ATO Interpretative Decision
ATO ID 2004/30 (Withdrawn)
Excise
Wine Equalisation Tax: calculation of credit for WET paid on wine exported as a GST-free supplyFOI status: may be released
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This ATO ID is withdrawn as it is superseded by Wine Equalisation Tax Ruling WETR 2009/1This document has changed over time. View its history.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
How is the amount of credit for Wine Equalisation Tax (WET) determined where wine is purchased from persons not registered for goods and services tax (GST), exported as a GST-free supply by the purchaser and an amount of WET is excluded from the selling price?
Decision
The amount of credit available is the amount of WET borne on the wine. Where documentary evidence demonstrating the amount of WET borne is not available, a reasonable estimate of the amount of WET borne is accepted as being 7.5% of the purchase price of the wine (including GST).
Facts
A business which is registered for GST purchases wine from a person not registered for GST and exports the wine as a GST-free supply.
Reasons for Decision
The Wine Tax Credit Table contained in section 17 of the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act) sets out the grounds where an entitlement to a credit for WET arises. The credit ground relevant to this situation is Credit Ground CR11 which is set out below:
| No. | Summary of Ground | Details of ground | Amount of WET credit | Time WET credit arises |
|---|---|---|---|---|
| CR11 | Tax excluded from sale price of GST-free supply of tax paid wine | You sold wine for a price that excluded some or all of the WET previously borne by you on the wine, and the sale was a GST-free supply of the wine. | WET excluded from sale price | Time of sale |
Credit Ground CR11 provides a credit entitlement for WET in circumstances where the wine is sold as a GST-free supply provided WET has been borne on the wine and the amount has been excluded from the selling price of the wine. Section 38-185 of the A New Tax System (Goods and Services Tax) Act 1999 sets out the circumstances in which an export is a GST-free supply.
Section 31-10 of the WET Act states that a person is taken to have borne WET if:
- 1.
- they have become liable to WET on an assessable dealing with the wine (the WET for which they have become liable is not counted to the extent to which it has been the basis of a WET credit entitlement); or
- 2.
- they purchased wine for a price that included WET (the amount of WET borne is reduced by an amount of WET included in that price that has been refunded or an amount of WET that has been credited to them).
Where wine is purchased from a person who is not registered for GST (for example wine was purchased at auction from a private individual who is not registered for GST) it may not be possible to obtain documentary evidence substantiating the amount of WET actually borne on the wine. Further, although WET may have been borne on the wine, it is difficult to accurately estimate the amount of WET borne because it is not known where WET was paid in the chain of transactions that occurred before the wine was purchased. In view of this, and following industry consultation, we consider that a reasonable estimate of the amount of WET borne on the wine is 7.5% of the purchase price of the wine (including GST).
ATO ID 2003/941
Date of decision: 5 January 2004
Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
section 17-5
Related Public Rulings (including Determinations)
Wine Equalisation Tax Ruling WETR 2002/2
ATO ID 2003/941
Keywords
WET credit
Wine
Wine equalisation tax
ISSN: 1445-2782
| Date: | Version: | |
| 5 January 2004 | Original statement | |
| You are here | 24 July 2009 | Archived |