Faith groups are concerned a proposed law to ban Nazi and Islamic State symbols will have consequences for religious practice in Australia.
Collectors and historical societies are also apprehensive about the proposal which they believe could limit education, the preservation of history and impact the value of memorabilia.
Attorney-General Mark Dreyfus introduced proposed law changes to parliament, saying it would sent a clear message that there was no excuse for displays of hate in Australia.
If passed, the criminal code would be amended to prohibit hate symbols and see people who displayed the insignia face the prospect of prison time.
The ban would apply to the Nazi hakenkreuz, the Nazi double sig rune and the IS flag.
But the Canberra Islamic Centre raised "deep concerns" with the flag's inclusion, saying no explanation was provided in the legislation about its background or meaning.
The centre said the Muslim community was not given an opportunity to explain the misappropriation of the Islamic flag by the terrorist organisation for "unholy cause".
"The words inscribed on the Islamic flag are sacred words and written by Muslims on a daily basis," Canberra Islamic Centre president Ilyas Rahaman said in a submission to the committee examining the proposal.
"These words are taken directly from our scripture, the Holy Quran, and therefore cannot be subject to a ban."
Mr Ramahan went on to say the Muslim community deplored IS but it was widely understood the flag did not belong to or represent the terrorist group.
He requested the flag be removed from the proposed ban.
In a joint submission, the Geelong military re-enactment group and historical society raised four concerns with the bill as proposed.
The bill would make it an offence to sell, rent or lease memorabilia containing the banned symbols.
Displaying the symbols for journalistic, educational or artistic purposes would be exempt from the ban.
But the group's joint submission said a blanket approach would inadvertently affect re-enactors who purchase and display the items and did not address the nuances associated with Nazi memorabilia.
"Modellers need to be able to purchase these items (and) symbols, let alone the basic right of Australian citizens to partake in the legitimate hobby of collecting modelling military items," the submission said.
Mr Dreyfus told SBS the government was happy to work with anyone in the community who thought the legislation could be tweaked so there were not "unintended consequences".
