Excise Duty Act

Section 1. Short title Section This Act may be cited as the Excise Duty Act.

Section 2. Interpretation Section 2(1) In this Act, unless the context otherwise requires— “approved form” shall have the meaning assigned to it under the Tax Procedures Act ( Cap. 469B ); "aircraft” means every description of conveyance by air of human beings or goods; "arm's length transaction” means a transaction between persons dealing with each other at arm's length; "authorised officer” means an officer authorised by the Commissioner for the purposes of this Act; "betting” shall have the meaning assigned to it under the Betting, Lotteries and Gaming Act ( Cap. 131 ); "bookmaker” shall have the meaning assigned to it under section 2 of the Betting, Lotteries and Gaming Act ( Cap. 131 ); “Cabinet Secretary” means the Cabinet Secretary for the time being responsible for matters relating to finance; “Commissioner” means the Commissioner-General appointed under the Kenya Revenue Authority Act ( Cap. 469 ); "compound" has the meaning assigned to it in section 2 of the Compounding of Potable Spirits Act (Cap. 123); "concessional loan" means a loan with at least twenty-five percent grant element; "denature” means to render unfit for human consumption; “digital lender” means person ho...

Section 3. Open market value Section 3(1) The open market value of excisable goods or services at a particular time is the price that the goods or services would reasonably be expected to fetch in an arm's length transaction at that time at the wholesale level. Section 3(2) If the open market value of excisable goods or services at a particular time cannot be determined under subsection (1) , the open market value shall be the price which is an objective approximation of the price of the goods or services according to the Fourth Schedule of the East African Community Customs Management Act.

Section 4. Time ofsupplyor importation Section 4(1)(a) the date on which the services are performed; Section 4(1)(b) the date on which the invoice for the supply of the services is issued; or Section 4(1)(c) the date on which payment for the supply of the services is received, in whole or part. Section 4(1A) In relation to a betting transaction, the time of supply shall be the time a person wagers or stakes money on a platform or other medium provided by a bookmaker. Section 4(2)(a) for excisable goods cleared for home use directly at the port of importation, or goods entered for removal to an inland station and there cleared for home use, at the time of customs clearance; Section 4(2)(b) for excisable goods removed to a licensed warehouse subsequent to importation, at the time of final clearance from the warehouse for home use; Section 4(2)(c) for excisable goods removed from an export processing zone or special economic zone for home use, at the time of removal for home use; or Section 4(2)(d) in any other case, at the time the excisable goods are brought into Kenya.

Section 5. Imposition ofexcise duty Section 5(1)(a) excisable goods manufactured in Kenya by a licensed manufacturer ; Section 5(1)(b) excisable services supplied in Kenya by a licensed person ; Section 5(1)(c) excisable goods imported into Kenya; or Section 5(1)(d) excisable services offered in Kenya by a non-resident person through a digital platform. Section 5(2) Excise duty shall be charged at the rate specified in the First Schedule for the excisable goods or services in force at the time the liability arises for excise duty as determined under section 6 . Section 5(3)(a) under subsection (1)(a) , shall be payable by the licensed manufacturer ; Section 5(3)(b) under subsection (1)(b) , shall be payable by the licensed person making the supply : Section 5(3)(c) under subsection (1)(c) , shall be payable by the importer of the excisable goods; or Section 5(3)(d) under subsection (1)(d) , shall be payable by the non-resident person offering the service.

Section 6. Timing of liability forexcise duty Section 6(1) The liability of a licensed manufacturer for excise duty on excisable goods manufactured in Kenya shall arise at the time of removal of the goods from the manufacturer's factory . Section 6(2) For the purposes of this Act, excisable goods that are consumed in a licensed manufacturer 's factory shall be treated as removed from the factory at the time of consumption. Section 6(3) The liability of a licensed person for excise duty on excisable services shall arise at the time of the supply of the services. Section 6(4)(a) for petroleum products, at the time of importation or such other time as may be specified by the Cabinet Secretary by notice in the gazette ; or Section 6(4)(b) for any other excisable goods, at the time of importation . Section 6(5) A licensed person shall pay the liability for excise duty arising under subsection (1) or (3) , as the case may be, in accordance with section 36 . Section 6(6) An importer shall discharge the liability for excise duty referred to in subsection ( 4) in accordance with section 36 . [ Act No. 10 of 2018 , s. 23.]

