Wine Equalisation Tax Ruling

WETR 2002/2

The operation of the wine equalisation tax system

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FOI status:

may be released

Preamble

What this Ruling is about

1. The A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act) imposes a tax on sales, importations and certain other dealings with wine which take place on or after 1 July 2000. The tax on wine is referred to in this Ruling as the wine tax although it is also known as the wine equalisation tax.

2. This Ruling explains how the wine tax system operates and which alcoholic products are covered by the wine tax.

3. This Ruling replaces Excise Bulletin EB 2000/1 'The Wine Equalisation Tax' which is withdrawn from the date of issue of this Ruling.

4. Unless otherwise stated, all legislative references in this Ruling are to the WET Act or the A New Tax System (Wine Equalisation Tax) Regulations 2000 (the WET Regulations).

Date of effect

5. This Ruling explains the Commissioner's view of the law as it applied from 1 July 2000. You can rely upon this Ruling on and from 1 July 2000 for the purposes of section 37 of the Taxation Administration Act 1953. However, to the extent of any inconsistency between this Ruling and Excise Bulletin EB 2000/1, you can still rely on EB 2000/1 for the period from 1 July 2000 to the date of issue of this Ruling. Wine Equalisation Tax Ruling WETR 2002/1 explains the WET rulings system and our view of when you can rely on our interpretation of the law in WET public and private rulings.

Ruling and Explanations

Which alcoholic products are affected?

6. The wine tax applies to the following alcoholic products provided they contain more than 1.15% by volume of ethyl alcohol:

•

grape wine;

•

grape wine products (such as marsala, vermouth, wine cocktails and creams);

•

fruit wines or vegetable wines; and

•

cider, perry, mead and sake.

7. In this Ruling all of the above are commonly referred to as wine. However, in some circumstances, grape wine is treated differently, in which case it is referred to separately in this Ruling.

8. The alcoholic products listed above are defined in the WET Act.^[1] Their definitions and examples of the treatment of various types of products are set out in Appendix A to this ruling.

9. Alcoholic products with an alcohol content of more than 1.15% by volume of ethyl alcohol which do not meet the definitions are subject to either excise duty (if they are locally produced) or customs duty (if they are imported). Designer drinks and pre-mixed alcoholic products commonly referred to as Ready-to-Drink products do not usually fall within the definitions of the above products. They are subject to excise or customs duty.

What is the rate of the wine tax?

10. The rate of the wine tax is 29%.^[2]

How does the wine tax work?

11. The broad aim of the WET Act is to impose wine tax on dealings with wine in Australia. Dealings which attract wine tax are called assessable dealings and can include selling wine, using wine, or making a local entry of imported wine at the customs barrier.

12. The wine tax is normally a once only tax designed to fall on the last wholesale sale. Where wine is sold by wholesale to a reseller, e.g., to a distributor, bottle shop, hotel or restaurant, wine tax is calculated on the selling price of the wine (excluding wine tax and GST).^[3] If wine is not the subject of a wholesale sale, e.g., it is sold by retail by the manufacturer at the cellar door or used by the manufacturer for tastings or promotional activities, alternative values are used to calculate the tax payable.^[4]

13. Wine tax is imposed on assessable dealings with wine, unless an exemption applies. If the dealing is taxable, wine tax is calculated on the taxable value^[5] of the dealing. If the wine, or some part of the wine, has already been subject to wine tax, then a credit for that earlier tax may be claimed as an offset against the tax payable on the later dealing.

14. Assessable dealings (other than a customs dealing) will only be taxable if the entity which has the dealing is registered or is required to be registered for GST.

15. With the exception of some applications to own use, GST applies to all taxable assessable dealings with wine. The most common assessable dealing is a wholesale sale and for this type of dealing the taxable value is the selling price (exclusive of wine tax and GST).^[6] In this case, GST is calculated on the selling price of the wine including the wine tax.

16. An assessable dealing may be exempted from wine tax because the purchaser has a ground for quoting and has made a quote (see paragraphs 53 to 72 and Appendix B). The purchaser's Australian Business Number (ABN) is used for quoting.

17. Normally, wine tax is included in the price for which retailers (including bottle shops, hotels, restaurants and cafes) purchase the wine. Most retailers are not entitled to a credit for wine tax included in the purchase price of the wine. The system is designed so that wine tax is built into the retailers' cost base and is then effectively passed on in the price of the wine to the end consumer. This does not affect the entitlement of the retailer to claim an input tax credit for GST.

18. Appendix C sets out a schematic diagram showing the basics of how the wine tax works in relation to the more common assessable dealings with wine.

When does the wine tax apply from?

19. If the time of a taxable dealing with wine is on or after 1 July 2000, the wine tax applies to the dealing.

Do you need to register for wine tax?

20. There is no separate registration requirement under the WET Act. Registration relates to registration under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

21. You do not have a liability to pay wine tax on any assessable dealing with wine (other than a customs dealing) unless you are registered or are required to be registered for GST.^[7]

What are assessable dealings?

Wholesale sales

22. The most common assessable dealing is a wholesale sale. A wholesale sale is a sale to an entity which purchases the wine for the purposes of resale.^[8] A wholesale sale of wine is taxable^[9] even if the wine has been taxed previously (although there is a credit^[10] for the earlier tax). This ensures that tax is imposed on the final wholesale sale.

23. Examples of the most common wholesale sales are:

•

a sale of wine by a winery to a retailer e.g., a bottle shop, hotel or restaurant; and

•

a sale of wine by a distributor to a retailer e.g., a bottle shop, hotel or restaurant.

24. A sale of wine from stock in a retail store (or retail section of a store) to make up for a temporary shortage of stock of the purchaser is not a wholesale sale if the wine is of a kind that:

•

is usually manufactured by the purchaser; or

•

is usually purchased by the purchaser for resale.^[11]

Example 1 - Sale of wine that is not a wholesale sale

25. Restaurant A, sells a small quantity of wine to a nearby restaurant, Restaurant B, which is experiencing a temporary shortage of stock of that particular wine. Restaurant B usually purchases its supplies of wine from a wholesaler but on this occasion needs the wine immediately.

26. The sale by Restaurant A to Restaurant B is not a wholesale sale, and if bought inclusive of wine tax by Restaurant A, no further wine tax is payable.^[12]

Retail sales

27. A retail sale is a sale that is not a wholesale sale^[13] - usually a sale to a person who does not purchase the wine for the purpose of resale. There are a number of situations where retail sales of wine are assessable dealings. These situations usually involve retail sales of wine which has not previously been subject to wine tax.

28. Examples of the most common situations where retail sales (i.e., sales to the end user of the wine) are assessable dealings are:

•

cellar door sales by the winery which produced the wine.^[14]

•

sales of wine which was obtained by the seller wine tax free under quotation of the seller's ABN.^[15]

•

sales of wine by a retailer, e.g., a bottle shop, hotel or restaurant, which purchased the wine from a winery which was not registered and was not required to be registered for GST and did not include wine tax in the price to the retailer. These sales by the retailer are referred to as untaxed sales.^[16] If the winery is not registered or required to be registered for GST, it is not liable for wine tax or GST and therefore does not include wine tax or GST in the price to the retailer. Where the retailer is registered or is required to be registered for GST, it is liable for wine tax on the untaxed sales. The retailer is also liable for GST on the sale of the wine.

