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  • Excise refund scheme for alcohol manufacturers

    You may be eligible for an excise refund if you pay excise duty on alcoholic beverages you manufacture, such as:

    • beer
    • spirits
    • other fermented beverages (such as non-traditional cider).

    This is known as the Excise refund scheme for alcohol manufacturers or Refund Scheme.

    Note that the Refund Scheme and WET Producer Rebate are administered separately. Even if your business is eligible for both, you can't claim a refund or rebate for the same product under both schemes. If you are eligible, you can claim a refund for:

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    Who is eligible

    To be eligible for a refund, under the Refund Scheme, you must:

    • hold a manufacturer licence authorising you to manufacture alcoholic beverages
    • 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
    • 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.

    Situations where an alcohol manufacturer is not legally and economically independent include:

    • it's a subsidiary of another alcohol manufacturer, or
    • another alcohol manufacturer subsidises its operations
    • where one or two individuals or companies control or have majority shareholding in multiple excise licence holders.

    Additional requirements for distilled beverages

    For refunds of excise paid for distilled alcoholic beverages, you must also:

    • satisfy the still ownership test
    • own one or more stills that
      • have a capacity of at least five litres
      • you install ready to use at the beginning of the financial year
      • you use to manufacture an alcoholic beverage during the financial year.
       

    The above applies if the financial year is not the first or second financial year in which you are eligible to claim a refund under the scheme.

    A still that you install ready to use at the beginning of the financial year doesn't have to be the same still that you use to manufacture an alcoholic beverage during the financial year.

    Still ownership test

    The criteria for satisfying the still ownership test changes slightly depending on if you claim the refund before or after the end of the financial year in which you paid the excise duty.

    If you claim the refund after the financial year in which you paid the excise duty, you need to have had sole ownership of at least one still for the whole of that financial year.

    If you claim the refund before the end of the financial year in which you paid the excise duty, you need to have:

    • had sole ownership of at least one still for the whole of that financial year, and
    • a reasonable expectation that you will continue to own the still for the remainder of that financial year.

    Exclusions

    The scheme excludes:

    • wine to which wine equalisation tax applies
    • ready to drink (RTD) mixed spirits, where another manufacturer produces the spirit and you then blend that manufacturer's spirit with a non-alcoholic beverage to create an RTD product.

    What you can claim

    If you are eligible under the Refund Scheme, you can claim a refund of 60% of the excise duty you have paid on your products. You can claim a maximum of $100,000 per financial year.

    Any refund that you receive under this Refund Scheme is assessable income for income tax purposes, so you need to include it in your tax return.

    Becoming a manufacturer part way through the financial year

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

    • multiplying $100,000 by the number of days in the period then dividing the result by 365 days.

    The period starts from when you first became an eligible alcohol manufacturer and ends at the end of the financial year.

    Alcohol returned to an excise-licensed premises

    As you can already claim a refund of excise duty when you return duty-paid goods to an excise-licensed premises for destruction or further manufacture, you need to ensure you take any refund amount you have already claimed into account when you put in a claim. If you:

    • have already claimed under the Refund Scheme, you are only entitled to a refund of the excise duty paid on alcohol that has been returned to the excise-licensed premises, less the amount previously paid under the Refund Scheme.
    • have not already made a claim under the Refund Scheme, you are not entitled to claim a refund under the Refund Scheme.

    When to claim the refund

    You must apply for the refund within 12 months from the day you pay the excise duty.

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    Last modified: 15 Sep 2020QC 63608