Section 7. Goods and services not liable toexcise duty Section 7(1)(a) exempt goods which meet the conditions set out in the Second Schedule; Section 7(1)(b) excisable goods exported under customs control, including as stores; Section 7(1)(c) excisable services exported from Kenya; Section 7(1)(d) excisable goods that the manufacturer has destroyed, with the prior written permission of the Commissioner , under the supervision of an authorised officer prior to their removal from the factory in which they were manufactured; Section 7(1)(e) denatured spirits for use in the manufacture of gasohol or as a heating fuel; Section 7(1)(f) in the course of removal of the goods by the manufacturer from the manufacturer's factory including when loading or unloading the goods; Section 7(1)(f)(i) in the course of removal of the goods by the manufacturer from the manufacturer's factory including when loading or unloading the goods; Section 7(1)(f)(ii) in the factory of the manufacturer in which the goods were manufactured before removal from the factory ; or Section 7(1)(f)(iii) on board an aircraft or vessel prior to importation into Kenya. Section 7(2) The Cabinet Secretary may by notice in the...

Section 8. Variation of rates ofexcise duty Section 8(1) The Cabinet Secretary may, by order in the Gazette , amend the First Schedule by increasing or decreasing any rate of excise duty on excisable goods or services from the date specified in the order by an amount not exceeding ten per centum of the rate set out in respect of those goods or services in the First Schedule. Section 8(2) Nothing in subsection (1) shall empower the Cabinet Secretary to impose excise duty on any goods or services that are not excisable. Section 8(3) The Cabinet Secretary shall lay an order varying the rate of excise duty made under subsection (1) before the National Assembly within seven days after its publication in the Gazette . Section 8(4) If the National Assembly passes a resolution disapproving of the variation within twenty days from the first day on which the National Assembly next sits after the variation is laid before the National Assembly, the Order shall cease to have effect from the date of the resolution.

Section 9. Excisable value Section 9(1) This section shall apply where the First Schedule specifies a rate of excise duty payable by reference to the excisable value of excisable goods or services. Section 9(2)(a) the customs value of the goods as determined under the East African Community Customs Management Act, whether or not any duty of customs is payable on the goods; and Section 9(2)(b) the amount of duty of customs (if any) payable on the goods under the East African Community Customs Management Act, 2004 (No. 1 of 2005) . Section 9(3)(a) the value added tax payable on the supply of the goods; Section 9(3)(b) the cost of excise stamps, if any; or Section 9(3)(c) the cost of returnable containers. Section 9(4)(a) if the excisable services are supplied by a registered person in an arm's length transaction, the fee, commission, or charge payable for the services; or Section 9(4)(b) in any other case, the open market value of the services. Section 9(5) The excisable value of excisable services shall not include the value added tax , if any, payable on the supply of the services. Section 9(6) The excisable value of excisable services specified in item 4 of Part II of the First Sc...

Section 10. Repealed Section Repealed byAct No. 4 of 2023, s. 41

Section 11. Ex-factoryselling price of excisable goods Section if the excisable goods are sold by the manufacturer, in an arm's length transaction, the price payable by the purchaser; or

Section 12. Quantity of excisable goods Section 12(1) This section shall apply where the First Schedule specifies a rate of excise duty payable by reference to a quantity measured by volume or weight. Section 12(2)(a) excisable goods are imported into Kenya, or removed from the factory of a licensed manufacturer , in a package intended for sale with, or of a kind usually sold with the goods in a sale by retail; and Section 12(2)(b) is not marked or labelled with a net weight; or Section 12(2)(b)(i) is not marked or labelled with a net weight; or Section 12(2)(b)(ii) is not commonly sold as containing, or is not commonly reputed to contain, a specific quantity or weight; and Section 12(2)(c) the owner of the goods is unable to satisfy the Commissioner of the correct net weight of the package, Section 12(3)(a) excisable goods are imported into Kenya, or removed from the factory of a licensed manufacturer , in a package intended for sale with, or of a kind usually sold with, the goods in a sale by retail; and Section 12(3)(b) is marked, or labelled as containing a specific quantity of the goods; or Section 12(3)(b)(i) is marked, or labelled as containing a specific quantity of the goo...

