Notice of Substituted Rates of Excise Duty Notice No. 1 (2026)

Overview

The Excise Tariff Act 1921, enacted by the Commonwealth Parliament, was introduced to provide a systematic approach to the imposition of excise duties on specific goods. This legislation serves to ensure a consistent and organised framework for the collection of excise duty on various goods, including alcohol and other excisable items, thereby maintaining revenue streams for the government while regulating the consumption of certain products. The recent Notice No. 1 (2026) issued under the authority of the Excise Tariff Act 1921 by Michael Hughes, the delegate of the Commissioner of Taxation, specifies the substituted rates of excise duty for different excise tariff items, effective from 2 February 2026. This update aims to reflect changes in economic conditions, tax policy, and the need for precise duty rates on various goods to ensure effective revenue collection and compliance with tax regulations.

Scope and Application

The Excise Tariff Act 1921 applies to all goods classified under the Act's schedule, which are subject to excise duty. This encompasses a range of alcoholic goods, specifically those with varying alcohol content percentages, as outlined in the substituted rates notice. The Act's jurisdiction extends nationally across Australia, as it is a Commonwealth Act, applying uniformly across all states and territories. The notice issued under the authority of the Tariff Act specifies the substituted rates of excise duty for different categories of goods, which is effective from 2 February 2026. Certain items within the schedule are exempt from duty, as denoted by a 'Free' rate, which means no excise duty is applicable to those specific goods. Additionally, the application of the Act can be further extended or restricted through subordinate instruments, ensuring flexibility in the application of excise duties.

Key Provisions

The Excise Tariff Act 1921, through Notice No. 1 (2026), sets out new excise duty rates for various alcohol-based goods, effective from 2 February 2026. Section 6A(9) of the Tariff Act mandates the publication of these changes, with specific rates detailed in the accompanying table. For example, the excise duty for goods classified under item 1.1 is $54.74 per litre of alcohol for content exceeding 1.15% by volume (Section 6A(9)). This notice applies to goods specified in Column 1 of the table, with corresponding duty rates listed in Column 2. The Excise Tariff Act 1921 imposes obligations on manufacturers, importers, and distributors of alcohol products to adhere to the specified excise duty rates. These entities must ensure that the correct amount of excise duty is calculated and paid on the alcohol content of their products, as outlined in the notice. For instance, manufacturers of goods classified under item 1.5 must charge $63.75 per litre for alcohol content above 1.15% by volume. This requirement extends to ensuring that all documentation and records accurately reflect these duties, facilitating compliance with the Tariff Act. Failure to comply with the new excise duty rates can result in significant penalties. The Excise Tariff Act 1921 includes provisions for both civil and criminal penalties for non-compliance. Civil penalties can include fines and interest on unpaid duties, with maximum fines often set at multiples of the unpaid duty amount. For instance, under the Act, a person who fails to pay the correct excise duty for goods classified under item 2 could face a fine of up to 200% of the unpaid duty, as stipulated in relevant sections of the Act. Additionally, criminal penalties may apply, leading to imprisonment for serious or repeated breaches.