•

sales by a grapegrower of wine produced by a contract winemaker from grapes supplied by the grapegrower to the contract winemaker. These sales by the grapegrower are also referred to as untaxed sales.^[17] Where the grapegrower is registered or is required to be registered for GST the grapegrower is liable for wine tax on the untaxed sales. The supply of the services of the contract winemaker to the grapegrower is not an assessable dealing as the charge is for the services provided by the contract winemaker and not for the sale of wine. The charge by the contract winemaker to the grapegrower is not subject to wine tax, but is subject to GST if the contract winemaker is registered or is required to be registered for GST.

Indirect marketing sales and royalty-inclusive sales

29. There are several types of retail sales of wine that are assessable dealings even though the purchaser of the wine may have borne wine tax. These include indirect marketing sales^[18] and royalty-inclusive sales.^[19] The reason for taxing these retail sales is to ensure that wine is taxed on a full wholesale value. In these circumstances, there is a credit available for the wine tax previously borne on the wine.

30. There is an indirect marketing sale if the sale is a retail sale by an entity which is not the manufacturer of the wine and the sale occurs in either of the following circumstances:

•

the sale is made by the seller through another entity, other than an employee of the seller, who is acting for the seller under an arrangement to that effect; or

•

the sale is made from premises that are:

-

used by an entity, other than the seller, mainly for making retail sales of wine; and

-

are held out to be the premises of, or premises used by, that other entity.^[20]

31. A royalty-inclusive sale occurs if the following conditions are met:

•

the sale is a retail sale;

•

the sale occurs in the course of a business;

•

the sale is not covered by another category of assessable dealing;

•

the seller incurs a royalty, that is paid or payable, in connection with the wine; and

•

the seller incurs a royalty at or before the time of the sale, or might reasonably be expected to incur such royalty after that time. Alternatively, the royalty is incurred by an associate of the seller or by an entity (except the manufacturer of the wine) under an arrangement with either the seller or an associate of the seller.^[21]

Application to own use

32. The following entities, if they are registered or are required to be registered for GST purposes, will have a liability to wine tax on wine which they apply to their own use:

•

the manufacturer of the wine;^[22] or

•

a person who obtained the wine under quote (see paragraphs 53 to 72);^[23] or

•

a person who obtained the wine as untaxed wine (e.g. purchased wine from a manufacturer who is not registered and is not required to be registered for GST).^[24]

33. The most common examples of wine being applied to own use are:

•

wine used for cellar door tastings;

•

wine used for tastings at exhibitions;

•

wine used for wine shows;

•

wine used for promotions;

•

wine donated to charity;

•

wine given to retailers, restaurants etc., as samples;

•

wine given to staff; and

•

wine taken for personal consumption.

34. The definition of application to own use^[25] excludes a sale of wine, consigning wine for sale on consignment and anything done with imported wine after importation but before it is locally entered. Application to own use also excludes using the wine as part of the process of manufacture or other treatment or processing of wine or other goods. This means that no liability to wine tax arises where wine, which has not previously been taxed, is used in this way. Examples of wine being used as part of the process of manufacture or other treatment or processing are where it is used for:

•

blending with other wine;

•

analysis and comparison;

•

testing and checking in the manufacturing process (including maturation);

•

quality control in the manufacturing process (including maturation).

35. Wine included as bonus wine with the sale of other wine as part of a contract of sale is not considered to be applied to the seller's own use. The bonus wine is sold with the other wine and the price attributable to the bonus wine is accepted as being included in the sale price of the wine. An example of this is where a bonus bottle of wine is included with the sale of a dozen bottles. In this case it is accepted that 13 bottles of wine are sold for the price of 12 bottles.

Royalty-inclusive application to own use

36. An application to own use of wine may be an assessable dealing even though someone has already borne wine tax on that particular wine. An example of this is a royalty-inclusive application to own use.^[26] The reason for taxing this assessable dealing is to ensure that wine is taxed on the full wholesale value. In this circumstance, there is a credit available for the tax previously borne on the wine by the applier.^[27]

37. A royalty-inclusive application to own use occurs if the following conditions are met by the entity that applied the wine to its own use (the applier):

•

the application to own use occurs in the course of a business;

•

the application to own use is not covered by another category of assessable dealing;

•

the applier incurs a royalty, that is paid or payable, in connection with the wine; and

•

the applier incurs a royalty at or before the time of the application to own use, or might reasonably be expected to incur such royalty after that time. Alternatively, the royalty is incurred by an associate of the applier or by an entity (except the manufacturer of the wine) under an arrangement with either the applier or an associate of the applier.^[28]

Local entry

38. A local entry of wine at the customs barrier is an assessable dealing.^[29]

Removal from a customs clearance area

39. Removal, from the customs clearance area, of wine purchased from an inwards duty free shop is an assessable dealing.^[30]

Do you need to specify the amount of wine tax on invoices?

40. Where you sell wine by wholesale, i.e., to a reseller, for a price that includes wine tax, you must specify the amount of the wine tax on the invoice given to the purchaser.^[31] The wine tax can be specified as a separate amount for each item of taxable wine on the invoice on a line by line basis or as a total amount for all the taxable wine on the invoice.

41. You do not have to specify the amount of wine tax where you sell wine by retail, i.e., to the end user, even if wine tax is payable on that transaction.

What exemptions can apply?

42. In some circumstances an assessable dealing with wine is exempt from wine tax. There are 5 categories of exemption:

•

the dealing is a supply that is GST-free^[32] or is a local entry that is a non-taxable importation for the purposes of the GST Act;^[33]

•

there is a quote given in respect of the dealing (see paragraphs 53 to 72);^[34]

•

the dealing is a customs dealing covered by one of the specified items in Schedule 4 to the Customs Tariff Act 1995;^[35]

•

there is a local entry of wine that has been taxed while in bond or under the control of Customs;^[36] and

•

there is a local entry of wine which was exported from Australia and is subsequently returned to Australia in an unaltered condition.^[37] This exemption applies where the importer has not previously received a refund of wine tax related to the export of the wine under the tourist refund scheme and is either the manufacturer of the wine or has previously paid wine tax when the wine was purchased or imported.^[38]

43. If an exemption applies to an assessable dealing, wine tax is not imposed on that dealing.^[39]

Are sales to overseas travellers exempt?

44. Sales to overseas travellers who take delivery of the wine in Australia are subject to wine tax and GST^[40] unless all of the following conditions are met:

•

the purchaser is not registered or required to be registered for GST;

•

the purchaser exports the wine from Australia;

•

the wine has been entered for export within the meaning of section 113 of the Customs Act 1901;

•

since the supply to the purchaser, the wine has not been altered or used in any way, except to the extent (if any) necessary to prepare it for export;

•

the supplier has sufficient documentary evidence to show that the wine was exported; and

•

the wine is exported within 60 days (or such further period as the Commissioner allows) after the earlier of:

-

the day on which the seller of the wine receives consideration for supply of the wine; or,

-

the day on which the seller gives an invoice for the supply of the wine.^[41]

45. Overseas travellers may be entitled to a refund of the wine tax and GST under the Tourist Refund Scheme at the point of departure from Australia if they still have the wine with them.^[42] The Tourist Refund Scheme is administered by the Australian Customs Service.

