The Australian Taxation Office (ATO) is stepping up compliance action targeting alcohol manufacturing businesses that may be improperly claiming concessions under the excise remission scheme.
Introduced in 2021, the scheme allows eligible domestic alcohol manufacturers to automatically claim a remission on the first $400,000 of excisable alcohol manufactured each financial year, making those goods free of excise duty.
In a news release, the ATO said it had expanded targeted compliance activities since July 2026 to examine arrangements that could undermine the scheme, including whether businesses operate independently from other alcohol manufacturers, contract manufacturing arrangements and whether products are genuinely distilled or brewed.
The tax office is also examining whether businesses meet the scheme’s “still ownership” test, while using bulk ethanol movement data and industry tip-offs to identify potential non-compliance.
ATO Deputy Commissioner Dr Rowan Fox said the scheme was intended to support genuine Australian alcohol manufacturers.
“The excise remission scheme for alcohol manufacturers was established to support genuine Australian alcohol manufacturers, not businesses that structure their affairs to gain concessions to which they are not entitled,” Fox said.
From September, the ATO will introduce enhanced assurance measures for businesses entering the excise system, including pre-licensing reviews to verify manufacturing operations and targeted reviews of newly approved licence holders where there are connections involving shared premises, individuals or specialist manufacturing personnel.
From October, new businesses claiming the concession will also face targeted first-year reviews during their first two years of operation. The ATO said it would assess compliance with legal and economic independence requirements and examine businesses that have not installed an operational still after two years of claiming the concession.
“Businesses or promoters that deliberately seek to rort the scheme undermine its integrity and disadvantage competitors who are complying with the law,” Fox said.
The ATO said businesses must be able to demonstrate their eligibility and maintain records supporting their claims. Those unable to substantiate their entitlement may face unpaid excise liabilities, penalties and further compliance scrutiny.
“Our objective is to identify potential risks before they become entrenched and ensure only eligible businesses gain access to these concessions from the outset,” Fox said.
The ATO has encouraged alcohol manufacturers to review their eligibility and compliance with excise laws. It also said manufacturers, suppliers and members of the community can report suspected illicit alcohol activity anonymously through its tip-off channels.
“Protecting the integrity of the remission scheme is critical to maintaining a fair, sustainable and trusted excise system for the entire industry,” Fox said.
