Excise Concessional spirit approvals guidelines 2016 (No. 2)

The instrument organises decision-making around a small set of core concepts that determine eligibility, limits and administrative obligations. The main concepts in the instrument are:

• Approval to use spirit free of duty: the substantive administrative act the CEO may grant under the Excise Act, limited to spirit delivered under subitem 3.7 of the Excise Tariff Act 1921 (items 4 and 6). The instrument applies only to applications made on or after its commencement (item 4).

• Appropriate and specific purposes: approvals are authorised for “appropriate and specific industrial, manufacturing, scientific, medical, veterinary or educational purposes” (item 6). The instrument then defines negative categories, stating explicitly the activities that do not qualify as appropriate: use as a beverage or in beverage production (unless only an incidental input), use in products consumed for intoxicating effect, use as a fuel or fuel component, and on-supply to another person except where expressly permitted by the CEO (item 6).

• Temporal and quantitative limits: approvals can be framed as once-off quantities, amounts per calendar month, or amounts per calendar year. An approval may have an expiry date, or be ongoing “valid until revoked” (item 6). These options define how exposure of the revenue to duty-free supplies is controlled over time and by quantity.

• CEO satisfaction and risk assessment: the CEO must be satisfied that the spirit will be used for the stated purpose and that it is unlikely to be used for another purpose. The instrument specifies factors the CEO must have regard to in forming that view, including the quantity specified, any conditions attached to the approval, and other matters the CEO considers relevant to reduce revenue risk or ensure compliance (item 6). The instrument also lists illustrative matters the CEO “may take into account” when assessing risk to revenue or the likelihood of compliance (item 6).

• Fit and proper consideration: the instrument identifies “whether an applicant is fit and proper for being entrusted with the spirit” as a factor that may be taken into account, and it gives examples of what that may involve , prior tax compliance history and financial resources (item 6). The instrument also notes that whether the spirit will be used in the course or furtherance of carrying on an enterprise is relevant and that the expression carries the same meaning as in the A New Tax System (Australian Business Number) Act 1999 (footnote to item 6).

• Recordkeeping, storage and accountability: the CEO may consider arrangements for storage and handling, and the applicant’s ability to keep and provide access to appropriate records (item 6). The instrument makes accounting for use a possible post-approval requirement, and failing to account to the CEO’s satisfaction may trigger liability to pay excise duty under subsection 77FH(3) of the Excise Act (item 6 and footnote).

• Reviewability: decisions to refuse an application or to impose conditions on an approval are reviewable decisions under subsection 162C(1) of the Excise Act (item 6). That is the instrument’s express statement about remedies available to applicants dissatisfied with decision outcomes.

• Discretion and open-ended considerations: the instrument repeatedly uses discretionary language , “may take into account,” “other matters the CEO considers to be relevant,” and similar formulations (item 6). This embeds significant administrative discretion in how the CEO applies the listed criteria and in what additional factors the CEO might consider relevant to reduce risks to revenue and ensure compliance.

Together these concepts define an administrative regime that balances authorised duty-free use of spirit for specified non-beverage purposes against revenue protection through qualification criteria, recordkeeping and accountability, and the CEO’s discretion in assessing risk and fit for approval.

The instrument affects a defined but varied group of actors by setting the administrative route for accessing spirit free of excise duty under subitem 3.7 of the Excise Tariff Act 1921. The affected parties include:

• Applicants seeking approvals to receive and use spirit free of duty for the enumerated “appropriate and specific” purposes. These will be persons or entities that want to use spirit for industrial, manufacturing, scientific, medical, veterinary or educational purposes and who must make applications on or after the instrument’s commencement (item 4). The instrument requires applicants to be identified and to supply details about the spirit to be used, so the direct effect is on the entity that files the application (item 6).

• Entities currently holding or intending to hold stock of concessional spirit under subitem 3.7: while the instrument applies to applications received on or after commencement, it replaces the prior 2006 guidelines and thereby alters the framework the CEO will apply going forward (items 3-5). Anyone relying on the prior guideline framework needs to treat the new instrument as the controlling statement of the CEO’s approach for new applications.

