ATO Interpretative Decision

ATO ID 2004/110 (Withdrawn)

Excise

Wine Equalisation Tax: wholesale liquor merchant - Commonwealth producer rebate and producer's licence
FOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Is a wholesale liquor merchant's licence issued by the South Australian Government to a wine producer a 'producer's licence' as defined in section 33-1 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Decision

Yes. A wholesale liquor merchant's licence issued by the South Australian Government to a wine producer is a 'producer's licence' as defined in section 33-1 of the WET Act.

Facts

A holder of a wholesale liquor merchant's licence issued by the Office of the Liquor and Gaming Commissioner South Australia, grows grapes and produces wine from those grapes. Subject to certain conditions, the licence allows the licensee to make retail sales of the wine they have produced. The wine is sold from the licence holder's licensed premises. The licensed premises are premises used by the licence holder for the production of the wine. No other liquor licence is held by the wine producer.

Reasons for Decision

The term 'producer's licence' is defined in section 33-1 of the WET Act to mean a licence issued under a State law or a Territory law to make retail sales of wine from particular premises:

•
as a wine producer or vigneron; or
•
in a similar capacity determined in writing by the Commissioner.

In South Australia, producer's licences are issued under the Liquor Licensing Act 1997. However, a producer's licence only authorises the holder to sell the licensee's own product. Alcoholic beverages that are purchased for resale are not regarded as the licensee's own product. Accordingly, where an entity that produces wine wishes to sell both their own product and alcoholic beverages that they have purchased for resale, they are required to hold another type of licence.

Subject to certain conditions, a wholesale liquor merchant's licence enables the holder to sell (via retail or wholesale) both their own product and products purchased for resale.

The fact that a wholesale liquor merchant's licence provides the holder with powers beyond those specified in the definition of a 'producer's licence' in section 33-1 of the WET Act, does not prevent the licence from being considered a 'producer's licence'. As the wholesale liquor merchant's licence is issued under a State law, and permits the holder to make retail sales of wine from particular premises as a wine producer or vigneron, it is a 'producer's licence' as defined in section 33-1 of the WET Act.

Date of decision:  24th January 2004

Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
   section 33-1

Related ATO Interpretative Decisions
ATO ID 2003/947

Keywords
WET producer rebate
Wine
Wine equalisation tax

Business Line:  Excise

Date of publication:  6 February 2004

ISSN: 1445-2782

history
  Date: Version:
  24 January 2004 Original statement
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