Section 13. Place ofsupplyof excisable services Section Subject to this section, a supply of excisable services shall be deemed to be made in Kenya if the services are supplied from a place of business of the supplier in Kenya.

Section 14. Relief for raw materials Section 14(1) Where excise duty has been paid in respect of excisable goods imported into, or manufactured in Kenya by a licensed manufacturer and which have been used as raw materials in the manufacture of other excisable goods (hereinafter referred to as "finished goods"), the excise duty paid on the raw materials shall be offset against the excise duty payable on the finished goods. Section 14(2) Where excise duty has been paid in respect of internet data services by a licensed person who purchases the data in bulk for resale, the excise duty paid shall be offset against the excise duty payable by that person on internet data services supplied to the final consumer. [ Act No. 8 of 2021 , s. 31.]

Section 15. Activities requiring alicence Section 15(1)(a) the manufacture of excisable goods in Kenya; Section 15(1)(b) the importation into Kenya of excisable goods specified by the Cabinet Secretary under section 28 as requiring an excise stamp; Section 15(1)(c) the supply of excisable services; Section 15(1)(d) the use of spirit or illuminating kerosene to manufacture goods in Kenya that are not excisable goods; or Section 15(1)(e) the carrying out of any other activity in Kenya for which the Commissioner , by notice in the Gazette , may impose a requirement for a licence . Section 15(2) A person who manufactures excisable goods or supplies excisable services in contravention of subsection (1) shall be liable for the excise duty payable in respect of the excisable goods or services at the rate specified in the First Schedule. Section 15(3)(a) shall be payable on demand made by the Commissioner ; and Section 15(3)(b) shall be in addition to any penalty or sanction imposed on the person under this Act or the Tax Procedures Act ( Cap. 469B ) for breach of subsection (1) .

Section 16. Applications for alicence Section 16(1) A person who intends to undertake any of the activities specified in section 15(1) shall apply to the Commissioner for a licence for any of the activities specified section 15(1) . Section 16(2)(a) in the prescribed form; Section 16(2)(b) accompanied by the prescribed fees; and Section 16(2)(c) lodged with the Commissioner in the prescribed manner.

Section 17. Issue oflicence Section 17(1) Subject to subsection (2) , the Commissioner shall consider an application under section 16 and may grant or refuse to issue the applicant with a licence . Section 17(2)(a) the applicant has been convicted of an offence under this Act or the Tax Procedures Act ( Cap. 469B ); Section 17(2)(b) the applicant has been convicted of an offence involving dishonesty or fraud under any law; Section 17(2)(c) is or has been declared bankrupt or insolvent; or Section 17(2)(c)(i) is or has been declared bankrupt or insolvent; or Section 17(2)(c)(ii) is in the process of liquidation or receivership; Section 17(2)(d) in the case of an application to be a manufacturer of excisable goods, the factory , plant or equipment, specified in the application is not adequate to manufacture or secure excisable goods; Section 17(2)(e) the applicant has not kept proper records as required under any tax law or has otherwise failed to comply with its obligations under a tax law ; or Section 17(2)(f) paragraphs (a) , (b) , (c) or (e) apply to a person related to the applicant and the Commissioner is satisfied that the related person is reasonably expected to be involved i...

Section 18. Form oflicence Section 18(1) The licence issued under section 17 shall be in the prescribed form. Section 18(2)(a) the class or classes of excisable goods that the manufacturer is licensed to manufacture ; Section 18(2)(b) the factory or factories at which the manufacturer is permitted to manufacture excisable goods. Section 18(3) A factory specified in a licence issued under this section shall be used only for the manufacture of the class or classes of excisable goods specified in the licence . Section 18(4) Only the person specified as the licensed manufacturer in a licence issued under this section shall manufacture excisable goods in the factory specified in the licence . Section 18(5) A licence issued to a supplier of excisable services shall specify the excisable services offered.