• Suppliers and manufacturers who might otherwise on-supply spirit: the instrument expressly disallows on-supply to another person unless the CEO expressly permits on-supply in an approval granted under subsection 77FF(1) of the Excise Act (item 6 and footnote). That limits the ability of a recipient to act as a distributor of duty-free spirit without specific CEO authorisation.

• Organisations that carry on an enterprise that will use spirit in the course or furtherance of that enterprise: the CEO may take into account whether the spirit will be used in the course or furtherance of carrying on an enterprise (item 6 and footnote). The instrument adopts the meaning of that phrase from the A New Tax System (Australian Business Number) Act 1999, so businesses that use spirit as part of their enterprise activities are specifically within the regime’s focus.

• Parties required to keep and provide records and to meet storage, handling and accountability requirements: the instrument highlights that the applicant’s arrangements for storage, handling and recordkeeping are material to the CEO’s risk assessment and that recipients may be required to account for use of spirit (item 6). Those who receive approvals for duty-free spirit will have ongoing compliance obligations with respect to records and possible accounting.

• The Australian Taxation Office (the CEO): the instrument directs the CEO as to the guidelines to be followed in exercising the power under the Excise Act. It thereby affects internal administrative practice, decision-making procedures and the factual inquiries the ATO will conduct in processing applications.

• Persons who would be affected by a refusal or conditions imposed , including those who intend to rely on the concession to lower input costs: applicants who are refused or whose approvals are subject to conditions are affected because the instrument notes that such decisions are reviewable under subsection 162C(1) of the Excise Act (item 6).

• Potentially the revenue: the instrument sets measures (criteria, quantity limits, requirement to account) intended to reduce the risk to excise revenue created by allowing concessional supplies of spirit. While the revenue authority itself is not an applicant, the guidelines affect fiscal exposure by informing how approvals are issued and monitored.

The instrument does not purport to affect people outside the narrow statutory context , for example, it does not create approvals for spirit delivered under other subitems of the Excise Tariff nor does it create new offences. The practical consequence for applicants is that they must engage with the CEO’s assessment framework, provide specified information, and comply with storage, recordkeeping and accounting expectations to obtain and retain an approval for duty-free spirit.

The instrument establishes several duties for applicants and recipients and confers procedural rights relating to administrative review. These obligations and rights are set out below with references to the corresponding provisions of the instrument.

Duties and compliance obligations

• Duty to apply in writing with specified particulars: the instrument states that “Applications for approval should be made in writing and should provide information necessary to enable the CEO to make a decision. This includes the applicant’s identifying details, particulars about the quantity, type and strength of spirit to be used and any other information the CEO considers relevant in making a decision” (item 6). The duty is therefore to lodge a written application containing identifying information and detailed particulars about the spirit sought.

• Duty to keep appropriate records and provide access: the CEO may consider an applicant’s “ability to keep appropriate records, and provide access to those records when required” (item 6). This places an anticipated duty on approved recipients to maintain records adequate to satisfy the CEO’s verification and to provide access upon request.

• Duty to account for use: “A person who receives spirit free of duty under an approval may be required to account for its use” (item 6). Accounting obligations can be imposed as a condition of the approval or through subsequent administrative requirement.

• Potential fiscal liability on failure to account: if a recipient “fails to account to the satisfaction of the CEO, they may become liable to pay an amount equal to the duty that would have been payable on the spirit if there had been no approval” (item 6, footnote citing subsection 77FH(3) of the Excise Act). This is a substantive financial consequence tied to the accounting duty.

• Compliance with any conditions attached to an approval: approvals can be given subject to conditions (item 6). Compliance with those conditions is an ongoing duty; non-compliance may trigger revocation or liability under the Act or related provisions.

Rights and procedural protections

• Right to be considered against stated guidelines: the instrument fixes the list of matters the CEO will follow and take into account when considering approvals. Applicants have the right to expect the CEO to follow these guidelines in decision-making, as the instrument expressly frames such factors as the CEO’s guiding criteria (item 6).

• Right to seek review of refusal or conditions: a decision to refuse an application or to impose conditions on an approval is a reviewable decision under subsection 162C(1) of the Excise Act (item 6). This gives applicants an administrative review pathway against unfavourable decisions.

