EXPLANATORY STATEMENT
Statutory Rules 1985 No. 141
Excise Regulations (Amendment)
Issued by the Authority of the Minister of State for Industry, Technology and Commerce
The main purpose of the attached regulations is to prescribe, pursuant to section 24 of the Excise Act 1901, the cases and conditions under which beer while subject to control of the Customs may be used in the manufacture of other beer.
The prescribed cases and conditions for beer (specified at Items 2 and 3 as set out in the Schedule to regulation 6) emanate from the revised taxing arrangements for beer as announced by the Treasurer in the 1984/85 Budget Speech.
With effect from 8.00 pm on 21 August 1984 all Australian and imported beers, including those produced as brewed soft drinks, with an alcoholic strength exceeding 0.5% but not more than 1.15% by volume have been subject to the general 20% sales tax rate. From that time the rate of excise duty on beer with an alcoholic strength in excess of 1.15% and up to 3.8% was reduced from 66 cents per litre to 58 cents per litre. The excise duty on beer with an alcoholic strength of more than 3.8% has remained at 66 cents per litre.
By an alcohol evaporation process the higher strength alcohol beers may be used in the manufacture of lower strength alcohol beers. For example, beer with a strength above 3.8% may be used in the manufacture of beers with a strength above 0.5% and up to 1.15% or between 1.15% and 3.8%. Likewise beers with a strength of between 1.15% and 3.8% may be used in the manufacture of beers with a strength between 0.5% and up to 1.15%.
Low alcohol beers can also be produced by adding water to higher strength beers or by producing only to the desired strength.
Following legal advice section 24 of the Excise Act 1901 was amended to place beyond doubt that prescribed excisable goods may be used in the manufacture of other excisable goods in an excise factory without being required to enter for home consumption or pay excise duty.
The amendment to section 24 of the Excise Act 1901 is included in the Statute Law (Miscellaneous Provisions) Act (No. 2) 1984 and came into operation on 22 November 1984.
Details of the attached regulations are as follows:
Regulation 1
Provides the interpretation consequential upon the new Schedule 2 inserted by regulation 2.
Regulation 2
Provides that the cases and conditions under which certain excisable goods, while subject to control of the Customs may be used in the manufacture of other excisable goods are as set out in the new Schedule 2 to the Regulations.
Regulation 3
Has the effect of repealing two now redundant regulations (Regulations 21 and 26) as a consequence of their inclusion at Item 1 in a modernised form in the new Schedule 2 to the Regulations. Item 1 in Schedule 2 permits spirits or spirituous beverages to be used in the manufacture of tobacco, cigars, cigarettes or snuff subject to the conditions specified in Column 3 of the Schedule.
Regulation 4
Repeals Regulation 233 as a consequence of its inclusion in a modernised form at Item 5 in the new Schedule 2 to the Regulations. Item 5 in Schedule 2 permits spirits or essences or flavourings containing spirits to be used in the manufacture of spirituous beverages subject to the conditions specified in Column 3 of the Schedule.
Regulation 5
Amends the heading of the Schedule to the Regulations as a consequence of the insertion of a new Schedule 2 by regulation 6.
Regulation 6
Inserts a new Schedule 2 to the Regulations listing the cases and conditions under which certain excisable goods, while subject to control of the Customs, may be used in the manufacture of other excisable goods. Items 2, 3 and 4 in Schedule 2 set out the cases and conditions in respect of beer and spirits distilled from beer.