The ATO has announced it is extending its relaxed excise rules around alcohol repackaging that would normally require a manufacture licence and the payment of duty.
Since March 23 this year, the ATO has not been taking compliance action in certain alcohol repackaging circumstances that would normally require venues to have an excise manufacturer licence and pay excise duty.
It has now extended this support arrangement to January 31, 2021 in recognition of the ongoing impacts COVID-19 is having on the alcohol industry.
This applies to alcohol service venues (for example, clubs, pubs and restaurants) that are allowed to sell takeaway alcohol under state and territory liquor licensing arrangements while they are subject to COVID-19 restrictions. For example, where the four-square metre rule applies or there are limits on the number of patrons allowed in an enclosed space.
Full details on the relaxed excise rules are available on the ATO website at COVID-19 changes – excisable alcohol.
Production of hand sanitiser
Hand sanitiser does not usually attract excise, as its alcohol content has typically been treated (denatured) to make it unfit for human consumption. Denatured spirit may also be suitable for making other commercial cleaning products and can be purchased without restriction.
There are regulatory requirements that apply to the production and use of concessional spirits. You will need to apply for an ATO permit to purchase (undenatured) spirit from licensed manufacturers for use in the commercial production of hand sanitiser.
Distillers who already hold an excise manufacturer licence to produce or distil spirits can, without additional approvals, produce hand sanitiser and report it by using the free-rate tariff item on their Excise return.
If you wish to repurpose existing alcohol, or manufacture alcohol, to supply hand sanitiser manufacturers without incurring an excise liability, simply report that by using the free-rate tariff item on your Excise return. This also applies to supplying other commercial manufacturers with concessional spirits – for example, to produce other cleaning products.
Existing concessional spirit permit holders
The ATO will grant increases to the quantity of spirits that existing permit holders can obtain. You will need to contact them to organise this.
Other excise-licensed entities (for example, breweries) can apply for permission to manufacture or obtain spirit for the purposes of producing hand sanitiser. The ATO will fast-track these applications and aim to process them within 1–2 days.
Once approved, you will report it using the free-rate tariff item on your Excise return.
Other non-licensed entities, such as hospitals, pharmacists, health care practitioners, education institutions, and government institutions can all receive an unrestricted amount of concessional spirits to meet their manufacturing, scientific or medical needs. This does not require a permit.
For new entrants to the market, regulations concerning the safe and proper handling, storage, transport and use of dangerous goods such as spirit, are governed by other relevant local, state and federal bodies. You will need to contact the relevant body in your state or territory for further information.
Takeaway alcoholic beverages
The ATO will not take compliance action in the following alcohol repackaging circumstances that would normally require you to have an excise manufacturer licence and pay excise duty:
- Where alcohol service venues repackage duty-paid kegged beer for takeaway sale in sealed containers (such as growlers).
- Where alcohol service venues use duty-paid alcoholic beverages to make ‘cocktails’ for takeaway sale in sealed containers.
The ATO will review these excise rules in January 2021 to determine whether a further temporary extension is required.
Above: The Palace, South Melbourne. Main: All Nations, Richmond.