The Australian Tax Office (ATO) has announced that the flexible tax rules introduced last year for take-away alcoholic beverages and the manufacture of hand sanitizer will no longer apply from February 1st.
During the COVID-19 restrictions and bans last year, a number of state and territory governments relaxed liquor licensing requirements so that venues can sell alcoholic beverages to go.
The ATO assisted the companies by allowing flexibility in the repackaging of alcohol in certain situations that would normally have required a license from the excise manufacturer and the payment of excise duty. However, from February 1, these pre-COVID agreements will resume.
The ATO website states: “Packaging is generally not a manufacturing process for excise purposes. However, the manufacture of beer has an expanded meaning when you repackage dutiable beer entered at a preferential price. This can include filling growlers. The excise duty rate for commercial beer is based on: alcohol content, the size of the beer and the design of the container in which you pack it.
“If you want to continue repackaging alcohol for sale in sealed take-away containers after January 31, 2021, you must apply to us for the appropriate excise license and permit.”
In addition, the ATO relaxed and streamlined excise duty and licensing rules for the manufacture, supply, and use of alcohol for hand sanitizer in response to increased demand for the product.
From February 1, 2021, these excise license and permit rules will revert to normal.
The ATO said: “Hand sanitizers do not usually attract excise taxes as their alcohol content has usually been treated (denatured) to make it unfit for human consumption. Denatured alcohol can also be used to manufacture other commercially available cleaning products and can be purchased without restriction.
“There are legal requirements for the production and use of concession petrol. You must apply for an ATO permit to purchase alcohol (non-denatured) from licensed manufacturers for the commercial manufacture of hand sanitizer. “
Distilleries that already have an excise duty manufacturer license to produce or distill spirits can produce hand sanitisers and report them on their excise tax return using the free tariff item. However, you must have a concession permit issued by ATO.
Existing liquor discount holders must contact the ATO to organize changes to the amount of liquor they wish to receive.
Other excise companies such as breweries that want to produce their own spirit for the purpose of making hand sanitizer must apply to the ATO to change their license. You also need an ATO permit to use alcohol to make hand disinfectants. The ATO said it intends to prioritize these applications.
For detailed information on tax and excise duty changes, see the ATO website.
In the meantime, just before Christmas, the federal government announced that it would reduce the administrative costs of alcohol consumption.
On December 22, Deputy Treasurer Michael Sukkar said the Morrison administration would “review Australia’s excise and excise-equivalent customs regimes to identify unnecessarily cumbersome and duplicate processes” by running a new deregulation task force.
The comprehensive review will seek ways to reduce regulatory overheads for businesses and support new investments in beverage manufacturing. However, the Task Force will not deal with the base or tax rates for excise duties.