Notice of Substituted Rates of Excise Duty Notice No. 2 (2024)

Overview

The Excise Tariff Act 1921 was enacted to establish the framework for applying excise duties on specific goods within Australia. This legislation allows for the imposition of excise duties on goods such as tobacco products, ensuring that the government can collect revenue from these goods, which are often subject to additional taxation due to their potential health and social impacts. The Act was introduced by the Parliament of Australia to address the need for a structured approach to taxing specific goods, thereby aiding in revenue generation and influencing consumer behaviour through tax policy. The 2024 substituted rates of excise duty notice highlights the ongoing legislative intent to adjust tax rates in response to economic conditions and policy objectives, ensuring that excise duties remain effective tools for fiscal policy and public health initiatives.

Scope and Application

The Excise Tariff Act 1921 applies to all exciseable goods produced within Australia and to entities involved in the manufacture, importation, or supply of these goods. The Act sets out the rates of excise duty applicable to a range of goods, including tobacco products, alcohol, and fuel. The substituted rates of excise duty announced in Notice No. 2 (2024) are effective from 1 March 2024, with specific rates set for different items of the Schedule to the Tariff Act. This Act operates at the Commonwealth level, and its application extends to any person or entity engaged in the manufacture, importation, or supply of exciseable goods within Australia. The notice issued under the authority of the Excise Tariff Act provides for the substitution of rates of excise duty, thereby adjusting the financial burden placed on producers and consumers of these goods. The Act allows for the amendment of rates through subordinate instruments, ensuring it can be updated in response to changing economic and fiscal policies.

Key Provisions

The Excise Tariff Act 1921 (Tariff Act) contains a Schedule that lists various items subject to excise duty, with specific rates of duty applied to each item. Notice No. 2 (2024) issued under section 6AA(11) and 6AAB(9) of the Tariff Act informs that, from 1 March 2024, the rates of excise duty for certain items will be substituted as per the table provided in the notice. For example, the substituted rate for goods classified under item 5.1 is $1.27816 per stick, while for item 5.5, the rate is $1893.57 per kilogram of tobacco content. The notice clarifies that the term "item" includes both the item and its subitem. The Excise Tariff Act 1921 imposes specific obligations on parties or entities dealing with goods that are subject to excise duty. The Act requires that the appropriate rate of excise duty, as notified in the Gazette, must be applied to the relevant goods. For instance, manufacturers, importers, and other entities involved in the supply chain of the goods must ensure that the substituted rates of duty specified in the notice are correctly applied. Failure to adhere to the specified rates can result in non-compliance with the Act, potentially leading to legal consequences. Breaches of the Excise Tariff Act 1921 can lead to significant civil and criminal penalties. The Act provides for various offences, including the underpayment or non-payment of excise duty. Under section 18 of the Act, a person who contravenes a provision of the Act, or fails to comply with a notice or direction, can be liable to a penalty. The maximum penalties for offences under the Act include fines that can be substantial, reflecting the seriousness of non-compliance with excise duty requirements. In addition to financial penalties, there may also be criminal consequences for wilful and deliberate breaches, which can result in prosecution and imprisonment. The Excise Tariff Act 1921 also includes provisions for the recovery of unpaid or underpaid duty. Section 20 of the Act allows for the Commissioner of Taxation to recover the unpaid duty, along with any applicable interest and penalties. This ensures that the government can recoup the revenue lost due to non-compliance, thereby maintaining the integrity of the tax system. The combination of financial penalties, potential criminal charges, and the requirement to pay any recovered duty underscores the importance of strict compliance with the provisions of the Excise Tariff Act 1921.