A business sought to acquire excise-paid spirit in containers of more than 2 litres (i.e. bulk containers) to repackage them into smaller containers for retail sale. The ATO advised the business that they could only acquire excise-paid spirit in containers of 2 litres or less for repackaging. Alternatively, the business may acquire excise-unpaid (‘underbond’) spirit in bulk containers for repackaging if they had an excise storage licence. The ATO officer suggested, however, that the licence would unlikely be granted as it would cause an unnecessary delay to the payment of excise.  

The business sought assistance from the IGTO as they were concerned that the ATO’s advice to them was incorrect. If the ATO’s advice was correct, the business was concerned that similar businesses only had two options:  

1. acquire excise-paid spirit in many small containers of 2 litres or less – this would create inefficiencies and produce large and unnecessary amounts of waste; or  
2. acquire spirit underbond, provided that an excise storage licence is granted by the ATO – this would impose disproportionate regulatory burden on small businesses.  

As a result of the IGTO’s investigation:  

• the IGTO provided independent assurance to the business that the ATO’s advice (other than the granting of storage licence) was in line with section 58 of the Excise Act 1901;  
• the ATO issued a written apology to the business because the previous ATO advice about not granting a storage licence to the business was not appropriate and did not consider the business’s operations; and  
• the ATO made available an officer from the ATO Excise Centre to assist the business with applying for a storage licence.