ATO ID 2007/34: Excise: Licensing conditions - notification of non-renewal of lease on licensed premises
Date of decision: 16 February 2007
Business line: Indirect Tax

Issue
Can the Collector impose a condition on a licence under subsection 39D(3) or paragraph 39DA(1)(b) of the Excise Act 1901 requiring a licence holder to notify the Collector in writing no later than 30 days prior to the event that the licence holder's occupancy of licensed premises will be terminated?

Decision
Yes. The Collector may impose a condition on a licence under subsection 39D(3) or paragraph 39DA(1)(b) of the Excise Act requiring a licence holder to notify the Collector in writing no later than 30 days prior to the event that the licence holder's occupancy of licensed premises will be terminated.

Facts
An entity has applied for a manufacturer licence. The applicant intends to carry on a business manufacturing excisable goods from leased premises.

Reasons for decision
Summary: All legislative references are made to the Excise Act. Subsection 4(1) defines 'Collector' to mean the Commissioner of Taxation or an authorised officer. An application for a licence may be made under section 39. Section 39A provides that the Collector has discretion whether or not to grant a licence. If the Collector chooses to grant a licence, the licence is subject to the conditions set out in subsection 39D(1), any conditions prescribed under subsection 39D(2) and any conditions specified in the licence under subsection 39D(3). The conditions specified under subsection 39D(3) are conditions that are considered by the Collector to be necessary or desirable for the protection of the revenue or for the purpose of ensuring compliance with the Excise Acts. Under paragraph 39DA(1)(b) the Collector may impose additional conditions on an existing licence. The term 'necessary for the protection of the revenue' was considered in Re Francesco Martino Applicant v. Australian Taxation Office Respondent (2002) AATA 1242 ( Martino ). The following two elements for the protection of the revenue may be drawn from Deputy President Forgie's judgement. The entity has applied for a manufacturer licence in respect of the premises they are leasing. The imposition of a condition on the licence to the effect that the licence holder must notify the Collector in writing no later than 30 days prior to the event that the licence holder's occupancy of licensed premises will be terminated is necessary to protect the revenue and ensure compliance with the Excise Acts for the following reasons: The above factors justify the imposition by the Collector of a condition requiring a licence holder to notify the Collector in writing no later than 30 days prior to the event that the licence holder's occupancy of licensed premises will be terminated.

Legislative references: Excise Act 1901 subsection 4(1) section 27 section 39 paragraph 39(2)(d) subsection 39D(1) subsection 39D(2) subsection 39D(3) Part IV
Case references: Re Francesco Martino Applicant and Australian Taxation Office Respondent [2002] AATA 1242 (2002) 70 ALD 403
Subject references: Excise Excise collections Licensing