• Right to a specified approval structure: if the CEO grants an approval, it may be granted for specified amounts (once-off, per month, per year), and it may contain an end date or be ongoing until revoked (item 6). The applicant thereby has a right to obtain an approval of a form that the CEO deems appropriate under the instrument.

Executive discretions that affect duties and rights

• Broad discretionary assessment by CEO: the instrument grants the CEO broad discretion, including to take into account “other matters the CEO considers to be relevant” to reduce risk to revenue or ensure compliance, and to consider whether the applicant is “fit and proper” (item 6). That discretion shapes both the scope of duties an applicant may face (for instance, bespoke conditions) and the protection available through administrative review.

• On-supply rule and express permission: the instrument disallows on-supply except where “expressly permitted by the CEO in an approval” (item 6). This creates a specific right that must be obtained in the approval itself if an applicant wishes to on-supply, and a duty not to on-supply absent express permission.

• Record of application and CEO satisfaction: the CEO must be satisfied as to intended use and lack of likely diversion, having regard to specified factors (item 6). This imposes a substantive evidentiary burden on applicants to demonstrate intended use and controls to prevent diversion.

Taken together, the instrument sets out pre-approval duties (application contents and information), post-approval duties (recordkeeping, storage, accounting, compliance with conditions), and limited procedural rights (reviewability for refusals/conditions). The CEO’s discretion governs how tightly any particular approval will bind an applicant, and the instrument signals that failure to meet accounting obligations may produce a direct duty to pay excise that would otherwise have been levied.

The instrument itself does not create new criminal offences, but it links to statutory enforcement consequences under the Excise Act and to the CEO’s administrative powers. The enforcement and penalty mechanisms the instrument invokes or enables are:

• Monetary liability equivalent to excise duty on failure to account: the instrument explicitly states that a person who receives spirit free of duty may be required to account for its use and that failing to account “to the satisfaction of the CEO” may make the person “liable to pay an amount equal to the duty that would have been payable on the spirit if there had been no approval” (item 6; footnote referencing subsection 77FH(3) of the Excise Act). That is the primary specified monetary enforcement outcome mentioned in the instrument.

• Implicit administrative compliance enforcement: the CEO can impose conditions on an approval. The instrument recognises the CEO’s power to impose conditions and to consider storage, handling, recordkeeping and access arrangements as part of the risk assessment (item 6). While the instrument does not enumerate enforcement steps for breach of conditions, a failure to comply with conditions would be within the CEO’s administrative scope to address, potentially including revocation of the approval (the instrument notes approvals may be ongoing “valid until revoked”) (item 6).

• Revocation power implied: the instrument notes that an approval may be ongoing “valid until revoked” (item 6). The instrument does not set out the procedure or grounds for revocation in detail, but acknowledging that approvals can be revoked implies the CEO has administrative power to terminate approvals where conditions or statutory requirements are not met. The instrument itself does not state the procedures for revocation or any appeal rights specific to revocation; it does, however, state that refusal of an application or imposition of conditions are reviewable decisions under subsection 162C(1) of the Excise Act (item 6), which suggests administrative review pathways exist for certain decisions.

• Review mechanisms for refusal or conditions: the instrument expressly states that a decision to refuse an application for approval, or to impose conditions on an approval, is a reviewable decision under subsection 162C(1) of the Excise Act (item 6). That provides a procedural enforcement check on decisions adverse to applicants, though the instrument does not elaborate procedures or timelines for review,those details are governed by the Excise Act’s review framework.

• Discretionary risk-based scrutiny: the instrument instructs the CEO that, in deciding whether to grant an approval, the CEO may take into account a range of factors relevant to revenue risk and compliance. The instrument lists examples such as prior tax compliance history, financial resources, storage and handling arrangements, and recordkeeping (item 6). This allows the CEO to escalate scrutiny in higher-risk cases, resulting in tighter conditions or refusal.

What the instrument does not do, as far as enforcement is concerned

• It does not create new criminal penalties, express fines beyond the duty-equivalent liability on failure to account, or a bespoke civil penalty regime within the instrument. The instrument’s enforcement references are to existing powers and liabilities under the Excise Act (subsections 77FH(3) and 162C(1)).

