ATO Interpretative Decision

ATO ID 2012/76

Excise

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Does the refund circumstance at paragraph 50(1)(zzd) of the Excise Regulations 1925 apply to beer that is entered for home consumption under either subitem 1.15 or 1.16 in the Schedule to the Excise Tariff Act 1921?

Decision

No. Because beer under subitems 1.15 and 1.16 of the Schedule to the Excise Tariff Act is not sold, paragraph 50(1)(zzd) of the Excise Regulations does not apply.

Facts

A brewery is operated by an entity that is legally and economically independent of any other entity that operates a brewery.

The entity sells, directly from the brewery, beer they manufacture at the brewery. Excise duty is paid on the beer that is sold.

The brewing equipment and facilities of the brewery are also made available to individuals to brew their own beer. The individuals pay for the ingredients, use of the equipment, recipes and are responsible for their own brews.

Beer brewed by the individuals is not sold at the brewery. The operator of the brewery enters the beer for home consumption under subitems 1.15 or 1.16 of the Schedule to the Excise Tariff Act and pays excise duty.

Reasons for Decision

Section 78 of the Excise Act 1901 provides that a refund of excise duty may be allowed in prescribed circumstances. The prescribed circumstance at paragraph 50(1)(zzd) of the Excise Regulations includes:

excise duty has been paid on beer that is manufactured in an eligible brewery during a financial year starting on or after 1 July 2012, ...

Paragraph 50(1)(zzd) of the Excise Regulations does not appear to directly limit its application to beer that is sold from the brewery, however, the meaning of the term 'eligible brewery' is given in regulation 3 which states:

An eligible brewery is a brewery that:

(a)

is operated by an entity that is legally and economically independent of any other entity that operates a brewery; and

(b)

sells beer (whether wholesale or retail), on which excise has been paid, directly from the manufacturing premises of the brewery.

Paragraph 50(1)(zzd) was amended by the Excise Amendment Regulations 2012 (No. 3) which also inserted regulation 3. The Commissioner considers that reading paragraph 50(1)(zzd) and regulation 3 together and in context, the beer referred to in the refund circumstance is the beer which qualifies the brewery as an eligible brewery. That is, the beer referred to in paragraph 50(1)(zzd) must be beer that is sold from the manufacturing premises of the brewery.

Beer described at subitems 1.15 or 1.16 of the Schedule to the Excise Tariff Act is beer of a particular strength of alcohol by volume and which is produced for non-commercial purposes using commercial facilities or equipment. This is beer that is not sold. Although the beer is made using the equipment of the brewery, neither the brewery nor anyone else sells it from the manufacturing premises of the brewery.

Hence, the refund circumstance in paragraph 50(1)(zzd) of the Excise Regulations does not apply to beer entered for home consumption under subitems 1.15 or 1.16 in the Schedule to the Excise Tariff Act.

Amendment History

Legislative References:
Excise Act 1901
   section 78

Keywords
Excise

Siebel/TDMS Reference Number:  1-46TOYRS

Business Line:  Indirect Tax

Date of publication:  17 September 2012

ISSN: 1445-2782