Notice of Substituted Rates of Excise Duty Notice No. 1 (2024)

Overview

The Excise Tariff Act 1921 was enacted by the Commonwealth Parliament to establish a framework for imposing excise duties on certain goods within Australia. This legislation was introduced to address the need for a structured and regulated system for collecting excise duties on goods such as alcohol and tobacco, which are subject to specific taxation to discourage consumption and raise revenue for the government. The Act provides the legal basis for setting and varying excise duties on a range of goods as outlined in its schedule. This notice, issued under the authority of the Excise Tariff Act 1921, serves to inform stakeholders of the updated rates of excise duty effective from 5 February 2024, as determined by the delegate of the Commissioner of Taxation. The policy objective behind these adjustments is to ensure the excise system remains effective in achieving its fiscal and regulatory goals.

Scope and Application

The Excise Tariff Act 1921 applies to individuals, businesses, and entities involved in the production, importation, and supply of goods subject to excise duty in Australia. This includes industries producing alcoholic beverages, tobacco products, and certain other goods as specified in the Schedule to the Act. The Act imposes excise duties on these goods, with the rates determined by the Excise Tariff Act and modified by notices such as this one. The application of the Act extends across the Commonwealth of Australia, ensuring uniformity in excise duty rates and regulations throughout the country. Certain goods may be exempt from excise duty as specified in the Act, and the rates themselves can be altered by the delegate of the Commissioner of Taxation through notices such as this one, which adjusts the rates of excise duty from the specified date. This notice provides updated rates for various excise tariff items, affecting the calculation of excise duty on different types of goods based on their alcohol content and other characteristics.

Key Provisions

The Excise Tariff Act 1921 (the Tariff Act) sets out the rates of excise duty that apply to various goods. Section 6A(9) of the Tariff Act allows the delegate of the Commissioner of Taxation to issue notices substituting the rates of excise duty for goods. In Notice No. 1 (2024), issued under this authority, Tony Poulakis has set out new rates of excise duty for various goods classified under the Tariff Act. Effective from 5 February 2024, these rates will apply to goods listed in the Schedule to the Tariff Act. For example, excise duty on certain types of alcohol will now be $51.63 per litre for alcohol content exceeding 1.15% by volume (item 1.1), and $101.85 per litre for other specified alcohol products (item 2). The obligations imposed by this notice are primarily on manufacturers, importers, and other entities that produce or bring into Australia goods subject to excise duty. These entities must adjust their calculations and pricing to reflect the new rates of excise duty. For example, a brewer who produces beer with an alcohol content exceeding 1.15% must now account for a duty of $51.63 per litre in their pricing structure. Failure to do so could result in underpayment of duty, which may attract the attention of the Australian Taxation Office (ATO) and lead to enforcement actions. Breaches of the Excise Tariff Act can result in significant penalties. For example, under section 176 of the Act, any person who fails to comply with the requirements of the Act, including the payment of excise duty, can be subject to civil or criminal penalties. Civil penalties can include fines up to 200 penalty units ($33,000 as of January 2024) for individuals and up to 10,000 penalty units ($1.65 million) for corporations. Criminal penalties can include imprisonment for up to five years. Therefore, it is crucial that entities subject to the Excise Tariff Act ensure they are compliant with the new rates of duty to avoid these penalties.