Section 19. Obligations oflicensed person Section 19(1)(a) the original of the licence at the principal place of business; and Section 19(1)(b) in case of excisable services, a certified copy of the licence at every other place of business. Section 19(2)(a) if the licensed person ceases to carry on the activity for which the licence is issued; Section 19(2)(b) it there is any change in the name, address, place of business, ownership, constitution, or nature of the principal activity or activities carried on by the licensed person ; Section 19(2)(c) of any period in which the licensed person closes operations on a temporary basis; or Section 19(2)(d) if, the case of a licensed manufacturer , there is any change in the factory specified in the licence , or the plant and equipment used to manufacture excisable goods. Section 19(3)(a) in the case of a notification under paragraph (c) where the closure was unplanned, within seven days after the event causing the closure; or Section 19(3)(b) in any other case, at least seven days prior to the event requiring notification occurs.

Section 20. Suspension oflicence Section 20(1)(a) any of the matters specified in section 19(2) (a) , (b) , or (c) apply to the licensed person ; Section 20(1)(b) the licensed person has not kept proper records as required under this Act or the Tax Procedures Act ( Cap. 469B ), or has otherwise failed to comply with obligations under this Act; Section 20(1)(c) the licensed person has breached a condition of the licence ; Section 20(1)(d) the licensed person has made a false or misleading statement to the Commissioner ; Section 20(1)(e) for a licensed manufacturer , the factory , or plant or equipment, specified in the licence is no longer adequate to manufacture or secure excisable goods. Section 20(2) Where a licence is suspended under subsection (1) , the Commissioner shall serve the licensed person with written notice of the suspension. Section 20(3) The suspension of a licence shall take effect from the date of service of the notice under subsection (2) . Section 20(4) A person served with a notice of suspension under subsection (2) may, by notice in writing and within fourteen days of service of the notice, or within such further time as the Commissioner may allow, appeal agai...

Section 21. Cancellation oflicence Section 21(1)(a) the Commissioner has received notification under section 19 (2) (a) ; Section 21(1)(b) the person fails to appeal the suspension of the licence within the time specified in section 20(4) ; Section 21(1)(c) the person fails to comply with a notice served on the person under section 20 (5) (b) within the time specified in the notice or within such further time as the Commissioner may allow; or Section 21(1)(d) deleted byAct No. 10 of 2018, s. 27; Section 21(1)(e) the Commissioner rejects an appeal against the suspension of a licence under section 20 (5)(c) . Section 21(2) The cancellation of a licence takes effect from the date specified in the notice of cancellation. Section 21(3) Any obligation or liability of a licensed person under this Act or the Tax Procedures Act ( Cap. 469B ), in respect of anything done or omitted to be done by the person while licensed, including the obligation to pay excise duty or to file excise duty returns, shall not be affected by cancellation of the person's licence . [ Act No. 10 of 2018 , s. 27.]

Section 22. Consequences of suspension or cancellation oflicence Section 22(1)(a) immediately cease to manufacture excisable goods; Section 22(1)(a)(i) immediately cease to manufacture excisable goods; Section 22(1)(a)(ii) immediately pay all excise duty on excisable goods on hand in respect of which duty is still unpaid; Section 22(1)(a)(iii) dispose of excisable goods and materials in the manufacturer's factory in accordance with the direction of the Commissioner ; Section 22(1)(b) require the licensed manufacturer to remove excisable goods in the manufacturer's factory to another place approved by the Commissioner ; and Section 22(1)(b)(i) require the licensed manufacturer to remove excisable goods in the manufacturer's factory to another place approved by the Commissioner ; and Section 22(1)(b)(ii) take control of the manufacturer's factory and of any excisable goods at the factory as may be necessary for the protection of revenue and ensure compliance with this Act. Section 22(2)(a) cease to supply the excisable services; and Section 22(2)(b) pay excise duty on excisable services supplied in respect of which duty is not still unpaid. Section 22(3) If the licence of a person, o...

