Do you need a health check of your reconciliation processes?

The ATO has recently announced they are reviewing a number of activities that involve alcohol entering the Australian domestic market for consumption without payment of the required amount of excise duty. Typically, the excise duty is paid by the distributor or the manufacturer and is included in the sale price of the product. The ATO’s main concern is that retailers, manufacturers or distributors that have not paid the requisite excise duty are able to sell the alcohol at a much greater profit or for a lower price than those who have paid the requisite excise duty. This creates an unfair competitive advantage.

What is the ATO doing?

To address this, the ATO are contacting retailers, manufacturers and distributors regarding their obligations with the potential for audits if non-compliance is suspected.

Some of the activities that attract attention include:

  • unlicensed manufacture and non-payment of duty
  • licenced manufacture with unreported excise duty
  • selling duty-unpaid excisable alcohol
  • diversion of duty-unpaid alcohol

What should you do?

The ATO is encouraging companies who suspect they have purchased illicit alcohol to contact the ATO as soon as possible in order to make a voluntary disclosure in the hope of avoiding penalties. Before doing so, the ATO are encouraging affected parties to seek professional advice.

Penalties apply

In addition to the payment of the excise duty, the penalty amount is up to five times the amount of excise duty that would have been payable on the goods with the review period extending to a 4 year period.

How can we help?

Given the complexities of reconciling your sales transactions and internal control process we have specialists who can assist with the health check of your transactions and assist with the auditing of your existing internal controls to ensure there is no leakage of excise duty.

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