ATO clamps down on ‘illicit’ alcohol

The Australian Tax Office has issued a warning to retailers about ‘illicit alcohol’ entering the market.

The ATO is investigating situations where alcohol is entering the Australian market without the payment of the required excise duty, which it calls ‘illicit alcohol’.

It says that a feature of these “arrangements” is that alcohol can subsequently be sold at a greater profit or for a lower price than similar products, thus creating an unfair competitive advantage.

In response to the instances of illicit alcohol being sold, the ATO is contacting retailers about their obligations to sell and purchase alcohol that has the correct duty paid.

The tax office is undertaking audits of companies “exhibiting behaviours which suggest non-compliance with the law”, issuing demands for unpaid excise duty and urging anyone with any suspicions or who has been solicited by companies offering “suspiciously cheap” alcohol.

To retailers, the ATO suggested that they check excise rates, check the credentials of new suppliers, be alert to commercially unrealistic prices and correct labelling, and ensure that manufacturers hold ATO-issued licences.

“We take these illicit alcohol manufacturing and distribution behaviours very seriously and impose substantial penalties. In the most serious cases, we make referrals to the Commonwealth Director of Public Prosecutions for criminal prosecutions,” the ATO said.

The alert comes following a survey by Queensland Health that found that only 20 per cent of samples it tested returned acceptable levels of variance of alcohol.

It suggests that, knowingly or not, brewers were sending alcohol products into the market with variable alcohol content from what was indicated on the label, with implications for excise obligations.

Further information can be found on duty-unpaid alcohol here, or you can contact the ATO here.

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