• It does not prescribe an exhaustive enforcement process, such as notice periods or thresholds for revocation. The instrument provides the criteria and the CEO’s discretionary matters of inquiry, but detailed enforcement procedures are to be found in the Excise Act and related regulatory instruments, not in this guideline text.

In practice, the primary enforcement leverage signalled in the instrument is financial: recipients who cannot account for duty-free spirit to the CEO’s satisfaction face liability to pay an amount equal to the excise duty that would otherwise have applied. Administrative consequences, including conditions, refusals and revocation, are available to the CEO under the statutory framework the instrument informs.

The instrument is expressly connected to, and operates within the framework of, other pieces of Commonwealth excise and legislative machinery. The instrument creates no standalone law beyond its effect as a legislative instrument under the Legislation Act 2003, but it directs the CEO’s exercise of statutory powers and references specific statutory provisions. The main interactions are as follows:

• Excise Act 1901: the instrument is made under subsection 77FF(5) of the Excise Act and is explicitly framed as guidelines the CEO will follow for purposes of that subsection (item 6). It refers to other provisions of the Excise Act: decisions to refuse applications or impose conditions are reviewable under subsection 162C(1) (item 6), and the footnote cites subsection 77FH(3) as the statutory source of liability to pay duty if a person fails to account for duty-free spirit (item 6, footnote). Therefore, the instrument functions as administrative guidance for the CEO’s exercise of powers and for the application of statutory liabilities and review rights under the Excise Act.

• Excise Tariff Act 1921: the scope of the instrument is limited to applications for approval to use spirit free of duty that is “delivered under subitem 3.7 of the Schedule to the Excise Tariff Act 1921” (items 4 and 6). That means the instrument only governs approvals tied to the particular tariff subitem identified; other tariff subitems or concessions are outside its ambit.

• Legislation Act 2003 (sunsetting provisions): item 5 explains that this instrument replaces and revokes the 2006 guidelines, which were scheduled to be repealed on 1 October 2016 under the sunsetting provisions in Part 4 of Chapter 3 of the Legislation Act. The instrument is therefore responding procedurally to the statutory automatic repeal process by restating the previous instrument and registering a new legislative instrument.

• A New Tax System (Australian Business Number) Act 1999: the instrument uses the expression “in the course or furtherance of carrying on an enterprise” and the footnote confirms that this expression “has the same meaning in this instrument as in” the ABN Act (item 6, footnote). This links the meaning of “enterprise” for the CEO’s assessment to the established definition in another taxation statute, ensuring conceptual alignment across regimes.

• Administrative law and review: the instrument makes certain decisions reviewable under subsection 162C(1) of the Excise Act (item 6). While the instrument does not set out the full judicial review or merits review framework, its linkage to s 162C(1) integrates it with the Excise Act’s administrative review architecture, which governs procedural avenues available to applicants and affected persons.

What the instrument does not do in relation to other laws

• It does not purport to amend the Excise Act, the Excise Tariff Act, the ABN Act, or the Legislation Act. It operates as a legislative instrument under the Legislation Act and as administrative guidance in respect of CEO discretion under the Excise Act.

• It does not define offences beyond referring to pre-existing liabilities under the Excise Act (notably the duty-equal liability on failing to account). Detailed processes for imposition of penalties, criminal prosecution, or infringement notices that may apply under the Excise Act are not set out in the instrument itself.

In short, the instrument is a focused administrative guideline document that sits within the statutory excise architecture, linking CEO decision-making to specific tariff concessions and existing statutory liabilities and review mechanisms, and importing the ABN Act’s meaning of “enterprise” where relevant.

The instrument contains a concise internal amendment history and contextual information about its relationship to earlier instruments:

• Replacement of the 2006 guideline instrument: Item 3 states that this determination commences the day after it is registered and that on commencement it “replaces and repeals Excise concessional spirit approvals guidelines 2006 (No. 1) (which expires on 1 October 2016).” Item 5 reiterates that the 2006 instrument is revoked on commencement of this determination.

• Rationale for restatement: item 5 explains that the new instrument is “a restatement of the previous determination which is scheduled to be repealed on 1 October 2016 under the sunsetting provisions as prescribed in Part 4 of Chapter 3 of the Legislation Act.” That language makes clear the practical driver of the new instrument: to continue the existing guidance framework after the prior instrument would otherwise be repealed by the Legislation Act’s sunsetting mechanism.

