ATO Interpretative Decision
ATO ID 2003/941 (Withdrawn)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This ATO ID is withdrawn and is replaced by ATO ID 2004/30This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 which has been excluded from the selling price. The amount of WET borne on the wine must be determined by reference to documentary evidence showing the amount of WET actually borne on the wine.
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 17-5 of the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act) sets out the grounds where an entitlement to a credit of WET arises. The 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 GST-free supply of tax paid wine | You sold wine of 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 not registered for GST (for example wine was purchased at auction from a private individual not registered for GST) it is not possible to accurately estimate the amount of WET borne on the wine. This is because it is difficult to determine the point where WET was paid in the chain of transactions that occurred before the wine was purchased.
Accordingly, where the wine was purchased from persons not registered for GST the amount of WET must be determined using documentary evidence which shows the actual amount of WET charged on the wine at some point in the chain of transactions. In these circumstances, where documentary evidence of the WET borne cannot be supplied a credit claim will not be allowed.
Date of decision: 1 October 2003
Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
section 17-5
section 31-10
section 38-185
Related Public Rulings (including Determinations)
Wine Equalisation Tax Ruling WETR 2002/2
Keywords
WET credit
Wine equalisation tax
ISSN: 1445-2782
| Date: | Version: | |
| 1 October 2003 | Original statement | |
| You are here | 16 January 2004 | Archived |