• Refund scheme for alcohol manufacturers

    From 1 July 2017, you may be eligible for an excise refund if you pay excise duty on alcoholic beverages such as beer, spirits or other fermented beverages (such as non-traditional cider) that you have manufactured.

    If you are eligible, you can claim a refund of 60% of the excise duty you have paid on your products, to a maximum of $30,000 per financial year.

    Any alcohol manufacturer excise refund that you receive is assessable income for income tax purposes, so you need to include it in your tax return.

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    Who is eligible

    To be eligible for a refund you must:

    • have manufactured an alcoholic beverage and paid excise duty on it
    • have fermented or distilled at least 70% of the alcohol content by volume of the alcoholic beverage
    • hold a manufacturer licence authorising you to manufacture alcoholic beverages
    • be legally and economically independent of any other entity that has received a refund under the scheme (if you're not legally and economically independent of any other entity, only one manufacturer in your group is entitled to the refund).

    An alcohol manufacturer is not legally and economically independent if:

    • it is a subsidiary of another alcohol manufacturer, or
    • its operations are subsidised by another alcohol manufacturer.

    Additional requirements for distilled beverages

    For refunds on excise paid for distilled alcoholic beverages, you must also satisfy (if the financial year is not the first or second financial year in which you are eligible to claim a refund under the scheme) the still ownership test and own one or more stills that have:

    • a capacity of at least five litres
    • been installed ready to use at the beginning of the financial year
    • been used to manufacture an alcoholic beverage during the financial year.

    A still that has been installed and ready to use at the beginning of the financial year does not have to be the same still that has been used to manufacture an alcoholic beverage during the financial year.

    Still ownership test

    You will satisfy the still ownership test if:

    • you claim the refund after the financial year in which the excise duty was paid and had sole ownership of at least one still for the whole of the financial year that you paid excise duty, or
    • you claim the refund before the end of the financial year in which the excise duty was paid and you had sole ownership of at least one still from the beginning of the financial year until when you claimed the refund and through to the end of the financial year.

    Exclusions

    The scheme excludes:

    • wine producers producing wine to which the A New Tax System (Wine Equalisation Tax) Act 1999 applies
    • ready to drink (RTD) mixed spirits, where the spirit was produced by another manufacturer and blended with a non-alcoholic beverage to create a RTD product.

    When to claim the refund

    You must apply for the refund within 12 months from the day the excise duty is paid.

    If you have claimed a refund of excise duty for alcohol that is returned to a licensed premises:

    • after you have claimed the refund, you are only entitled to a refund of the excise duty, less the amount of the refund you've already claimed.
    • and you have not already claimed a refund for that alcohol excise, you are not entitled to the alcohol manufacturers refund for that alcohol.

    Becoming a manufacturer part way through the financial year

    If you start operating as an alcohol manufacturer part way through the financial year, the maximum refund payable is calculated by:

    • multiplying $30,000 by the number of days in the period, starting when you first became an eligible alcohol manufacturer and ending at the end of the financial year
    • dividing the result by 365 days.

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      Last modified: 19 Jul 2017QC 47706