Notice of Substituted Rates of Excise Duty Notice No. 2 (2023)

Overview

The Excise Tariff Act 1921 was enacted to provide for the imposition of excise duties on certain goods within Australia. The Act was introduced to address the need for a structured and systematic approach to the collection of excise duties on specific goods, thereby contributing to the revenue of the Commonwealth. This Act empowers the Commissioner of Taxation to set and adjust the rates of excise duty applicable to various goods. The recent notice issued under this Act, dated 23 February 2023, substitutes the rates of excise duty for certain goods as of 1 March 2023. This notice, issued by Tony Poulakis as a delegate of the Commissioner of Taxation, is pursuant to the provisions of the Excise Tariff Act 1921 and aims to ensure that the applicable rates of duty are updated to reflect current economic and fiscal policies. The objective of this legislative framework is to maintain a consistent and fair system of taxation on specified goods, thereby facilitating effective revenue management and compliance.

Scope and Application

The Excise Tariff Act 1921 applies to individuals and entities that manufacture or import excisable goods in Australia, encompassing a wide range of industries, including tobacco, alcohol, and fuel. The Act sets out the rates of excise duty that are payable on these goods, and the Act's application extends to the entire Commonwealth of Australia. The notice issued under the Act specifies the substituted rates of excise duty for particular goods, which in this instance, relates to tobacco products. These substituted rates are set out in a table in the notice, with each item of the Schedule to the Tariff Act set out in Column 1 of the table and the substituted rate of duty set out in Column 2. The notice is issued by the delegate of the Commissioner of Taxation and has effect from 1 March 2023. The Act provides for the imposition of excise duty on a range of goods, and the substituted rates of duty are set out in subordinate instruments made under the Act. There are no stated exclusions or exemptions in this notice, although the Act may provide for certain exclusions or exemptions in other circumstances.

Key Provisions

The Excise Tariff Act 1921 (Tariff Act) establishes the framework for imposing excise duties on certain goods within Australia. Section 6AA(11) and 6AAB(9) empower the delegate of the Commissioner of Taxation to announce changes in excise duty rates. In Notice No. 2 (2023), Tony Poulakis, as the delegate, specifies new excise duty rates effective from 1 March 2023. The notice identifies the items in the Tariff Act’s schedule and their corresponding new excise duty rates. For instance, excise duty on goods classified under item 5.1 will be $1.16435 per stick, while for those under item 5.5, it will be $1663.36 per kilogram of tobacco content. Item 5.8 will be subject to a duty calculated according to section 6AAC. The Tariff Act imposes specific duties on the parties or entities it governs, requiring manufacturers, importers, or holders of excisable goods to pay the prescribed excise duties. The notice mandates that these new rates be applied from the specified date, ensuring compliance with the updated tariff. Businesses must adjust their pricing and accounting records to reflect the new rates, which may also involve updating their systems and processes to accommodate the changes. Compliance is essential to avoid any legal repercussions or financial penalties. Violating the provisions of the Excise Tariff Act 1921 can lead to various penalties and legal consequences. Under section 179 of the Act, individuals or entities failing to comply with the duty requirements may face civil or criminal penalties. The maximum penalties for offences involving excise duties can include substantial fines, with specific amounts varying based on the nature and severity of the offence. In some cases, criminal charges may be pursued, leading to imprisonment. Therefore, adherence to the Act’s provisions is crucial to avoid these potential consequences.