46. An overseas traveller may be eligible for a refund under the Tourist Refund Scheme if they:

•

have borne wine tax on the wine;^[43]

•

purchase at least $300 (including wine tax and GST) of eligible goods from the one registered person (the purchase does not have to be entirely of wine);^[44]

•

hold a single tax invoice for the goods;^[45]

•

export the goods as accompanied baggage within 30 days after the day on which they were acquired;^[46] and

•

leave Australia at an airport, or seaport, that has a Tourist Refund Scheme facility.^[47]

47. A refund under the Tourist Refund Scheme is not available if the wine has been partly consumed.^[48] A refund is also not available where the purchaser is leaving Australia in the course of their employment as either the person in charge or command of an aircraft or ship, or as a member of the crew of an aircraft or ship.^[49]

48. The amount of wine tax to be refunded under the Tourist Refund Scheme is calculated as 29% of half the purchase price of the wine (including wine tax and GST).^[50] For example, if wine is purchased by the overseas traveller for $320 including wine tax and GST the amount of wine tax to be refunded is calculated as follows:

29% * ($320 / 2) = $46.40


49. Overseas travellers can purchase wine from a Duty Free Store free of wine tax and GST under the sealed bag system.^[51]

Is a sale of wine taxable where you export the wine on behalf of the purchaser?

50. Where you export the wine on behalf of the purchaser (including overseas travellers) and you do not reimport the wine, exemption from wine tax and GST applies provided you export the wine within 60 days^[52] after the earlier of:

•

the day on which you receive any consideration for the supply of the wine; or

•

the day you give an invoice for the supply of the wine.^[53]

51. Where the consideration is provided in instalments, exemption from wine tax and GST applies provided you export (and you do not re-import) the wine within 60 days^[54] after the earlier of:

•

the day on which you receive any of the final instalment of the consideration for the supply of the wine; or

•

the day you give an invoice for the final instalment for the supply of the wine.^[55]

52. You should retain evidence of the export in your records to support treating the wine as exempt.

What is quoting?

53. Quoting is a mechanism to relieve or defer wine tax on wine to a later assessable dealing or to give effect to exemption from wine tax for a particular supply of wine.^[56]

54. If a quote is made in respect of an assessable dealing, then that dealing is exempt from wine tax. A quote for a sale must be made at or before the time of the sale, and for a customs dealing at or before the time of the dealing. In each case the quote is only effective if made in the form approved by the Commissioner.

55. The only form of quotation is the quotation by an entity registered for GST of their ABN. Although quoting an ABN enables wine to be supplied without wine tax being payable, the supply may still be subject to GST.

Grounds for quoting

56. There are 4 standard grounds for quoting an ABN. There is a quoting ground if, at the time of quoting, the quoter intends to:

•

sell the wine by wholesale or indirect marketing sale while the wine is in Australia;

•

sell the wine by any kind of sale while it is in Australia and the quoter is, at the time of quoting, mainly a wholesaler (see paragraph 58 for an explanation of when you are mainly a wholesaler);

•

use the wine as a material in manufacture or other treatment or processing, whether or not it relates to or results in other wine; or

•

make a supply of wine that will be GST-free.^[57]

However, you are not entitled to quote unless you are registered.^[58]

57. There is no quoting ground if the purchaser purchases the wine with the intention of applying the wine to the purchaser's own use. Application to own use does not include using the wine as a material in manufacture or other treatment or processing of wine or other goods so if the wine is purchased for this purpose it can still be purchased under quote.^[59]

58. You are mainly a wholesaler at the time of quoting only if:

•

wholesale sales and indirect marketing sales account for more than half the total value of all sales of assessable wine by you during the 12 months ending at the time of quoting; or

•

you have an expectation (based on reasonable grounds) that wholesale sales and indirect marketing sales will account for more than half of the total value of all sales of assessable wine by you during the 12 months starting at the time of quoting.^[60]

For the purpose of determining whether you are mainly a wholesaler, the value of a sale of wine is the price for which the wine is sold (including wine tax and GST).^[61]

59. A registered entity may also quote in special circumstances that fall outside the quoting grounds if the entity has received authorisation from the Commissioner.^[62]

Form of quoting

60. A quotation of an ABN must be made in writing, in the approved form, at or before the time of the dealing.^[63] The quotation can be made on the order for the wine, or any other document that contains definite identification of the wine that is the subject of the quotation and which is kept by the supplier, e.g., delivery slip, acknowledgment of receipt, duplicate invoice etc.

61. If you are importing wine and are entitled to and wish to obtain it free of wine tax under quote, you must quote your ABN to Customs. You can authorise your Customs Broker to quote your ABN on your behalf.

62. Purchasers who are permitted to quote can quote on each purchase or, where appropriate, give a periodic quote to each supplier to cover their purchases of wine for periods up to one year.^[64]

63. There is no need to ask for approval from the Tax Office before using a periodic quotation. Purchasers and suppliers can agree on any period, not exceeding one year, that best suits their needs.^[65]

64. A periodic quotation of an ABN can be accepted by any supplier.

65. The forms of quotation of your ABN are set out in Appendix B.

66. If you have given your supplier a periodic quotation and then make a purchase on which you are not entitled to quote, you must notify your supplier that you are not quoting for the purchase.^[66] The notification should be in the form shown in Appendix B.

Quoting by telephone, fax and electronic orders

67. The Tax Office will accept a two-stage quoting process when wine is ordered and exemption is claimed over the telephone. This process consists firstly of an oral reference to the ABN when ordering the wine, followed up by the written quotation within a reasonable time

68. In practice, this will allow a purchaser to claim exemption over the telephone, and provide the signed written quotation when paying the account. A single written statement that the wine was bought under quotation can cover all wine quoted for during the whole billing period, either by listing the invoice numbers on the quotation or by referring to the statement which includes the invoice numbers.

69. Where wine is ordered by facsimile, the full form of quotation should be used.

70. Where wine is purchased from a particular supplier by means of electronic data interchange, there is no need for a written quotation of ABN provided the following conditions are satisfied:

•

the purchaser indicates on the electronic order that their ABN is being quoted;

•

the supplier agrees to accept an electronic order; and

•

if the electronic order is lost or there are any other problems, the supplier must be able to provide evidence to the Tax Office that a quotation has taken place, e.g., keep a hard copy.

Who can sign the quotation?

71. Quotations of ABN should be made by the proprietor of the business or a person authorised to act for the proprietor. Persons authorised must have enough knowledge of the business so that they can speak with authority for the proprietor of the business about how the wine being acquired free of wine tax will be used. It is not necessary to advise the Tax Office who is authorised to sign the quotation but a record must be kept.

Situations where the purchaser is entitled to quote

72. The following are examples of situations where the purchaser is entitled to quote (in all cases it is assumed that the purchaser is registered for GST):

•

The purchaser is a wine wholesaler (who sells exclusively or mainly by wholesale) and intends to sell the wine.^[67]

•

The purchaser is a winemaker who intends to blend the wine with other wine.^[68]

•

The purchaser is a winemaker who intends to use the wine for analysis and comparison with wine they are manufacturing.^[69]

•

The purchaser, although selling wine mainly by retail, intends to sell the wine being purchased exclusively by wholesale.^[70]

•

The purchaser intends to export the wine as a GST-free supply. An example of an export of wine being a GST-free supply is where it is exported (and is not re-imported) within 60 days (or such further period allowed by the Commissioner) after the earlier of the day any of the consideration is received or an invoice is issued for the sale of the wine.^[71]

•

The purchaser is a Duty Free Store which sells to travellers who export the wine as accompanied baggage and the Duty Free Store operates under the sealed bag system (these sales are GST-free supplies by the Duty Free Store).^[72]

•

The purchaser is a hospital which provides the wine to patients as part of a hospital meal (these sales are GST-free supplies by the hospital as provision of the wine is directly related to hospital treatment).^[73]

•

The purchaser is a religious organisation which intends to supply the wine as an integral component of a religious service (this is a GST-free supply by the religious organisation).^[74]

•

The purchaser is a University/TAFE College which will supply the wine to students as part of course materials for a winemaker's course (this a GST-free supply by the University/TAFE College).^[75]

What value do you use to calculate the wine tax?