Section 23.Commissionerto notify licensee prior to suspension of license Section 23(1) Where the Commissioner seeks to suspend a licence under this Act, the Commissioner shall give the licensee twenty-one days' notice prior to the suspension, giving grounds on which the suspension shall be done. Section 23(2) A notice issued under this section may require the licensee to remedy any circumstances which may be required to be remedied. Section 23(3) Where a licensee fails to comply with the requirements indicated in the notice issued under this section, the Commissioner may proceed to suspend the licence under section 20 . Section 23(4)(a) has engaged in tax fraud; Section 23(4)(b) has been found in possession of, or using, counterfeit stamps on excisable goods; Section 23(4)(c) has been found in possession of goods bearing counterfeit stamps; or Section 23(4)(d) has violated any regulations relating to health and safety, standards or packaging of goods. [ Act No. 10 of 2018 , s. 28.]

Section 24. Excisable goods underexcise control Section 24(1) Excisable goods stored in the factory of a licensed manufacturer shall be subject to the control of the Commissioner (referred to as " excise control "). Section 24(2)(a) the removal of the goods from the factory of a licensed manufacturer for consumption in Kenya; Section 24(2)(b) the export of the goods from Kenya; or Section 24(2)(c) the destruction or disposal of goods in accordance with subsection (4) , or section 7 (1) (d) . Section 24(3)(a) an authorised officer may, at any time, examine the goods; and Section 24(3)(b) no person shall, except with authority of the Commissioner granted in accordance with this Act, remove the goods from a factory or otherwise interfere in any way with the goods. Section 24(4) When goods are subject to excise control , the Commissioner may permit the owner of those goods to abandon them to the Commissioner , and on such abandonment the goods may, at the expense of the owner thereof, be destroyed or otherwise disposed of as the Commissioner may direct.

Section 25. Obligations oflicensed manufacturerin relation to excisable goods underexcise control Section 25(1)(a) keep and maintain at the factory , metering and measuring devices, and such other equipment as may be necessary in order to enable the Commissioner to take an account of, or check by weight, gauge or measure, all excisable goods or materials in the factory ; Section 25(1)(b) store excisable goods in the factory in such manner as to facilitate the taking of a full account of the goods; Section 25(1)(c) keep a materials account in the approved form and enter therein the particulars of all raw materials and intermediate goods received at the factory for use in manufacturing, and balance the account at the end of each month; Section 25(1)(d) keep a finished goods account in the approved form and enter therein particulars of all excisable goods manufactured therein and delivered therefrom and shall balance the account at the end of each month; Section 25(1)(e) ensure that excise duty is paid on any excisable goods consumed at the factory ; and Section 25(1)(f) comply with such other requirements as may be specified in the Regulations . Section 25(2) For the purpose of subse...

Section 26. Keeping or use of still otherwise than by distiller or rectifier prohibited Section 26(1) Subject to subsection (2) , no person other than a licensed distiller or rectifier shall keep or use a still. Section 26(2)(a) kept by a person who makes or keeps stills solely for the purpose of sale; Section 26(2)(b) kept or used for experimental, analytical, or scientific purposes; or Section 26(2)(c) kept or used for the manufacture of an article other than spirits .

Section 27. Deemed removal of excisable goods Section 27(1) A licensed manufacturer who cannot account, to the satisfaction of the Commissioner , for any quantity of excisable goods manufactured shall be deemed to have removed those goods from excise control in the month in which the discrepancy arose. Section 27(2) A licensed manufacturer shall notify the Commissioner of any discrepancies between the manufacturer's actual and recorded inventory as soon as the manufacturer becomes aware of the discrepancy.

Section 42. Tax avoidance schemes Section 42(1)(a) a scheme has been entered into or carried out; Section 42(1)(b) a person has obtained a tax benefit in connection with the scheme; and Section 42(1)(c) having regard to the substance of the scheme, it would be concluded that the person, or any other, who entered into or carried out the scheme did so for the sole or main purpose of enabling the person referred to in paragraph (b) to obtain the tax benefit, Section 42(2) If a determination is made under subsection (1) , the Commissioner shall issue an assessment giving effect to the determination. Section 42(3) A determination under subsection (1) shall be made within five years from the last day of the month in which the excise duty liability arose. Section 42(4)(a) a reduction in the liability of a person to pay excise duty , including a reduction of the liability to zero; Section 42(4)(b) an entitlement to a refund of excise duty ; Section 42(4)(c) a postponement of a liability for the payment of excise duty ; Section 42(4)(d) any other advantage arising to the person because of a delay in payment of excise duty ; Section 42(4)(e) excisable goods not to be excisable goods or excis...