• Commencement timing: item 3 sets commencement as the day after registration. The instrument is dated 13 September 2016, which provides the date by which registration and commencement are contextualised, but the instrument itself states commencement is when it is registered.

• No subsequent amendments recorded in the instrument text: the instrument as provided contains only the one-stage change , it replaces the 2006 instrument and comes into force as the controlling guidance for approvals from that point forward. There are no recorded later amendments, savings provisions, transitional arrangements beyond the replacement of the prior instrument, or further repeal dates listed in the text provided.

• Legislative basis and continuity: the instrument cites the enabling provision (subsection 77FF(5) of the Excise Act) as the basis for the guidelines (item 6) and ties the revocation of the prior instrument to the Legislation Act’s sunset provisions (item 5). That situates the amendment history as a technical restatement and continuation of policy guidance rather than a substantive policy shift set out in the instrument.

For practitioners, the practical upshot of the instrument’s amendment history is that it should be treated as the operative guidelines for approvals for duty-free spirit supplied under subitem 3.7 as of its commencement date, and that the earlier 2006 instrument is no longer the relevant guidance for applications made on or after that date. The instrument does not record any subsequent modification or replacement beyond that point.

The instrument itself does not report any litigation history. It makes procedural and substantive declarations about how the CEO will exercise discretion under the Excise Act but contains no account of judicial challenges, appeals, or case law arising from its application. Within the text provided there are two explicit references relevant to dispute resolution and potential litigation pathways:

• Reviewable decisions under subsection 162C(1) of the Excise Act: the instrument expressly states that “A decision to refuse an application for approval, or to impose conditions on an approval, is a reviewable decision (see subsection 162C(1) of the Excise Act).” This is an operational statement that such decisions attract the statutory review regime; it does not describe any litigation outcomes or precedents.

• Liability under subsection 77FH(3) of the Excise Act: the instrument warns that failure to account to the satisfaction of the CEO “may become liable to pay an amount equal to the duty that would have been payable on the spirit if there had been no approval,” citing subsection 77FH(3) (item 6). The instrument does not document whether, or how often, such liabilities have been litigated.

Because the instrument contains no historical litigation data, a practitioner looking for litigation outcomes or precedents arising from the application of these guidelines or from the CEO’s decisions under them will need to consult the public record of administrative decisions and court judgments under the Excise Act and related regimes. The instrument itself confines its content to procedural guidelines and references to the statutory review and liability provisions; it does not provide examples or aggregate data on review outcomes or disputes.

In short, the provided instrument contains no litigation history. It does, however, make explicit which decisions are reviewable under the Excise Act and points to the statutory provision that creates liability for failure to account, which frames the legal avenues and possible contested issues an applicant or recipient might pursue if they disagree with a CEO decision or are subject to liability.

This instrument contains several features and textual nuances that practitioners should be alert to when advising clients or preparing applications. The following are concrete “gotchas” grounded in the instrument text:

• Narrow scope tied to subitem 3.7: the instrument applies only to applications for approval to use spirit free of duty that is delivered under subitem 3.7 of the Excise Tariff Act 1921 (item 4). Do not assume the guidelines apply to other tariff subitems or concessions. Applications not falling within that subitem are outside the instrument’s scope.

• Timing and applicability to applications received on or after commencement: item 4 specifies the instrument “applies to applications received on or after the date of commencement.” Applications lodged before commencement are therefore not governed by the new instrument; this timing rule can matter where a client relies on earlier guidance or has an application in flight.

• Broad CEO discretion and open-ended factors: the CEO must be satisfied that the spirit will be used for the specified purpose “having regard to” the quantity specified, any conditions, and “other matters the CEO considers to be relevant” (item 6). The instrument also says the CEO “may take into account any matters relevant to determine any risks to revenue or the likelihood of compliance” and lists illustrative matters. The use of “may” and “other matters” signals open-ended discretion; applicants should expect potentially tailored information requests and bespoke conditions.

• Disqualification of common uses, with narrow exceptions: the instrument expressly rules out a set of uses as “appropriate” , as a beverage or in the production of a beverage (other than as an incidental input), in products that may be consumed for an intoxicating effect, as a fuel or fuel component, and on-supply to another person unless expressly permitted by the CEO (item 6). The presence of the “incidental input” carve for beverage production is narrow; where spirit might be used in beverage processes, the applicant should be prepared to justify any claim of incidental use.