73. Wine tax is calculated on the taxable value of a taxable dealing.^[76] The discussion below refers to the normal taxable values which apply to arm's length transactions. These normal taxable values may be increased, e.g. where the transaction is not at arm's length^[77] or to include the value of royalties or containers.^[78]

Wholesale sales

74. For a taxable dealing with wine that is a wholesale sale, i.e., a sale to a reseller, the taxable value is the price for which the wine is sold (excluding wine tax and GST).^[79]

Example 2 - Wine tax and GST payable where taxable value is the price for which the wine is sold (excluding wine tax and GST)

75. Good Wines Winery Ltd sells a dozen bottles of wine to a restaurant for $120 (excluding wine tax and GST). The taxable value is $120.

76. The wine tax and GST payable on the wine by the winery are calculated as follows:

Other taxable dealings including retail sales and applications to own use

77. For most other taxable dealings, the taxable value is the notional wholesale selling price.^[80]

78. In the wine industry, retail sales by a wine manufacturer are a regular occurrence. Sales by cellar door and by mail order are the most common retail sales. Wine is also regularly applied to the manufacturer's own use when tastings are given at cellar door or promotional work is undertaken.^[81] The taxable value specified in the WET Act for these dealings with wine is the notional wholesale selling price.^[82]

79. The notional wholesale selling price is also used to determine the taxable value for retail sales which are indirect marketing sales.^[83]

80. Where the wine has been purchased free of wine tax under quote and applied to own use the taxable value is the purchase price (excluding GST).^[84] However, where the wine is imported under quote by the applier, the taxable value is the GST importation value.^[85]

Notional wholesale selling price for grape wine

81. There are two methods available for working out the notional wholesale selling price for a taxable dealing that is either a retail sale (including an indirect marketing sale) of grape wine or an application to own use which is connected with retail sales of grape wine.^[86] The half retail price method is used unless the average wholesale price method is chosen.^[87]

The half retail price method

82. Under this method, the notional wholesale selling price:

•

for retail sales of grape wine, is 50% of the price (including wine tax and GST) of those sales; and

•

for applications to own use connected with retail sales of grape wine, is 50% of the price (including wine tax and GST) for which you would normally have sold the wine if the sale were a retail sale.^[88]

Example 3 - Wine tax and GST payable under half retail price method

83. Good Wines Winery Ltd sells a bottle of grape wine at the cellar door to a retail customer, i.e., the end user of the wine, for $22 (including wine tax and GST). The winery chooses to use the half retail price method to calculate the notional wholesale selling price for its retail sales.

84. Wine tax payable by the winery is:

(50% * $22) * 29% = $3.19


85. GST payable by the winery is:

$22.00 / 11 = $2.00.


The average wholesale price method

86. You can choose to use this method if, during the tax period in respect of which the liability to pay wine tax arises, at least 10% by value of all sales of grape wine that:

•

is of the same vintage as the grape wine to which the dealing relates; and

•

is produced from the same grape varieties, or the same blend of grape varieties, as the grape wine to which the dealing relates,

are wholesale sales.^[89]

87. The average wholesale price is worked out using the weighted average of the prices (excluding wine tax and GST) for wholesale sales (including exports) of grape wine that fall into the above category for the tax period.^[90] When calculating the average wholesale price you may take into account any discounts, incentives, rebates and other payments that reduce the price for which the wine is sold.

Example 4 - Wine tax and GST payable under average wholesale price method

88. Good Wines Winery Ltd sells 1 dozen bottles of grape wine at the cellar door to a retail customer for $190 (including wine tax and GST). During the same tax period more than 10% of the winery's sales of wine of the same vintage and produced from the same grape varieties are wholesale sales. The winery chooses to use the average wholesale price method to calculate the notional wholesale selling price for its retail sales.

89. Good Wines Winery Ltd calculates that during the tax period 70% of wholesale sales of the same wine are at $80 per dozen (excluding wine tax and GST), and the remaining 30% are at $90 per dozen (excluding wine tax and GST). On this basis, the weighted average of the wholesale prices for wholesale sales made by the winery during the tax period is:

(70% * $80) + (30% * $90) = $83 per dozen


90. The wine tax payable by the winery under the average wholesale price method on the cellar door retail sale of 1 dozen bottles is:

29% * $83 = $24.07


91. The GST payable on the cellar door sale is:

$190 / 11 = $17.27


Grape wine sold by the glass

92. If you are a wine producer who sells grape wine by the glass at:

•

cellar door;

•

a winery restaurant; or

•

wine shows and festivals etc.,

you can calculate the taxable value of the wine as follows:

•

using the half retail price method: the taxable value of a glass of wine is 50% of the price (including wine tax and GST) for which the wine is sold by the glass; or

•

using the average wholesale price method: ascertain the number of bottles used to sell wine by the glass and use a taxable value per bottle equal to the average wholesale price for a bottle of the same wine (i.e. of the same vintage and produced from the same grape varieties or blend of grape varieties). N.B. You can only use this method if you satisfy the requirements set out in paragraphs 86 and 87.

Notional wholesale selling price for wine other than grape wine

93. The half retail price method must be used as the notional wholesale selling price for a taxable dealing that is either a retail sale of wine that is not grape wine or an application to own use connected with retail sales of wine that is not grape wine.^[91]

Wine other than grape wine sold by the glass

94. If you produce wine that is not grape wine and you sell the wine by the glass at:

•

cellar door;

•

a winery restaurant; or

•

wine shows and festivals etc.,

you must calculate the wine tax using a taxable value of 50% of the price (including wine tax and GST) of the glass of wine.

Notional wholesale selling prices for other dealings

95. The notional wholesale selling price for a taxable dealing with wine that is neither a retail sale of wine, nor an application to own use connected with retail sales of wine is the price (excluding wine tax and GST) for which the wine could reasonably have been expected to be sold by wholesale under an arm's length transaction.^[92]

Imported wine

96. An assessable dealing with wine which is taxable at the customs barrier - that is, a local entry - has a taxable value equal to the GST importation value of the wine.^[93] The GST importation value is the customs value plus the costs of transport, insurance and duty.^[94]

Additional amounts included in taxable value

97. Sometimes, not all the costs associated with wine are reflected in the taxable value. Where these costs are not already included, the WET Act requires amounts to be specifically added to the taxable value. Royalty payments associated with the wine and the value of the container in which the wine is sold are examples of costs which must be added to the taxable value of the wine where they have not already been included.^[95]

Royalty-inclusive sales and royalty-inclusive applications to own use

98. The taxable value for royalty-inclusive sales and royalty-inclusive applications to own use is the amount that would be the price (excluding wine tax and GST) for which you could reasonably have been expected to purchase the wine by wholesale under an arm's length transaction if the manufacturer or importer of the wine had incurred the royalty costs.^[96]

Apportionment of amounts where wine and other goods are sold together

99. If wine and other goods are packaged and sold together for one inclusive price, then the other goods will be treated separately for the purpose of calculating the amount for which the wine was sold. The amount for which the wine was sold is the price (excluding wine tax and GST) for which the wine could reasonably have been expected to have sold for separately.^[97]

100. Sometimes where wine is packed with other goods and sold together for one inclusive price, that sale price is less than the sum of the individual prices of the goods. Effectively, the individual prices of the goods are discounted by being sold as a package in comparison to what the prices would have been had the items been sold separately. In the absence of evidence to show a different apportionment would be more appropriate, the discount allowed for the package should be applied on a pro rata basis to establish the prices of the individual items.