Section 43. Effect on prices of imposition, abolition, or variation ofexcise duty Section 43(1)(a) in the case of the alteration being an imposition of excise duty or an increased rate of excise duty , the licensed person may, after payment of the duty, whether directly or indirectly, add the difference caused by the alteration to the agreed price; Section 43(1)(b) in the case of the alteration being the abolition of excise duty or a reduced rate of excise duty , the purchaser of the goods or services may, if the licensed person has not, directly or indirectly, paid the duty or has paid duty at a lower rate, deduct the difference caused by the alteration from the agreed price; Section 43(1)(c) any refund or payment of increased duty resulting from the alteration not being finally adopted shall be adjusted between the parties to the agreement in such manner as the case may require. Section 43(2) If, under any law relating to the control of prices or charges, a price is fixed, or any variation in the price is prohibited or regulated, in relation to any excisable goods or services, then, despite any provision of that law, when excise duty in relation to those goods or services is impo...

Section 44. Application of the East African Community Customs Management Act, 2004 Section Subject to this Act, the East African Community Customs Management Act, 2004 and any rules made thereunder relating to customs generally, whether made before or after the commencement of this Act, shall have effect, with such exceptions and adaptations as may be prescribed , in relation to imported excisable goods, whether liable to any duty of customs or not, as if all such goods were liable to duties of customs and as if those duties include excise duty .

Section 45. Regulations Section 45(1)(a) prescribing any fee or charge to be levied on excisable goods imported into, or manufactured in, Kenya; or Section 45(1)(b) prescribing any matter required to be prescribed for the purposes of this Act. Section 45(2) Regulations made under this Act may provide that any person contravening the Regulations commits an offence and shall be liable on conviction to a fine as specified in the Regulations .

Section 46. Repeals and transitional provisions Section 46(1) Subject to this section, the Customs and Excise Act is repealed. Section 46(2) Section 117A of the Customs and Excise Act shall continue to apply until the railway development levy imposed under that section is provided for in other legislation. Section 46(3) The goods listed in the Fourth Schedule to the Customs and Excise Act (now repealed), shall continue to be chargeable to export duty at the rate specified in the third column of the Schedule until the export duty is imposed in another legislation. Section 46(4) Despite the repeal of the Customs and Excise Act, the provisions of that Act shall remain in force for the purposes of the assessment and collection of any tax and the recovery of any penalty payable under that Act and outstanding at the date of the commencement of this Act. Section 46(5) Any subsidiary legislation made under the repealed Act and in force at the commencement of this Act shall remain in force, so far as it is not inconsistent with this Act, until subsidiary legislation with respect to the same matter is made under this Act. Section 46(6) Notwithstanding the provisions of subsection (5), regula...

Section 28. Excise stamps and other markings Section 28(1)(a) the excisable goods to which excise stamps shall be affixed; Section 28(1)(b) the systems for management of excise stamps and excisable goods, and Section 28(1)(c) the place and time of affixing excise stamps. Section 28(2) The Commissioner shall, by notice in at least two newspapers of national circulation, specify the types and descriptions of excise stamps to be affixed on goods specified under subsection (1) . Section 28(3) If excisable goods are manufactured for export , or for delivery to persons listed in subparagraph (2) or (3) of the Second Schedule, the goods shall be marked with such inscriptions as the Commissioner may specify to facilitate the tracking and tracing of the goods. Section 28(4) A person shall not remove excisable goods specified in subsection (1) from the place designated for affixing stamps unless the goods have been affixed with stamps in accordance with the regulation. Section 28(5) Notwithstanding subsection (4) , the Commissioner may in exceptional circumstances, and with prior approval of the Cabinet Secretary , allow removal of excisable goods from excise control without affixing excise...

