Excise Regulations (Amendment)

Administered by Department of the Treasury

Legislation au F1996B03074 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

EXCISE ACT 1901

EXCISE REGULATIONS (AMENDMENT)

STATUTORY RULES 1990 NO. 223

ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR SMALL BUSINESS AND CUSTOMS

Section 164 of the Excise Act 1901 (“the Act”) provides in part that “The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to this Act …”

Regulation 175 of the Excise Regulations prescribes the manner in which imported petrol on which customs duty has not been paid may be blended with petrol manufactured in Australia, and then prescribes the manner of calculating the duty payable on the resulting mixture.

Regulations 179 and 180 provide a mechanism by which Customs may audit the practices of brewers, distillers, or manufacturers of excisable goods. The regulations require those persons to provide full disclosure to any questions asked by a Collector or any officer authorised by the Collector in relation to excisable goods (regulation 179) and to produce relevant records on demand (regulation 180).

Section 24 of the Excise Act 1901 provides that excisable goods and goods liable to duties of Customs may, while subject to the control of the Customs, be used in the manufacture of excisable goods in prescribed cases and subject to prescribed conditions. Regulation 2A and Schedule 2 of the Regulations provide the mechanism by which this prescription takes place.

Background

The Statutory Rules effect a number of changes to several of the Excise Regulations, as follows:

a)                   Regulation 175 is repealed on advice from the Attorney-General’s Department that the Regulation may be beyond power;

b)                  Regulations 179 and 180 are amended to extend the disclosure obligations contained in those regulations to any excisable goods or goods liable to duties of Customs that under Section 24 of the Act were used, or are held for use, by the brewer, distiller or manufacturer in the manufacture of excisable goods;


c) Schedule 2 to the Regulations is amended:

i) to omit the reference to “essences or flavourings containing spirits” in item 5 to reflect the fact that the spirit in essences and flavourings is no longer subject to a rate of customs duty which includes an excise duty element, and

ii) to add two new items to the Schedule, one of which effectively transfers the provisions of subregulation 175(1) to Schedule 2 in consequence of the proposed repeal of that regulation and the other to allow the blending of imported and Australian spirit wholly under the excise regime rather than under the present arrangements whereby blending and subsequent duty calculation occurs under a combination of both customs and excise regimes, which is unduly complex.

Details of the amendments are as follows:

Regulation 1: Repeals Regulation 175 on advice from the Attorney-General’s Department that the Regulation may be beyond power because it contains taxing provisions enabling the collection of the difference between the customs duty and the excise duty;

Regulation 2: Amends regulation 179 to extend the disclosure obligations contained in those regulations to any excisable goods, or goods liable to duties of Customs, that, under section 24 of the Act, were used, or are held for use, by the brewer, distiller or manufacturer in the manufacture of excisable goods.

This amendment will ensure that imported goods which are liable to duties of Customs and are entered for use in the manufacture of excisable goods are in fact used in the manufacture of such excisable goods. It is intended to overcome a problem presently experienced of establishing if in fact concessionally entered goods are used in the manufacture of excisable goods.

Item 44 of the Fourth Schedule to the Customs Tariff Act 1987 provides concessional entry for goods for use in the manufacture of excisable goods in terms of section 24 of the Excise Act 1901.

Regulation 3: Amends Regulation 180 in the same way as discussed above in relation to Regulation 179.

Regulation 4: Amends Schedule 2 to the Regulations to:

i) omit the reference to “essences or flavourings containing spirits” in item 5 to reflect the fact that the spirit in essences and flavourings is no longer subject to a rate of customs duty which includes an excise duty element (paragraph 1*1);

ii) add a new item 8 to the Schedule which effectively transfers the provisions of subregulation 175(1) to Schedule 2 in consequence of the repeal of that regulation (paragraph (b));

iii) add a new item 9 to the Schedule to allow the blending of imported and Australian spirit wholly under the excise regime rather than under the present arrangements whereby blending and subsequent duty calculation occurs under a combination of both customs and excise regimes, which is unduly complex.

Regulation 75 of the Customs Regulations allows an owner of imported spirit to blend it in a warehouse with the permission of a Collector. Duty is then payable upon the entry for home consumption of the blended product, based upon the respective proportions of Australian and imported spirit. The duty is calculated on the rates applicable to the equivalent spirits under both the Excise Tariff Act and Customs Tariff Act.

