Notice of Substituted Rates of Excise Duty Notice No. 2 (2025)

Overview

The Excise Tariff Act 1921 was enacted to establish and regulate excise duties on certain goods in Australia, addressing the need for a structured and consistent approach to taxation on these items. This Act provides the legal framework for the imposition of excise duties, enabling the government to generate revenue and regulate consumption of specified goods. The Act was passed by the Australian Parliament with the objective of providing a clear and systematic method for calculating and collecting excise duties on goods such as tobacco and alcohol. The Excise Tariff Act 1921 includes provisions that allow for the adjustment of excise duty rates, as demonstrated in the recent Notice No. 2 (2025). Issued by Michael Hughes, as the delegate of the Commissioner of Taxation, this notice informs of the substituted rates of excise duty effective from 1 March 2025, adjusting the duty rates for specific goods as set out in the Schedule of the Act. This regulatory update serves to maintain the relevance and effectiveness of the excise duty system in line with contemporary economic and fiscal policies.

Scope and Application

The Excise Tariff Act 1921 applies to the imposition of excise duties on goods in Australia. The Act is administered by the Commissioner of Taxation, or their delegate, who has the authority to set and adjust the rates of excise duty as necessary. The notice issued under this Act specifies the rates of excise duty applicable to particular goods as classified under the Schedule of the Act, which is subject to change as communicated through official notices. These rates affect various entities involved in the production, importation, and sale of the specified goods, including manufacturers, importers, and distributors. The notice applies across the entire Commonwealth of Australia, thereby affecting industries and transactions nationwide. While the Act broadly applies to the goods listed in the Schedule, it does not specify exclusions, exemptions, or thresholds in this notice, but such details are typically addressed in other sections of the Act or in accompanying subordinate legislation. The flexibility of the Act allows for adjustments through additional notices or instruments to respond to economic conditions or policy changes.

Key Provisions

The Excise Tariff Act 1921 provides a framework for setting the excise duty on specific goods, and in this instance, Notice No. 2 (2025) amends the rates of excise duty applicable from 1 March 2025. Section 6AA(11) and 6AAB(9) of the Tariff Act empower the delegate of the Commissioner of Taxation to issue such notices, and this particular notice adjusts the rates for goods listed in the schedule of the Act (Section 5). For example, excise duty for goods classified under item 5.1 is set at $1.40312 per stick, while for goods under item 5.5, the duty is $2,158.65 per kilogram of tobacco content. Item 5.8’s duty is calculated using a formula specified under section 6AAC. The Act imposes obligations on the entities and individuals involved in the manufacture, importation, or supply of excisable goods. Manufacturers and importers must ensure compliance with the new excise rates, which involves adjusting their accounting and tax reporting processes to reflect these changes. This includes maintaining accurate records of goods produced or imported, as well as reporting and paying the correct amount of duty as stipulated in the notice. Failure to comply with these obligations can lead to legal and financial repercussions. Breaching the provisions of the Excise Tariff Act 1921 can result in both civil and criminal penalties. For example, under section 161 of the Act, a person who knowingly or negligently fails to comply with any of the requirements of the Act may be liable to a penalty of up to $22,200 for a corporation and $4,440 for an individual. In more severe cases, especially where there is intent to defraud or deceive, criminal charges may be brought, leading to fines and imprisonment. The severity of the penalty often depends on the nature and extent of the breach, as well as any previous convictions.