Section 29. Refunds Section 29(1)(a) the goods have been damaged or stolen during the voyage or transportation to Kenya; Section 29(1)(a)(i) the goods have been damaged or stolen during the voyage or transportation to Kenya; Section 29(1)(a)(ii) the goods have been damaged or destroyed while subject to excise control ; Section 29(1)(a)(iii) the buyer has returned the goods to the seller in accordance with the contract of sale; or Section 29(1)(b) the excise duty has been paid in respect of spirits or illuminating kerosene that have subsequently been used by a licensed or registered manufacturer to manufacture unexcisable goods . Section 29(2) A licensed person may apply to the Commissioner for a refund of excise duty if the person has accounted for and paid excise duty on excisable goods or excisable services but has not received any payment from the purchaser for the goods or services, and the Commissioner may refund the excise duty if satisfied that payment for the goods or services has not been received. Section 29(3)(a) three years from the date of the sale of the goods or services; or Section 29(3)(b) the purchaser becoming legally insolvent. Section 29(4)(a) in the prescribed...

Section 30. Excisable goods subject to a refund liable forexcise dutyon disposal or inconsistent use Section 30(1) Subject to this Act, when excisable goods in respect of which a refund of excise duty has been paid are subsequently disposed of, or used, in a manner inconsistent with the purpose for which the refund was granted, the goods shall be liable for the excise duty that would have been payable on the goods if the refund had not been granted. Section 30(2) When a person who, being in possession of excisable goods in respect of which a refund of excise duty has been granted for any purpose, proposes to dispose of, or use, the goods for a purpose inconsistent with the purpose for which the refund was granted, the person shall furnish the Commissioner with the particulars of the proposed disposal or use, and shall pay the excise duty thereon.

Section 31. Exempt excisable goods liable forexcise dutyon re-importation or purchase Section 31(1) Subject to this Act, when excisable goods that have been exported or shipped for use as stores on an aircraft or vessel operating in international traffic are subsequently unloaded in Kenya for home use, the importer shall be liable to pay excise duty on such goods at the rate in force at the time of unloading. Section 31(2) Excisable goods imported or purchased free of excise duty shall be liable for excise duty on disposal or inconsistent use.

Section 32. Exempt excisable goods liable forexcise dutyon disposal or inconsistent use Section When a person imports or purchases excisable goods which are exempt from excise duty under the Second Schedule and the person subsequently disposes of, or uses, the goods in a manner inconsistent with the exemption, the person shall be liable to pay excise duty on the goods at the rate applicable to goods of that class or description at the time of disposal or inconsistent use: Provided that in the case of a motor vehicle, excise duty shall not be payable where in the case of a natural person, that person dies and the ownership of the motor vehicle is transferred by way of bequest to or inheritance by another person.

Section 33. Application of Tax Procedures Act Section The Tax Procedures Act ( Cap. 469B ) shall subject to this Part, apply for the purposes of the administration of this Act.

Section 34. Record keeping Section A person liable to pay excise duty under this Act shall keep such records as may be specified in this Act or the Regulations and shall retain the records for the time period, and in the manner specified in the Tax Procedures Act ( Cap. 469B ).

Section 35. Excise duty returns Section A licensed manufacturer or a supplier of excisable services shall submit an excise duty return, in the approved form and in the prescribed manner, for each calendar month not later than the twentieth day of the succeeding month, whether or not any excise duty is payable for that month.

Section 36. Payment ofexcise duty Section 36(1) The excise duty payable by a licensed manufacturer in respect of excisable goods removed from a manufacturer's factory during a calendar month shall be paid not later than the twentieth day of the succeeding month. Section 36(1A) Despite subsection (1) , in the case of a licensed manufacturer of alcoholic beverages, excise duty shall be payable to the Commissioner within by the fifth day of the following month upon removal of the goods from the stockroom. Section 36(2) The excise duty payable by a supplier of excisable services in respect of supplies of excisable services made by the supplier during a calendar month shall be paid not later than the twentieth day of the succeeding month. Section 36(3) The excise duty payable by an importer in respect of the importation of excisable goods into Kenya shall be paid to the Commissioner at the time of importation . Section 36(4)(a) the Tax Procedures Act ( Cap. 469B ), shall apply with regard to imposition of interest and penalties; and Section 36(4)(b) in cases where interest becomes payable it shall not, in aggregate, exceed the principal tax. Section 36(5) The Commissioner shall pay into...

