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  • Calculating the excise duty payable on excisable alcohol

    If you need to calculate the amount of excise duty payable on excisable alcohol, make sure you understand how to do it correctly using the alcoholic content of your finished alcohol product.

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    What you need to know to do the calculations

    To calculate the alcoholic content, you need to know the:

    • type of alcohol product (that is, beer, spirits or other excisable beverages)
    • total volume of the product
    • alcoholic strength of the product
    • current excise rate applicable to that product.

    Decimal places for calculations

    You should make all calculations to two decimal places, up to when you include the information on the excise return. On the excise return, you may:

    • consolidate product lines by tariff item/subitem
    • calculate the total litres of alcohol (LAL) or each line to one decimal place.

    Beer – formula for excise duty

    For beer, excise duty is worked out on the alcoholic content above 1.15%:

    Total volume (litres) of product × (alcohol strength – 1.15%) × current excise duty rate

    Example

    Brewery Co delivers 10 cases of beer, each containing 24 × 355ml bottles with 5% alcohol by volume into the Australian domestic market on 8 October 2019.

    The beer is classified to subitem 1.10 in the Schedule to the Excise Tariff Act 1921 and has a duty rate of $50.70 per litre of alcohol (as at 5 August 2019).

    The duty payable is calculated as follows:

    10 cases × 24 bottles × 0.355 litres each = 85.2 litres

    85.2 litres × (5% − 1.15%) = 3.2802 LALs

    For the purpose of calculating duty payable, The LALs are truncated to one decimal place.

    The LALs are then multiplied by the relevant duty rate, in October 2019, to determine the duty payable:

    3.2 × $50.70 = $162.24

    End of example

    Spirits and other excisable beverages – formula for excise duty

    The formula for alcoholic content of spirits and other excisable beverages is:

    Total volume (litres) of product × alcohol strength × current excise duty rate

    Example

    Bottler's Gin delivers 100 cartons, each containing 12 × 700 ml bottles of gin, at 37.2% alcohol by volume, into the Australian domestic market on 10 February 2019.

    The gin is classified to subitem 3.2 in the Schedule to the Excise Tariff Act 1921 and has a duty rate of $85.36 per litre of alcohol (as at 4 February 2019).

    Therefore, the duty payable is calculated as follows:

    100 cartons × 12 bottles × 0.7 litres each = 840.0 litres

    840 litres × 37.2% = 312.48 LALs

    For the purpose of calculating duty payable, the LALs are truncated to one decimal place.

    The LALs are then multiplied by the relevant duty rate, in February 2019, to determine the duty payable:

    312.4 LALs × $85.36 = $26,666.46.

    End of example

    Further examples showing how to calculate the amount of excise duty payable on different excisable alcoholic beverages can be found in Excise guidelines for the alcohol industry section 6.3.5How do I work out the amount of duty to pay?

    Calculating excise duty payable for brew on premises shops

    The excise duty on beer brewed at brew on premises shops (BOPS) is calculated on each batch (customer's fermenter).

    Excise is payable on the full contents of each fermenter.

    The excise duty on beer brewed at BOPS is lower than for commercially-brewed beer. The duty payable will vary according to the beer's strength.

    You pay the excise duty on a weekly or monthly basis (once you have a periodic settlement permission – or PSP) at the same time you lodge your excise return.

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    Last modified: 15 Sep 2020QC 63603