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  • Excise refund scheme for alcohol manufacturers

    If you pay excise duty on alcoholic beverages you manufacture, such as beer, spirits or other fermented beverages (such as non-traditional cider), you may be eligible for an excise refund under the Excise refund scheme for alcohol manufacturers (Refund scheme).

    On this page

    Alcohol excise terms explains terms we use.

    Changes from 1 July 2021

    From 1 July 2021, the Refund Scheme has been replaced by the Excise remission scheme for manufacturers of alcoholic beverages (Remission scheme).

    Transitional period rules under the Remission scheme will affect what you can claim under the Refund scheme for goods entered for home consumption prior to 1 July 2021. Refer to What you can claim for more information.

    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 where:

    • it's a subsidiary of another alcohol manufacturer
    • another alcohol manufacturer subsidises its operations
    • 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 both:

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

    Exclusions

    The scheme excludes:

    • excisable goods entered for home consumption on or after 1 July 2021 – the Excise remission scheme for manufacturers of alcoholic beverages (Remission scheme) applies to goods entered on or after 1 July 2021
    • products 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. This includes any refunds that you receive on or after 1 July 2021 for goods entered for home consumption on or before 30 June 2021.

    This means you need to include any refund in your tax return for the financial year you received it.

    Goods entered before 1 June 2021

    To be entitled to a refund under the Refund scheme on goods entered for home consumption at any time prior to 1 June 2021, you need to have paid the excise duty on or before 30 June 2021.

    Where the duty is paid any time on or after 1 July 2021, you cannot claim a refund under the Refund scheme.

    Example

    Whisky Co pays excise duty of $5,000 on 21 June 2021 for goods entered for home consumption in May 2021. They can claim $3,000 (that is 60% of the duty paid) subject to the $100,000 cap for the 2021 financial year.

    If they paid the excise duty of $5,000 on 5 July 2021, they cannot claim a refund on the payment under the Refund scheme.

    End of example

    Goods entered between 1 June 2021 and 30 June 2021 with duty paid on or after 1 July 2021

    For goods entered for home consumption from 1 June 2021 to 30 June 2021 (inclusive) where you pay the excise duty on or after 1 July 2021, you can claim a refund (under the Refund scheme) up to a maximum of $8,333.

    This refund does not count towards the $100,000 cap for the 2020–21 financial year (as the payment is made in the 2021–22 financial year) and it will not count towards the $350,000 automatic remission cap under the new Remission scheme.

    To claim the refund, lodge an excise return, pay the excise duty and then claim the refund using the excise refund form.

    Example

    Bottler's Gin pays excise duty of $10,000 on 20 July 2021 for goods entered for home consumption in June 2021. They can claim $6,000 (that is 60% of the duty paid). This amount is under the maximum of $8,333.

    If they had paid excise duty of $20,000, they would be only able to claim $8,333 (being the maximum allowable for this transitional provision).

    End of example

    Note: If the excise duty on goods entered for home consumption in June 2021 was paid on or before 30 June 2021, you can claim a refund (under the Refund scheme) and it is included in the $100,000 cap for the 2020-21 financial year.

    Example

    That's Rum pays excise duty of $25,000 on 30 June 2021 for goods entered for home consumption in June 2021. They can claim $15,000 (that is 60% of the duty paid) so long as they still have that amount available in their $100,000 cap for the 2020–21 financial year.

    If they had already claimed a refund of $95,000 on excise duty paid since 1 July 2020, they would only be able to claim a further $5,000 (rather than $15,000), before they reach the $100,000 cap.

    End of example

    Becoming a manufacturer part way through the financial year

    If you obtain your manufacturer licence 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 obtain your manufacturer licence and ceases at the end of that 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 after the day you pay the excise duty.

    Excise guidelines for the alcohol industry section 7 – Remissions, Refunds, Drawbacks & Exemptions gives further guidance on the Refund scheme, including the eligibility criteria and practical examples.

    If you're eligible, your next step is to claim an excise refund or drawback.

    Contact us

    Contact us about the Refund scheme or the transitional scenarios.

    Last modified: 25 Nov 2021QC 63608