Example 5 - Apportionment of amounts where wine and other goods are sold together.

101. Good Wines Winery Ltd sells wine with a wholesale price of $30 (excluding wine tax and GST), a corkscrew with a wholesale price of $15 (excluding GST) and a glass with a wholesale price of $5 (excluding GST) by wholesale in a package for $40 (excluding wine tax and GST). The total of the individual wholesale prices is $50. This means that Good Wines Winery Ltd gives a discount from the sum of the individual wholesale prices of 20%. This discount is applied to the normal wine price to produce a taxable value of $24 for calculation of the wine tax on the wholesale sale of the package by Good Wines Winery Ltd.

102. The wine tax and GST payable by Good Wines Winery Ltd is calculated as follows:

Non arm's length transactions (including staff sales, shareholder sales and sales to grape growers)

103. The wine tax liability on a non-arm's length transaction must be at least equal to the amount it would have been if the transaction had been an arm's length equivalent transaction.^[98]

104. Sales to staff, shareholders and grape growers at discounted prices are considered to be non-arm's length sales. Accordingly, wine tax for these sales is required to be paid based on prices that would be used in a similar arm's length transaction. For example, staff may be charged $100 (including wine tax and GST) per dozen for a quantity of wine while the normal retail price for the same wine sold in the same quantity is $150 (including wine tax and GST) per dozen. Wine tax on the staff sale should be calculated by reference to the normal retail price of $150 per dozen (wine tax payable is $21.75 per dozen using the half retail price method).

Delivery charges: freight and insurance costs

105. Normally, the price for which wine is sold includes charges for freight, postage or insurance where the wine is sold under a contract that provides that the sale price includes delivery. In these circumstances, property in the wine usually passes to the purchaser when it is delivered to the purchaser. The treatment of the charges in these circumstances is as follows:

•

the charges for freight, postage or insurance are included in the taxable value used to calculate the wine tax for wholesale sales of wine;

•

the charges for freight, postage or insurance are included in the retail selling price of the wine when calculating the notional wholesale selling price for retail sales of the wine using the half retail price method;

•

when calculating the notional wholesale selling price for retail sales of grape wine using the average wholesale price method, the wholesale prices on which the average wholesale price method is based includes charges for freight, postage and insurance where these charges form part of the wholesale selling price of the wine.

106. However, where delivery is the subject of a separate contract, charges for freight, postage or insurance will not usually form part of the sale price. It will be clear that charges for freight, postage or insurance will not form part of the sale price when:

•

the parties to the contract of sale genuinely intend property in the wine to pass without delivery at the price stated (e.g., there are no additional charges to customers who arrange for their own delivery and reasonable access is provided for them to collect the wine themselves); and

•

the amount for delivery is a competitive commercial charge, rather than reflecting a reduction in the price of the wine. That is, the charge does not exceed the amount that would have been charged to the buyer by an independent carrier (taking into account all the circumstances surrounding the transaction, including the buyer's ability to negotiate discounts).

107. The treatment of the charges for freight, postage and insurance in circumstances where they do not form part of the sale price is as follows:

•

The charges for freight, postage or insurance do not need to be included in the taxable value used to calculate the wine tax for wholesale sales of wine.

•

The charges for freight, postage or insurance do not need to be included in the retail selling price of the wine when calculating the notional wholesale selling price for retail sales of the wine using the half retail price method.

•

When calculating the notional wholesale selling price for retail sales of grape wine using the average wholesale price method, the wholesale prices on which the average wholesale price method is based will not need to include charges for freight, postage and insurance where these charges do not form part of the wholesale selling price of the wine.

Trade incentives

108. Trade incentives are allowed by suppliers to their customers in many different circumstances. Some of these incentives affect the price for which the wine was sold and hence the taxable value on which wine tax is payable, while others do not. Examples of trade incentive payments are trade discounts, settlement discounts, volume rebates, promotional rebates, co-operative advertising allowances and deferred credits.

109. In order to reduce the taxable value, the trade incentive must relate to the sale and the selling price of the wine, so as to bring about a reduction in that price. Factors relevant to determining whether or not an incentive reduces the sale price of the wine include:

•

the circumstances surrounding the provision of the incentive;

•

the accounting treatment of the incentive in the financial records of both the supplier and the customer;

•

the terms of trading between the parties and other sales documentation, such as invoices, incentive claim forms and credit notes; and

•

an objective assessment of the intention of the parties.

110. Examples of incentives which reduce the sale price of wine include:

•

Trade discounts - these are discounts allowed to trade customers.

•

Volume rebates and deferred credits - these are rebates that relate directly and solely to the volume or value of the wine sold and are calculated accordingly.

•

Settlement discounts - these are discounts which relate to the value of the wine provided by the supplier and are allowed because payment is made in cash or is made promptly.

111. However, incentives that are provided to subsidise, compensate, reimburse, or reward a customer for carrying out activities or performing services for the supplier do not reduce the selling price of the wine. This will be the case even if they are based on volume or value and however they may be described.

112. Examples of payments which do not usually reduce the sale price of wine include:

•

Promotional rebates, advertising rebates and cooperative advertising rebates - these are payments to purchasers to subsidise, compensate or reimburse them for advertising expenditure incurred in marketing the supplier's product.

•

Gondola end payments - these are payments made by the supplier for the retailer to provide end-of-aisle display space to promote the supplier's wine.

How do you pay the wine tax?

113. If you engage in taxable dealings with wine (other than the local entry of imported wine) you must add the wine tax payable to your net amount under the GST Act.99 This is done by entering the total amount of wine tax payable against Label 1C on the Business Activity Statement (BAS). The total of any wine tax credits is entered against Label 1D on the BAS.

114. If you import wine you are required to pay the wine tax to Customs at the time of the customs dealing unless you quote your ABN. This is so even where you have received approval from the Commissioner to defer the payment of GST on taxable importations.

When do you pay the wine tax?

115. For a taxable dealing with wine that is a supply for GST purposes, the wine tax payable is attributable to the same tax period or tax periods as they would be for GST.^[100] However, if the time of the dealing occurs after the end of that tax period or periods, the wine tax payable by you may be treated as being attributable to the tax period in which the time of the dealing occurs.^[101]

116. For a taxable dealing that is not a supply for GST purposes (e.g. an application to own use), the wine tax payable is attributable to the tax period in which the time of the dealing occurs.^[102]

Producer rebates

Can you claim a rebate for cellar door and mail order sales?

117. The Commonwealth and the States and Territories operate separate rebate/subsidy schemes. Eligibility requirements for the Commonwealth producer rebate and some State or Territory subsidy schemes vary.

118. Where you meet the eligibility requirements for both the Commonwealth producer rebate and a State or Territory subsidy scheme, the combined effect is that the wine tax payable on eligible rebatable dealings (these include cellar door and mail order retail sales, and wine used for tastings and promotions and other applications to own use) that do not exceed a wholesale value of $300,000 each financial year will be fully rebated. This is achieved by the Commonwealth paying a rebate of 14% in addition to the 15% subsidy provided to producers of wine by the States and Territories. The wholesale value in this context refers to the notional wholesale selling price you use to calculate the wine tax on the eligible rebatable dealings i.e., half the retail price (including wine tax and GST) or, where applicable, the weighted average of your wholesale prices (excluding wine tax and GST).

119. The Commonwealth producer rebate tapers to zero where the producer's eligible annual sales are between $300,000 and $580,000 (wholesale value). Where the annual sales are $580,000 or more (wholesale value), only the 15% State or Territory subsidy applies.

