reflects the current duty rate and updates the references from the old Business Portal to the new Online Services for Business. Updated to new format and style including footnotes.

Details of previous updates are available through the versions linked to in the table below.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

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