• On-supply requires express permission: the instrument forbids on-supply unless the approval expressly permits it (item 6). Applicants who expect to receive spirit and then supply it to third parties must obtain explicit CEO permission in the approval; absence of that permission is a compliance risk.

• “Fit and proper” inquiry includes financial resources and tax compliance: the instrument specifically identifies “prior tax compliance history and financial resources” as relevant to whether an applicant is “fit and proper” (item 6). That means financial statements, proof of solvency or creditworthiness and evidence of tax compliance may be material to approval prospects.

• Recordkeeping and access expectations: the CEO may consider the applicant’s ability to keep appropriate records and provide access to those records (item 6). The phrase “provide access” can imply onsite inspection rights or documentary requests; applicants should plan for such oversight capabilities and retain contemporaneous records.

• Accounting may trigger duty liability: the instrument explicitly states that recipients “may be required to account for its use” and that failure to account “to the satisfaction of the CEO” may cause the recipient to become liable to pay an amount equal to the duty that would otherwise have been payable (item 6, footnote referencing subsection 77FH(3)). The threshold “to the satisfaction of the CEO” is subjective and linked to the CEO’s assessment; poor recordkeeping, incomplete accounts, or unexplained discrepancies can convert a duty-free concession into a financial liability.

• Review limited to certain decisions, not necessarily all administrative actions: the instrument states refusals and imposition of conditions are reviewable under subsection 162C(1) (item 6). It does not state explicitly that revocations, or the CEO’s post-approval accounting satisfactions/dissatisfactions that trigger liability, are reviewable decisions under the same subsection. Practitioners should verify whether specific enforcement actions such as revocation or liability notices are reviewable and by what mechanism in the Excise Act.

• Lack of detailed procedural guidance for revocation and enforcement in the instrument: while the instrument notes approvals may be “valid until revoked,” it does not specify revocation grounds, process, notice periods or appeal rights specific to revocation in this instrument text (item 6). Those details are to be found in the substantive Excise Act or administrative practice documents and should be checked.

• “Appropriate” is not further defined beyond exclusions: the instrument states approvals “may be given to persons to use spirit for appropriate and specific industrial, manufacturing, scientific, medical, veterinary or educational purposes” but does not comprehensively define “appropriate” beyond the explicit exclusions and the examples of matters for consideration (item 6). Applicants should therefore treat “appropriate” as a fact-intensive determination by the CEO.

• Potential administrative burden for small users: the instrument contemplates assessment of storage, handling and recordkeeping and may require accounting and access to records. For small entities seeking small quantities, the compliance and evidentiary demands could nonetheless be material. The instrument does not provide a de minimis threshold.

These items are specific, concrete features of the instrument that create pitfalls for applicants who do not plan their applications, recordkeeping, and governance around the CEO’s discretion and the statutory enforcement point of failure.

The instrument sets out what the CEO expects as a matter of process and content for applications and what recipients must do to avoid adverse financial consequences. The following compliance checklist and guidance is grounded in the instrument text and is designed to help applicants prepare robust applications and ongoing compliance regimes.

Pre-application preparation

• Confirm statutory fit: ensure the proposed use of spirit is tied to subitem 3.7 of the Schedule to the Excise Tariff Act 1921 and that the intended purpose is one of the enumerated “industrial, manufacturing, scientific, medical, veterinary or educational” purposes. Do not rely on the concession for uses expressly excluded: beverage use (except as incidental input), products consumed for an intoxicating effect, fuel use, or on-supply unless explicit CEO permission is sought (item 6).

• Prepare documentary evidence of the enterprise connection: if the use of spirit is connected to “the course or furtherance of carrying on an enterprise,” gather documentation that shows how the spirit will be used within that enterprise. The instrument adopts the ABN Act meaning of that phrase (item 6, footnote), so integrating enterprise-level documents (ABN registration, business plans, contracts evidencing the use) will assist in satisfying the CEO.