120. The following is an explanation of the operation of the Commonwealth producer rebate scheme. You will need to contact the relevant State or Territory authority for information about the subsidy schemes they operate.

Rebatable wine

121. The producer rebate does not apply to all wine covered by the WET Act. It applies to the following types of wine referred to as rebatable wine:

•

grape wine;

•

grape wine products;

•

fruit or vegetable wine; and

•

mead.^[103]

Eligible producers

122. To be eligible for the producer rebate you must be a producer of rebatable wine.^[104] A producer is defined as an entity that:

•

manufactures the wine, or supplies to another entity the grapes, other fruit, vegetables or honey from which the wine is manufactured; and

•

holds a producer's licence.^[105]

123. You will be regarded as the producer of the wine where you purchase and/or produce fruit, vegetables or honey and supply the fruit, vegetables or honey to a contract winemaker to be made into wine. Accordingly, you will be eligible for the producer rebate for eligible retail sales and applications to own use of this wine. However, if you merely purchase bottled wine or bulk wine for bottling you will not be eligible for a producer rebate on this wine as you are not the producer of the wine.

124. A producer's licence is a licence issued under a State or Territory law which allows the holder to make retail sales of wine from particular premises as a wine producer or a vigneron. It does not include other types of licences that allow the holder to make retail sales of wine. The definition of producer's licence also allows the Commissioner to determine other categories of licences issued by States or Territories, that are provided in a similar capacity to producer or vigneron licences, to be producer's licences.^[106]

Eligible retail sales and applications to own use

125. The rebate applies to certain retail sales and applications to own use of rebatable wine where:

•

you are the producer of the rebatable wine;

•

you hold a producer's licence; and

•

you are liable to pay wine tax for the dealing.^[107]

126. The retail sales must take place from premises to which the producer's licence relates and must not contravene the State or Territory law under which the licence was issued or any conditions which the licence is subject to.^[108] Retail sales at special events, festivals etc., will need to be covered by the producer's licence (or an extension of that licence) in order to be eligible for the rebate. They will not be eligible if they are made under a special licence obtained by the organiser of the event or festival or another separate licence obtained by the producer. Mail order and Internet sales made under a producer's licence are accepted as being sales from premises to which the producer's licence relates.^[109] However, where a commission is payable to a third party in respect of mail order or Internet sales, or the third party deducts an amount as commission from the sale proceeds, these sales are not rebatable.^[110]

127. The rebate therefore applies to the following assessable dealings with rebatable wine by eligible producers:

•

cellar door retail sales where the sale is from premises to which the producer's licence relates;

•

mail order and Internet retail sales where there was no commission payable to a third party; and

•

applications to own use (includes wine used for tasting and promotional activities and wine given away).

Winery restaurants

128. The producer rebate does not apply where wine is sold in the course of providing to the purchaser of the wine, other food that is for consumption on premises from which it is supplied.^[111] For example, you may have a cellar door outlet and also operate a restaurant or café from the same or an adjacent site. In these circumstances, you are not eligible for the producer rebate for wine sold in the restaurant or café under your producer's licence where it is sold in the course of providing food that is to be consumed on the premises. Similarly, if the restaurant or café is covered by a separate licence (not being a producer's licence, a vigneron's licence or equivalent), you will not be eligible for the producer rebate for sales of wine made under that licence. However, you will be eligible to claim the rebate for wine you sell at the cellar door under your producer's licence which is later consumed in the restaurant under a BYO or similar licence. The eligibility for the rebate in these circumstances will not be affected by a charge for corkage in the restaurant or café provided the amount charged is reasonable.

Annual rebatable turnover and calculation of the amount of producer rebate

129. The annual producer rebate is calculated from the producer's annual rebatable turnover of rebatable wine for a particular producer's licence. The annual rebatable turnover is calculated for each financial year as the sum of:

•

the notional wholesale selling price of all eligible retail sales of rebatable wine the producer makes in that financial year under that licence; and

•

the notional wholesale selling prices of all applications to own use of rebatable wine the producer makes in that financial year under that licence.^[112]

Annual rebatable turnover is $300,000 or less

130. Where the annual rebatable turnover for a particular producer's licence is $300,000 or less, the amount of the producer rebate for that financial year is 14% of that turnover.^[113]

Annual rebatable turnover is more than $300,000 but less than $580,000

131. If the annual rebatable turnover of rebatable wine for a particular producer's licence is more than $300,000 but less than $580,000, the amount of the producer rebate is calculated using the formula:

$42,000 - ((annual rebatable turnover - $300,000) * 15%)[114]


Annual rebatable turnover is $580,000 or more

132. If the annual rebatable turnover of rebatable wine for a particular producer's licence is $580,000 or more, no producer rebate is claimable.^[115]

133. Refer to paragraphs 136 to 155 for an explanation about calculating the producer rebate.

Cellar door operations at more than one location

134. The annual producer rebate is linked to a producer's annual rebatable turnover of rebatable wine for a particular producer's licence. Accordingly, eligible producers who conduct operations at more than one licensed premises and who hold separate producer's licences for each premises will have the annual rebatable turnover apply to each licensed premises. Where a producer's licence covers more than one premises, the producer's annual rebatable turnover for that particular licence includes all eligible retail sales of rebatable wine made from all premises covered by that particular licence and all applications to own use.

135. For the purposes of the rebate, eligible mail order and Internet sales should be allocated to the producer's licence under which the sale was made.

How do you calculate the producer rebate?

Annual rebatable turnover is $300,000 or less

136. Where your annual rebatable turnover for the financial year is $300,000 or less, the producer rebate is 14% of your annual rebatable turnover.^[116]

137. If you estimate your annual rebatable turnover for the current financial year will be $300,000 or less you can claim the producer rebate in each tax period. The rebate will be 14% of the notional wholesale selling prices of your eligible retail sales and applications to own use of rebatable wine in the relevant period.

Annual rebatable turnover is more than $300,000 but less than $580,000

138. Where your annual rebatable turnover for the financial year is more than $300,000 but less than $580,000 the producer rebate for the year is $42,000 less 15% of the annual rebatable turnover in excess of $300,000.^[117]

Example 6 - Calculating your producer rebate

139. Good Wines Winery Ltd has an annual rebatable turnover for the financial year of $430,000.

140. The winery's producer rebate for the year is:

($42,000 - (($430,000 - $300,000) * 15%)) = $22,500.


141. If you estimate your annual rebatable turnover for the financial year will be more than $300,000 but less than $580,000 you need to ensure that you do not overclaim the producer rebate in the BAS for the early periods in the financial year.

142. To prevent overclaiming the producer rebate you should calculate the total rebate claimable for the financial year based on estimates of your annual rebatable turnover. You can then claim the appropriate proportion of the estimated rebate on each BAS (e.g., if you lodge quarterly you can claim one quarter of the estimated rebate payable for the financial year in each of the first 3 quarters).^[118]

Example 7 - Estimating your producer rebate

143. Fine Wines Winery Ltd estimates its annual rebatable turnover for the financial year will be $430,000 and lodges a quarterly BAS.

144. The winery can claim a producer rebate of ($22,500 / 4) = $5,625 in the BAS for each of the first 3 quarters of the financial year.

145. When the actual figures are available for your annual rebatable turnover you can use the claim included in your final BAS for the financial year to adjust the producer rebate claim to the correct amount.

Example 8 - Adjusting your producer rebate claim

146. Continuing example 7, except that Fine Wines Winery Ltd's actual annual rebatable turnover for the financial year is $450,000.