The new item 9 specifies the usual conditions for permitting such blending; viz, the manufacturer must be the holder of a requisite licence; but also requires that:

the imported spirit must be blended with spirits of a like kind which have been distilled in Australia (item 9 Conditions (2Wa) and fb)); and

the blended product must contain a greater proportion of Australian spirit than imported spirit (item 9 Condition U1).

These additional conditions will enable current industry practices to be met and a high level of Customs control to be maintained.

 

Overview

The Excise Regulations (Amendment) Statutory Rules 1990 No. 223 were enacted to address various issues within the administration of excise duties and customs regulations, as outlined under the Excise Act 1901. Issued under the authority of the Minister of State for Small Business and Customs, these amendments were designed to ensure compliance and simplify the regulatory framework governing the blending of imported and Australian spirits, as well as to extend disclosure obligations for excisable goods. Regulation 175, which had been identified as potentially beyond the power of the Act, was repealed. Meanwhile, Regulations 179 and 180 were amended to broaden the scope of disclosure requirements, ensuring that any excisable goods or goods liable to customs duties used in the manufacture of other excisable goods are fully disclosed and documented. Additionally, Schedule 2 was revised to remove outdated references and to introduce new provisions that allow for more straightforward blending and duty calculations under the excise regime alone. The amendments aim to address the complexity of the current system and to provide clearer guidelines for industry practices while maintaining robust customs controls.

Scope and Application

The Excise Act 1901 applies to the regulation of excisable goods, including their manufacture, storage, and distribution, as well as the imposition of excise duties on certain goods. The Act applies to individuals and entities involved in the production, import, or distribution of excisable goods, which include items such as tobacco products, alcohol, and petroleum products. The Act operates on a national level, with regulations and amendments being issued by the Commonwealth Government. The Excise Regulations, as amended by the Statutory Rules, outline the specific mechanisms and conditions for the application of excise duties, including blending provisions for petrol and spirits, and audit mechanisms for manufacturers of excisable goods. The regulations also specify conditions for the use of goods liable to customs duties in the manufacture of excisable goods, ensuring compliance with both excise and customs requirements. Notably, certain provisions have been repealed or amended to address legal concerns and simplify regulatory processes, particularly in relation to the blending of imported and Australian spirits under the excise regime.

Key Provisions

The Excise Regulations (Amendment) Statutory Rules 1990 No. 223, issued under the authority of the Minister of State for Small Business and Customs, primarily amend existing regulations to address certain operational and legislative concerns. Regulation 175, which previously prescribed the manner in which imported petrol not subjected to customs duty could be blended with Australian-manufactured petrol, has been repealed (Section 1). This repeal was recommended by the Attorney-General’s Department, which indicated that the regulation might exceed its legislative authority by containing provisions that enable the collection of the difference between customs duty and excise duty. Regulations 179 and 180 have been amended (Sections 2 and 3) to extend the disclosure obligations of brewers, distillers, and manufacturers of excisable goods to include any excisable goods or goods liable to customs duties that were used or held for use in the manufacture of excisable goods under Section 24 of the Excise Act 1901. This amendment aims to ensure that goods entered for manufacturing use are indeed used in such a manner and to address the current challenge of verifying this use. These amendments impose specific obligations on brewers, distillers, and manufacturers of excisable goods. They are now required to provide full disclosure to questions posed by a Collector or authorised officer regarding any excisable goods or goods liable to customs duties used in manufacturing (Regulation 179). Additionally, they must produce relevant records on demand (Regulation 180). These obligations extend to any goods that were used or are held for use in the manufacture of excisable goods under Section 24 of the Act. Schedule 2 to the Regulations has also been amended to omit references to “essences or flavourings containing spirits” and to add new items. The omission reflects the fact that the spirit in essences and flavourings is no longer subject to a rate of customs duty that includes an excise duty element. New items have been added to facilitate blending of imported and Australian spirit under the excise regime and to transfer the provisions of subregulation 175(1) to Schedule 2 following its repeal. Breaches of these regulations may result in various consequences. While the specific penalties for non-compliance are not detailed in the text, breaches of the Excise Act 1901 and related regulations can typically lead to civil or criminal penalties. Civil penalties may include fines and the possibility of restitution, while criminal penalties can include imprisonment, depending on the severity and intent of the breach. The specific penalties would be determined by the courts based on the nature and extent of the breach, in accordance with the provisions of the Excise Act and other applicable laws.

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Customs Law
Excise Law
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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.