Section 37. Security Section 37(1) A licensed manufacturer shall provide such security for the payment of excise duty as the Commissioner may specify by notice in writing. Section 37(2) The Commissioner may require a person to give security for the due compliance with this Act and generally for the protection of the excise duty revenue, and pending the giving of security in relation to goods subject to excise control , the Commissioner may refuse to permit removal or exportation of the goods, or to process any declaration in relation thereto, or to license any person to do so. Section 37(3) A person required to provide security under this section shall provide the security in accordance with the Tax Procedures Act ( Cap. 469B ).

Section 36A. Payment ofexcise dutywithin twenty-four hours Section 36A(1) Despite the provisions of section 36 , excise duty on betting and gaming, offered through a platform or other medium, shall be remitted to the Commissioner by a bookmaker within twenty-four hours from the closure of transactions of the day. Section 36A(2) For the purposes of this section, “closure of transactions of the day” means midnight of that day. Section 36A(3) The Commissioner may, by notice in the Gazette , require taxpayers in any sector to remit excise duty collected on certain excisable services within twenty-four hours from the closure of transactions of the day. [ Act No. 4 of 2023 , s. 45.]

Section 38. Penalty Section 38(1)(a) double the excise duty that would have been payable if the person were licensed or five million shillings, whichever is higher in the case of a person to whom section 15(1)(a) applies; or Section 38(1)(b) double the amount of excise duty payable or five million shillings, whichever is higher in respect of the importation of excisable goods requiring an excise stamp, in the case of a person to whom section 15(1)(b) applies. Section 38(2) A licensed manufacturer who manufactures excisable goods in premises that are not specified on the manufacturer's licence as the factory in which the manufacturer is permitted to manufacture the goods shall be liable to a penalty equal to double the excise duty payable on those goods. Section 38(3) If under section 27(1) has been applied to deem a licensed manufacturer to have removed excisable goods from excise control , the manufacturer shall be liable to pay a penalty equal to double the excise duty payable on those goods. Section 38(4) The Tax Procedures Act ( Cap. 469B ) shall apply to penalties imposed under this section. [ Act No. 10 of 2018 , s. 30.]

Section 39. Offences relating to licensing andexcise control Section 39(1) Any person who contravenes the provisions of sections 17(3) , 18(4) , 25(1) or 26(1) commits an offence. Section 39(2) A licensed manufacturer commits an offence if he manufactures excisable goods in premises that are not specified on the manufacturer's licence as the factory in which such manufacture is permitted. Section 39(3) A licensed person who fails to comply with section 19(1) or 19(2) commits an offence. Section 39(4)(a) removes excisable goods from excise control in contravention of section 24 (3)(b) ; Section 39(4)(b) enters any place where excisable goods are stored under excise control without authorisation; or Section 39(4)(c) is involved in the unauthorised removal, alteration, or interference with excisable goods under excise control . Section 39(5) Any person who buys, or, without proper authority, receives or has in the person's possession , any excisable goods that have been manufactured contrary to the provisions of this Act, or which have been removed from the place where they ought to have been charged with excise duty before such duty has been charged and either paid or secured commits...

Section 40. Repealed Section Repealed byAct No. 4 of 2023, s. 46.

Section 41. Sanctions for offences Section 41(1) Subject to subsection (2) , a person convicted of an offence under sections 39 and 40 , shall be liable to a fine not exceeding five million shillings or to imprisonment for a term not exceeding three years, or to both a fine and imprisonment. Section 41(2)(a) the maximum fine specified for the offence; or Section 41(2)(b) three times the value of the excisable goods to which the offence relates. Section 41(3) For the purposes of subsection (2) , the value of excisable goods shall be determined in accordance with section 9 .

Section 41A. General penalty Section A person who contravenes any provision of this Act or any regulation made thereunder for which no specific penalty is provided commits an offence and shall be liable, on conviction, to a fine not exceeding two million shillings or to imprisonment for a term not exceeding two years, or to both. [ Act No. 23 of 2019 , s. 25.]