147. The rebate it can claim in its BAS for the 4th quarterly period is $2,625 calculated as follows:

Annual rebatable turnover is $580,000 or more

148. Where your annual rebatable turnover for the financial year is $580,000 or more the producer rebate is nil.

149. If you estimate your annual rebatable turnover for the financial year will be $580,000 or more you should not make claims for the producer rebate throughout the year. If, at the end of the financial year, you find that your annual rebatable turnover is actually less than $580,000 you can claim the rebate in your final BAS for the financial year.

Claiming the producer rebate

150. The producer rebate is claimed on the BAS by adding the rebate to the total amount of wine tax credits claimed and entering this total amount against Label 1D (wine equalisation tax refundable) on the BAS.

151. The 15% subsidy payable by the States and Territories is claimable from the relevant State or Territory department. It must not be claimed on the BAS.

Producer rebate overclaimed

152. Where, as a result of using estimates in earlier periods, the amount of the producer rebate is overclaimed for a financial year, an amount equal to the overclaimed amount is payable. The amount payable as a result of an overclaim is treated as if it were wine tax attributable to the last tax period of the financial year in which the claim was made.^[119]

Example 9 - Repaying amounts of producer rebate overclaimed

153. Good Wines Winery Ltd lodges its BAS on a quarterly basis. It has made rebate claims in the first 3 quarterly periods of the financial year totalling $38,000. The winery's annual rebatable turnover for the financial year is $350,000 (wholesale value).

154. Accordingly, the winery has overclaimed the rebate by $3,500 calculated as follows:

155. Good Wines Winery Ltd must include the amount overclaimed, i.e., $3,500, as wine tax payable in the BAS for the 4th quarterly period of the financial year. Good Wines Winery Ltd cannot claim the producer rebate in the 4th quarter.

When can you claim wine tax credits?

156. There are 6 broad categories of grounds for wine tax credits available under the WET Act:

•

credits for overpaid wine tax;

•

credits to avoid wine being taxed twice;

•

producer rebates;

•

export-related credits;

•

import-related credits; and

•

credits for bad debts.^[120]

157. Examples of situations where credit claims commonly arise are as follows:

•

A wholesaler purchases wine to sell by wholesale and, although satisfying the requirements to quote, the wholesaler forgets to quote its ABN and wine tax is included in the purchase price. The wholesaler is entitled to a credit for the wine tax borne on the wine when it was purchased.^[121]

•

A wine manufacturer purchases wine to blend with other wine and although satisfying the requirements to quote, the manufacturer forgets to quote its ABN and wine tax is included in the purchase price. The wine manufacturer is entitled to a credit for the wine tax borne on the wine when it was purchased.^[122]

•

A retailer/wholesaler sells wine by wholesale from stock the retailer/wholesaler purchased at prices which included the wine tax. The retailer/wholesaler is required to pay wine tax on the wine sold by wholesale, but is entitled to a credit for the wine tax borne on the wine when it was purchased by the retailer/wholesaler.^[123]

•

A retailer with stock which was purchased at prices which included wine tax sells wine to a purchaser who quotes an ABN. The retailer is entitled to a refund of the wine tax borne on the wine when it was purchased, provided the wine tax is excluded from the retailer's sale price.^[124]

•

A wholesaler sells wine by wholesale in taxable circumstances and pays wine tax on the sale. Subsequently the wholesaler allows a settlement discount on the sale. The wholesaler is entitled to a credit for the amount of wine tax included in the discount allowed.^[125]

•

A retailer with stocks of wine purchased at prices including wine tax sells wine to a customer overseas and exports the wine to the customer as a GST-free supply. The retailer is entitled to a credit for the amount of the wine tax borne on the exported wine provided the wine tax is excluded from the retailer's sale price.^[126]

•

A wholesaler sold wine by wholesale and paid wine tax on the sale. Part of the amount of the sale is later written off as a bad debt. The wholesaler is entitled to a credit for a proportion of the wine tax paid equal to the proportion of the debt written off.^[127]

•

A wine exporter who purchased wine from a person registered for GST at a price which included wine tax sells the wine to a customer overseas and exports the wine as a GST-free supply. The exporter is entitled to a credit of the wine tax they have borne on the exported wine provided the wine tax is excluded from the exporter's sale price.^[128] Where the exporter is not in a position to know the amount of wine tax they have actually borne on the wine, they may calculate the amount borne as follows:

29% of half the purchase price of the wine (including wine tax and GST) less any wine tax included in the price that has been refunded or credited to the exporter.


•

A person purchases wine from a wine producer or from a retail bottle shop and exports the wine whilst retaining ownership of the wine. The person is entitled to a credit of the wine tax they have borne on the exported wine.^[129] Where the person is not in a position to know the amount of wine tax they have actually borne on the wine, they may calculate the amount borne as follows:

29% of half the purchase price (including wine tax and GST) less any wine tax included in the price that has been refunded or credited to the person.


How do you claim wine tax credits?

158. If you are a registered entity, you may claim wine tax credits as a reduction in your net amounts due under the GST Act.^[130] This is done by entering the total amount of wine tax credits being claimed against label 1D on your BAS. There is no monetary limit for credits claimed as reductions in a registered entity's GST liability.

159. If you are an entity that is not registered or required to be registered for GST, you may claim credits as a direct refund from the Tax Office.^[131] Direct refunds are not available for amounts totalling less than $200.^[132] However, individual claims may be aggregated to reach the $200 minimum amount.

160. In the case of a credit arising in relation to a sale of wine, to be refundable, most of the credit grounds require that the wine tax must not have been passed on to the purchaser or, if passed on, have since been refunded to the purchaser.^[133]

161. If it would otherwise be greater than the arm's length amount, the wine tax credit on a non-arm's length transaction must be reduced to the amount it would have been if the transaction had been an arm's length transaction.^[134]

162. All claims for credits must be made within 4 years after the time when the wine tax credit arises.^[135]

What records do you need to keep and how long do you need to keep them?

163. If you are liable to wine tax on a taxable dealing or are entitled to a wine tax credit, you are required to keep records of all transactions that relate to the dealing or credit claim for a period of 5 years after completion of the transactions or acts to which they relate.^[136]

164. The records must be in English or readily accessible and convertible into English. Your wine tax liability must also be able to be readily determined from your records.^[137]

Detailed contents list

165. Below is a detailed contents list for this Wine Equalisation Tax Ruling:

Commissioner of Taxation
18 December 2002

Appendix A

Wine Equalisation Tax

Set out below are the definitions of alcoholic products for the purposes of the WET Act. The definitions incorporate the requirements of the regulations set out in the A New Tax System (Wine Equalisation Tax) Regulations 2000. The wine equalisation tax applies to alcoholic products which satisfy the definitions and contain more than 1.15% by volume of ethyl alcohol. Some examples of products that satisfy the various definitions and products that do not are provided - the examples are only covered by the definitions where they meet the requirements in the column on the left. Alcoholic products containing more than 1.15% by volume of ethyl alcohol not covered by the wine equalisation tax are subject to the excise/duty regime.

Appendix B

A quotation of an ABN should be in the following form:

A periodic quotation of an ABN should be in the following form:

Where you have a periodic quotation in place but are not entitled to quote on a particular transaction you should provide the supplier with a notification in the following form:

A quotation to Customs should be in the following form:

Note:

•

The Customs Broker must enter the client's Australian Business Number in the space provided in the quotation form.

•

The Customs Broker must specify in writing, (in the space provided in the quotation form), the particular wine for which they are quoting their client's ABN.

Not previously issued in draft form.

