Commonwealth Numbered Regulations - Explanatory Statements

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EXCISE REGULATIONS (AMENDMENT) 1997 NO. 340

STATUTORY RULES 1997 No. 340

Issued by the Authority of the Minister for Customs and Consumer Affairs

Excise Act 1901 (C'th)

Excise Regulations (Amendment)

Section 164 of the Excise Act 1901 (the Act) provides that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed for giving effect to the Act or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any business relating to the Excise. The Act applies to certain goods which are produced or manufactured in Australia.

The purpose of the Regulations is to amend the Excise Regulations following the enactment of the Excise Tariff Amendment Act (No. 1) 1997. The Excise Tariff Amendment Act (No. 1) 1997 amended the Schedule to the Excise Tariff Act 1921 (the Tariff Act) to ensure the continuing excisability of all beverages which contain distilled alcohol, including spirits, regardless of their alcohol content.

In November 1994, when Carlton and United Breweries (CUB) commenced the manufacture of the product known as "Subzero Alcoholic Soda", the Australian Customs Service (the ACS) considered this beverage excisable under sub-item 2(H) of the Schedule to the Tariff Act as a spirituous beverage. CUB appealed the decision of the ACS to the Administrative Appeals Tribunal (AAT). The AAT determined that the production of "Subzero", with such a low alcohol content by volume, could not be described as spirituous and was therefore not excisable under sub-item 2(H). The Federal Court upheld the decision of the AAT.

In order to ensure the continuing excisability of all beverages containing distilled alcohol, the Tariff Act has been amended to:

(i) delete all references to "spirituous beverages" in the Schedule and item 2; and

(ii) clarify that excise liability is imposed upon all beverages which contain distilled alcohol (except fortified wine), regardless of the alcohol content (new subitem 2(H) of the Schedule). By removing the term "spirituous beverage" from the Tariff Act, any connotation as to the strength that an alcoholic beverage must be before it is excisable has been removed.

With the passage of these amendments, several amendments have been made to the Excise Regulations to replace all references to "spirituous beverages". Part XX (regulations 224 to 234D) of the Excise Regulations and regulation 244 previously set out the licensing requirements for the manufacture of spirituous beverages and other requirements on the manufacturers of spirituous beverages, such as packaging and labelling requirements. All the references to spirituous beverages in these regulations have been replaced. Items 2 and 5 of Schedule 2 to the Excise Regulations also prescribed circumstances where spirituous beverages may be used with goods subject to duties of Customs in the manufacture of excisable goods (for the purposes of section 24 of the Act) and these references have been replaced.

In particular, each reference in the Excise Regulations to "spirituous beverages' has been deleted and replaced with "liqueurs or beverages containing distilled alcohol". As a corollary to this, the definition of "spirituous beverages" in subregulation 2(1) of the Excise Regulations has been deleted and the new definition of "beverages containing distilled alcohol" has been inserted. These are defined as "beverages that come within sub-item 2(H) of the Schedule to the Excise Tariff Act 1921".

These are technical amendments only and no changes have been made to the licensing requirements or the other requirements which apply to the manufacturers of liqueurs and beverages containing distilled alcohol.

The Regulations commenced on gazettal.