• Assemble evidence on “fit and proper” factors: because the CEO may consider whether an applicant is fit and proper, assemble evidence of prior tax compliance (tax returns, BAS lodgment history, ATO interaction records), financial resources (financial statements, bank facilities), and any other evidence that demonstrates responsible handling of duty-free goods (references, compliance policies).

Application drafting

• Apply in writing and include the particulars the instrument lists: the instrument states “Applications for approval should be made in writing” and should include identifying details, particulars about the quantity, type and strength of spirit, and “any other information the CEO considers relevant in making a decision” (item 6). Provide a clear description of the quantity sought and the proposed temporal structure (once-off amount, per month, per calendar year), and indicate whether you seek an end-dated approval or an ongoing approval.

• Describe storage, handling and recordkeeping arrangements: because the CEO may take account of storage and handling arrangements and the applicant’s ability to keep records, include site plans, security measures, inventory controls, and proposed recordkeeping systems in the application. Explain how records will be accessible to the CEO if inspection is required.

• Anticipate and address risks of diversion: explain controls to ensure the spirit will not be used for an unauthorised purpose. If the spirit has industrial uses that could be repurposed to beverage uses or fuel, set out monitoring, tagging, labelling, segregation and process controls to mitigate diversion risk.

• If proposing any on-supply, seek express permission in the approval request: do not assume on-supply permission; the instrument makes on-supply impermissible unless “expressly permitted by the CEO in an approval” (item 6). If on-supply is commercially necessary, request express authorisation and document the proposed chain of custody and contractual safeguards.

Post-approval compliance

• Keep detailed records and be prepared to provide access: the CEO may require accountability for the spirit’s use and may consider the applicant’s ability to keep and provide access to records. Implement contemporaneous inventory logs, batch records, chain-of-custody records and reconciliation procedures that can demonstrate consumption for the approved purpose.

• Monitor quantities against the approval limits: the approval will specify quantities and temporal limits (once-off, monthly, yearly). Make operational controls to ensure receipting and consumption do not exceed the authorised quantities or timeframes.

• Comply with any attached conditions: approvals may be granted subject to conditions. Ensure governance systems capture compliance with conditions and that routine compliance checks are performed.

• Prepare for CEO inspections and inquiries: storage, handling and record access are matters the CEO may examine when assessing compliance. Have staff and premises prepared for inspection and a single point of contact for ATO communications.

• Maintain tax compliance and financial records: the CEO may assess prior tax compliance history and financial resources when deciding on approval. Continued good order in tax reporting may mitigate the risk of conditions or refusal in future applications or applications for increased quantities.

If accounting obligations are imposed or the CEO later requires accounting

• Ensure accounting outputs can demonstrate use for approved purposes: keep records that map quantities received to consumption in approved processes, including serial numbers, batch numbers, product records, test results, process logs and disposal certificates if applicable.

• Be aware of the consequences of failure to account: the instrument warns that failure to account “to the satisfaction of the CEO” may make the recipient liable to pay the duty that would have been payable (item 6; see subsection 77FH(3) of the Excise Act). Put in place reconciliation procedures and escalation protocols for investigating unexplained variances before an ATO query becomes a statutory liability.

If a decision is adverse (refusal or conditions)

• Use the statutory review pathway: the instrument specifies that refusal of an application or imposition of conditions are reviewable decisions under subsection 162C(1) of the Excise Act (item 6). Be prepared to lodge a review under the mechanisms provided by the Excise Act and seek administrative remedies where appropriate.

Practical checklist to reduce CEO concern and increase likelihood of approval

• Written application with full identifying details.
• Clear statement of purpose within the enumerated domains (industrial, manufacturing, scientific, medical, veterinary, educational).
• Exact quantity, type and strength of spirit requested and preferred approval cadence (once-off/month/year).
• Comprehensive description of storage, handling, security, and inventory controls.
• Demonstration of recordkeeping systems and ability/willingness to provide access to records.
• Evidence of tax compliance history and financial capacity.
• Risk mitigation measures against diversion to excluded uses, and, if necessary, explicit request for on-supply permission with contractual and operational safeguards.

Following these steps aligns with the instrument’s stated matters and the CEO’s discretionary enquiries, and creates a record that supports both obtaining and maintaining approval while reducing the risk of a duty-equivalent liability arising from failure to account.