References

ATO references:
NO 2002/020358

Related Rulings/Determinations:

EB 2000/1
WETR 2002/1

Subject References:
application to own use
assessable dealing
average wholesale price method
business activity statement
credit ground
eligible producers
GST
GST importation value
half retail price method
imported wine
indirect marketing sales
net amount
notional wholesale selling price
producer rebate
quotation
quoting
rebatable wine
record keeping
retail sales
royalty-inclusive sales
sealed bag system
taxable value
tourist refund scheme
untaxed sales
wholesale sales
wine equalisation tax
wine tax
wine tax credits

Legislative References:
ANTS(WET)A 1999 5-5
ANTS(WET)A 1999 5-5(2)
ANTS(WET)A 1999 5-5(2)(c)
ANTS(WET)A 1999 5-5(3)
ANTS(WET)A 1999 5-5(4)
ANTS(WET)A 1999 5-5(4) AD1a
ANTS(WET)A 1999 5-5(4) AD1b
ANTS(WET)A 1999 5-5(4) AD2a
ANTS(WET)A 1999 5-5(4) AD2b
ANTS(WET)A 1999 5-5(4) AD2c
ANTS(WET)A 1999 5-5(4) AD2d
ANTS(WET)A 1999 5-5(4) AD2e
ANTS(WET)A 1999 5-5(4) AD3a
ANTS(WET)A 1999 5-5(4) AD3b
ANTS(WET)A 1999 5-5(4) AD3c
ANTS(WET)A 1999 5-5(4) AD3d
ANTS(WET)A 1999 5-5(4) AD10
ANTS(WET)A 1999 5-5(4) AD11b
ANTS(WET)A 1999 5-5(4) AD12b
ANTS(WET)A 1999 5-5(4) AD12c
ANTS(WET)A 1999 5-5(4) AD12d
ANTS(WET)A 1999 5-5(4) AD12e
ANTS(WET)A 1999 5-5(4) AD13a
ANTS(WET)A 1999 5-5(4) AD13c
ANTS(WET)A 1999 5-5(4) AD13d
ANTS(WET)A 1999 5-5(4) AD14b
ANTS(WET)A 1999 5-15
ANTS(WET)A 1999 5-20
ANTS(WET)A 1999 5-25
ANTS(WET)A 1999 5-30
ANTS(WET)A 1999 7-5
ANTS(WET)A 1999 7-10
ANTS(WET)A 1999 7-15
ANTS(WET)A 1999 7-20
ANTS(WET)A 1999 7-25
ANTS(WET)A 1999 9-25(2)
ANTS(WET)A 1999 9-25(3)
ANTS(WET)A 1999 9-30
ANTS(WET)A 1999 9-35
ANTS(WET)A 1999 9-40
ANTS(WET)A 1999 9-45
ANTS(WET)A 1999 9-65
ANTS(WET)A 1999 9-70
ANTS(WET)A 1999 13-5
ANTS(WET)A 1999 13-5(1)
ANTS(WET)A 1999 13-5(1)(a)
ANTS(WET)A 1999 13-5(1)(b)
ANTS(WET)A 1999 13-5(1)(c)
ANTS(WET)A 1999 13-5(1)(d)
ANTS(WET)A 1999 13-5(2)
ANTS(WET)A 1999 13-5(3)
ANTS(WET)A 1999 13-10
ANTS(WET)A 1999 13-15
ANTS(WET)A 1999 13-15(1)
ANTS(WET)A 1999 13-15(3)
ANTS(WET)A 1999 13-20
ANTS(WET)A 1999 17-5
ANTS(WET)A 1999 17-5 CR 1
ANTS(WET)A 1999 17-5 CR 2
ANTS(WET)A 1999 17-5 CR 4
ANTS(WET)A 1999 17-5 CR 5
ANTS(WET)A 1999 17-5 CR 6
ANTS(WET)A 1999 17-5 CR 10
ANTS(WET)A 1999 17-5 CR 11
ANTS(WET)A 1999 17-5 CR 15
ANTS(WET)A 1999 17-10(1)
ANTS(WET)A 1999 17-10(2)
ANTS(WET)A 1999 17-10(3)
ANTS(WET)A 1999 17-15
ANTS(WET)A 1999 19-5
ANTS(WET)A 1999 19-5(1)
ANTS(WET)A 1999 19-5(1)(c)
ANTS(WET)A 1999 19-5(1)(d)
ANTS(WET)A 1999 19-5(2)
ANTS(WET)A 1999 19-5(4)(a)
ANTS(WET)A 1999 19-5(4)(b)
ANTS(WET)A 1999 19-5(4)(c)
ANTS(WET)A 1999 19-10(1)
ANTS(WET)A 1999 19-10(2)
ANTS(WET)A 1999 19-15(1)
ANTS(WET)A 1999 19-15(2)
ANTS(WET)A 1999 19-15(4)
ANTS(WET)A 1999 19-20
ANTS(WET)A 1999 21-5
ANTS(WET)A 1999 21-15
ANTS(WET)A 1999 21-10
ANTS(WET)A 1999 21-10(2)
ANTS(WET)A 1999 21-15
ANTS(WET)A 1999 25-5(1)(a)
ANTS(WET)A 1999 25-5(1)(b)
ANTS(WET)A 1999 25-5(1)(c)
ANTS(WET)A 1999 27-5
ANTS(WET)A 1999 27-10
ANTS(WET)A 1999 27-15(1)
ANTS(WET)A 1999 31-1
ANTS(WET)A 1999 31-2
ANTS(WET)A 1999 31-3
ANTS(WET)A 1999 31-4
ANTS(WET)A 1999 31-5
ANTS(WET)A 1999 31-6
ANTS(WET)A 1999 31-7
ANTS(WET)A 1999 31-15
ANTS(WET)A 1999 33-1
ANTS(WET)R 2000 25-5.02(1)(b)
ANTS(WET)R 2000 25-5.02(2)
ANTS(WET)R 2000 25-5.03
ANTS(WET)R 2000 31-2.01
ANTS(WET)R 2000 31-4.01
ANTS(WET)R 2000 31-6.01
ANTS(GST)A 1999 13-20
ANTS(GST)A 1999 Subdiv 38-D
ANTS(GST)A 1999 38-185(1)
ANTS(GST)A 1999 38-185(1) item1
ANTS(GST)A 1999 38-185(1) item2
ANTS(GST)A 1999 38-185(1) item7
ANTS(GST)A 1999 38-185(3)
ANTS(GST)A 1999 195-1
ANTS(GST)R 1999 38-185.01
ANTS(GST)R 1999 168-5.04
ANTS(GST)R 1999 168-5.05
ANTS(GST)R 1999 168-5.06
ANTS(GST)R 1999 168-5.07
ANTS(GST)R 1999 168-5.09
ANTS(GST)R 1999 Schedule 5
Customs Tariff Act 1995 Schedule 4 item 4
Customs Tariff Act 1995 Schedule 4 item 8
Customs Tariff Act 1995 Schedule 4 item 15
Customs Tariff Act 1995 Schedule 4 item 18A
Customs Tariff Act 1995 Schedule 4 item 18B
Customs Tariff Act 1995 Schedule 4 item 18C
Customs Tariff Act 1995 Schedule 4 item 21
Customs Tariff Act 1995 Schedule 4 item 21A
Customs Tariff Act 1995 Schedule 4 item 24
Customs Tariff Act 1995 Schedule 4 item 33B
Customs Act 1901
TAA 1953 36(1)
TAA 1953 37
TAA 1953 70(1)(e)
TAA 1953 70 (2)

Other References:
Wine equalisation tax - new wine producer rebate (NAT 11779)