Excise Amendment Regulations 2000 (No. 5)

Administered by Department of the Treasury

Legislation au F2000B00290 Regulations Not in force Legislative Instrument

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Excise Amendment Regulations 2000 (No. 5) 2000 No. 278

EXPLANATORY STATEMENT

STATUTORY RULES 2000 No. 278

Issued by the Authority of the Assistant Treasurer

Excise Act 1901

Excise Amendment Regulations 2000 (No. 5)

Section 164 of the Excise Act 1901 (the Act) provides that the Governor-General may make regulations prescribing matters required to give effect to the Act or the conduct of any business relating to the Excise.

Section 24 of the Act provides for goods liable to duties of Customs to be used in the manufacture of excisable goods, in prescribed cases and under prescribed conditions.

The Schedule to the Excise Tariff Act 1921 (the Tariff) sets out the items that duties of excise apply to and the rates of duty. The Tariff was amended by a Proposal tabled in the House of Representative on 21 June 2000 to include two new items to impose excise on premixed and designer drinks:

Item 1(D)       Other Excisable Beverages of an alcoholic strength by volume not exceeding 10% with a duty rate of $30.98 per litre of alcohol ; and

Item 2(H)       Other Excisable Beverages of an alcoholic strength by volume exceeding 10% with a duty rate of $52.46 per litre of alcohol.

The Regulations allow goods that fall under the category of other excisable beverages to be manufactured in Australia using imported alcohol, and therefore be subject to excise rather than customs duty on the end product.

There are some other excisable beverages on the market where alcohol (most commonly spirit, but potentially any type of alcohol), is imported and then blended in a Customs licensed warehouse with non-alcoholic beverages (ie soft drink such as Cola). The alcoholic strength of the spirit is reduced by mixing it with non-alcoholic beverages, (eg. from a 70% spirit to a 5% pre-mixed drink). This effectively changes the final duty rate applicable, but there is no mechanism to permit this under the existing Customs legislation. Thus without the Regulations, these goods would be subject to customs duty at the rate that would apply to the imported spirit from which they were made, at the time that spirit was entered into warehouse.

The Regulations in conjunction with appropriate administrative arrangements would facilitate the transfer of control of the process of manufacturing pre-mixed drinks from Customs to Excise without the need for payment of the excise component of the customs duty. Duty at the appropriate rate would then be paid as excise, after manufacture of the pre-mixed drink.

The Regulations apply retrospectively from 1 July 2000. If the Regulations did not apply retrospectively, other excisable beverages manufactured from imported spirit would be subject customs duty at the rate applying to full strength spirit. This would be inequitable with similar products manufactured using only local alcohol. As a consequence, the retrospective commencement of the Regulations is beneficial and will not contravene s.48 of the Acts Interpretation Act 1901.

Details of the amendments are in the Attachment.

Attachment

Excise Amendment Regulations 2000 (No. 5)

Regulation 1 sets out the name of the Regulations.

Regulation 2 specifies that the Regulations are taken to have commenced on 1 July 2000.

Proposed Regulation 3 provides for the Excise Regulations 1925 to be amended as set out in Schedule 1.

Schedule 1 Amendments

Item 1 effectively repeals the definition for beverages containing distilled alcohol. This term became redundant following the introduction of excise for other excisable beverages by Tariff Proposal tabled in Parliament on 21 June 2000.

Item 2 repeals Part VI, Division 1A of the Regulations. This Division specified that brandy could be entered in bulk containers of 25 litres. With the commencement of the Excise Amendment (Alcoholic Beverages) Act 2000 on 1 July 2000, the Chief Executive Officer now has the authority to permit spirits and other excisable beverages to be entered into home consumption in bulk containers having a capacity of more than 20 litres. Division 1 A is therefore no longer required.

Items 3 and 4 amend Item 10 of Schedule 2. Column 2 of Item 10 currently prescribes that spirits that are liable to duties of Customs can be used in the manufacture of other excisable beverages. Condition (3) in Column 3 of Item 10 currently prescribes the condition that the resulting beverage must contain a greater proportion by volume of alcohol manufactured in Australia than of other alcohol.

