Notice of Substituted Rates of Excise Duty - Notice No. 4 (2017)

Overview

The Excise Tariff Act 1921 was enacted to establish and regulate the rates of excise duty on certain goods within Australia. This legislation was introduced to address the need for a structured and systematic approach to the taxation of specific goods, ensuring a consistent and equitable imposition of excise duties. The Excise Tariff Act 1921 was enacted by the Parliament of Australia and serves to set out the rates of duty applicable to various goods, with the policy objective of generating revenue for the government while also discouraging the consumption of certain products through increased taxation. In 2017, an amendment was made through the Excise Tariff Amendment (Tobacco) Act 2016 to adjust the rates of excise duty on tobacco products, as reflected in the Notice of Substituted Rates of Excise Duty issued under the authority of the Excise Tariff Act 1921.

Scope and Application

The Excise Tariff Act 1921, as amended, governs the imposition of excise duties on certain goods in Australia, including tobacco products. The notice provided under this Act specifies changes to the rates of excise duty applicable to goods listed in the Schedule to the Tariff Act. This notice, issued by the delegate of the Commissioner of Taxation, adjusts the excise duty rates for tobacco products, effective from 1 September 2017. Specifically, it substitutes the previous rates with new rates for goods classified under item 5.1, which pertains to a duty of $0.69858 per stick, and item 5.5, which pertains to a duty of $901.39 per kilogram of tobacco content. The Act applies to the goods listed in its Schedule, which include tobacco products, and the changes are effective across the Commonwealth of Australia. The application of the Act is not limited by state or territory boundaries, ensuring a uniform imposition of excise duties nationwide. The notice does not specify exclusions or exemptions, implying that all goods classified under the specified items are subject to the new rates unless otherwise provided by subordinate instruments.

Key Provisions

The Excise Tariff Act 1921 (the Tariff Act) outlines the excise duty rates for various goods, including tobacco products. Section 6AA and 6AAB allow for the amendment of these rates. In Notice No. 4 (2017), dated 17 August 2017, the delegate of the Commissioner of Taxation, Rajitha Srikhanta, announced changes effective from 1 September 2017. Specifically, section 5.1 of the Schedule now imposes an excise duty of $0.69858 per stick of tobacco, while section 5.5 imposes a duty of $901.39 per kilogram of tobacco content. These changes are detailed in a table within the notice, clearly indicating the new rates. Entities and individuals involved in the production, importation, or sale of tobacco products must adhere to the updated excise duty rates specified in the notice. The new rates require them to adjust their pricing and accounting practices to reflect these changes. Manufacturers and importers must ensure that their excise duty calculations are based on the new rates, while retailers must be prepared to charge the updated duty on sales of tobacco products. Failure to comply with the new excise duty rates can result in significant legal and financial consequences. Under the Excise Tariff Act 1921, non-compliance may be considered an offence. The Act provides for both civil and criminal penalties for breaches. For example, civil penalties may include fines up to a maximum of 10,000 penalty units, which is currently equivalent to approximately $1.7 million, or three times the value of the excise duty evaded, whichever is greater. Additionally, criminal penalties can apply, including fines of up to 5,000 penalty units and imprisonment for up to five years for serious or repeated offences. These stringent penalties underscore the importance of compliance with the updated excise duty rates.