The amendment made by Item 3 will allow the manufacture of other excisable beverages using any imported excise equivalent alcohol, rather than just spirit.

Item 4 removes the condition which requires a greater portion of Australian made alcohol than imported alcohol, which is restrictive in its application. The removal of this requirement will not disadvantage any local alcohol manufacturers.

 

Overview

The Excise Amendment Regulations 2000 (No. 5), issued under the authority of the Assistant Treasurer, was introduced to address the regulatory gap concerning the application of excise duties on premixed and designer alcoholic beverages. Enacted by the Australian Parliament, these regulations aimed to ensure that the manufacturing process for certain beverages, particularly those involving imported alcohol, would fall under excise rather than customs duties. This was necessitated by the amendment to the Excise Tariff Act 1921, which added new categories of excisable beverages with specific duty rates. The Regulations facilitate the transition of control over the manufacturing process from Customs to Excise, ensuring that the appropriate duty is paid as excise post-manufacture, thus achieving a more equitable tax treatment for such products. The Regulations apply retrospectively from 1 July 2000 to prevent inequity between products manufactured with imported versus local alcohol.

Scope and Application

The Excise Amendment Regulations 2000 (No. 5) amend the Excise Regulations 1925 to allow the manufacture of other excisable beverages using imported alcohol, thereby subjecting these products to excise rather than customs duty. These Regulations apply to entities involved in the production of pre-mixed and designer drinks that incorporate imported alcohol, ensuring that such beverages are taxed appropriately under excise laws. The changes are designed to streamline the tax process by transferring control from Customs to Excise, thereby facilitating the manufacture of these beverages in Australia using imported alcohol. The Regulations apply nationally, extending the reach of the Excise Act 1901 to encompass the specified transactions involving imported alcohol in beverage manufacturing. The Regulations are retrospective, applying from 1 July 2000, to ensure that pre-mixed beverages manufactured using imported alcohol are treated equitably compared to those using locally produced alcohol. This retrospective application does not contravene the Acts Interpretation Act 1901, as it addresses a previously unaddressed scenario in the existing customs legislation.

Key Provisions

The Excise Amendment Regulations 2000 (No. 5) 2000 No. 278, under Section 164 of the Excise Act 1901, establish regulations to enforce the Act and govern the conduct of businesses related to excise duties. Section 24 of the Act allows for goods liable to customs duties to be used in the manufacture of excisable goods, provided they meet certain prescribed conditions. The Excise Tariff Act 1921's Schedule has been amended to include two new items imposing excise on premixed and designer drinks. Specifically, Item 1(D) imposes a duty rate of $30.98 per litre of alcohol for beverages with an alcoholic strength by volume not exceeding 10%, and Item 2(H) imposes a duty rate of $52.46 per litre of alcohol for beverages exceeding 10% strength by volume. The Regulations allow manufacturers to use imported alcohol in the production of other excisable beverages in Australia, subjecting these products to excise duty rather than customs duty. This applies to pre-mixed drinks where imported alcohol is blended with non-alcoholic beverages, such as soft drinks, in a Customs licensed warehouse. The Regulations address a gap in existing Customs legislation by allowing these goods to be subject to excise duty rather than customs duty, ensuring fairness compared to similar products made with locally sourced alcohol. The Regulations also impose certain obligations on the parties involved. Manufacturers must ensure that any imported alcohol used in the production of excisable beverages is appropriately declared and that the resulting products are subject to the correct excise duty. The Excise Tariff Act 1921's amendments and the Regulations together streamline the process of manufacturing pre-mixed drinks by transferring control from Customs to Excise, facilitating the payment of duty at the appropriate rate as excise after manufacture. Failure to comply with these Regulations could result in significant penalties. Under the Excise Act 1901, any person who contravenes the Regulations may be liable to a penalty. The maximum penalties for such offences can be substantial, potentially including fines and, in severe cases, imprisonment. Additionally, businesses that do not adhere to the new duty rates and manufacturing conditions could face financial penalties and be subject to legal action for non-compliance with excise duties.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.