Edited version of your private ruling

Authorisation Number: 1012474065666

Ruling

Subject: Classification of beverage

Question 1

If you import wine into Australia, can you defer paying wine equalisation tax (WET) by quoting your Australian Business Number to the Australian Customs and Border Protection Service?

Answer

No

Question 2

If you import wine into Australia, can you defer paying goods and services tax (GST) to the Australian Customs and Border Protection Service under the GST deferral scheme?

Answer

No

Question 3

If you are not entitled to quote your ABN or defer GST, are WET and GST payable to the Australian Customs and Border Protection Service when you import wine?

Answer

Yes

This ruling applies for the following periods:

From 15 May 2013

The scheme commences on:

Unknown

Relevant facts and circumstances

1. You reside outside of Australia.

2. You intend on shipping wine to Australia for sale.

3. You do not have a Tax File Number or an Australian Business Number (ABN).

4. You state that you have applied for an ABN.

5. You state that you are not registered and not required to be registered for GST in Australia.

Relevant legislative provisions

A New Tax System (Wine Equalisation Tax) Act 1999 Section 5-5

A New Tax System (Wine Equalisation Tax) Act 1999 Section 13-5

A New Tax System (Wine Equalisation Tax) Act 1999 Section 13-35

Reasons for decision

Question One

WET is imposed under the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) on assessable dealings with wine.

An assessable dealing is an act, event or transaction with assessable wine that triggers a WET liability. The Assessable Dealings Table given in section 5-5 of the WET Act, sets out all the assessable dealings that can be subject to WET. An assessable dealing is taxable unless an exemption applies.

Importation of wine

A local entry of wine is classified in the Assessable Dealings Table at AD10.

Some of the common situations that amount to a local entry are:

· Commercial shipment of wine that requires a formal customs entry

· Wine delivered from a customs warehouse, and

· A personal shipment of wine via international mail that does not require a formal customs entry.

If you have an assessable dealing with wine that is a local entry, WET is payable to the Australian Customs and Border Protection Service at the time of importation, unless you are entitled to quote your ABN.

Quoting

Section 13-5 of the WET Act states that an entity is entitled to quote its ABN for dealing with wine if, at the time of quoting, the entity is registered for GST in Australia and intends to:

6. Sell the wine by wholesale or by indirect marketing sale

7. Sell the wine by, any kind of sale, and the entity is mainly a wholesaler

8. 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

9. Make a supply of the wine that will be GST-free.

The quotation must be made by the purchaser in the correct form and at or before the time of the dealing. If a valid quotation is received, it has the effect of deferring the WET otherwise included on the dealing, to a later assessable dealing with the wine.

It is an offence under section 13-35 of the WET Act to quote your ABN if you are not entitled to quote on the dealing with the wine.

As you are not registered or required to be registered for GST, you are not entitled to quote your ABN to the Australian Customs and Border Protection Service and therefore not entitled to defer WET to a later assessable dealing.

Question 2

The GST deferral scheme allows importers to defer payment of GST on all taxable importations into Australia. Importers need to apply to the ATO for approval to defer GST payments on the imported goods.

To participate in the GST deferral scheme, you must meet the following eligibility criteria:

10. You must have an ABN

11. You must be registered for GST in Australia

12. You must lodge your business activity statements online

13. You must lodge your business activity statements monthly

14. You must be up to date with your tax return lodgment and tax payments

15. You must make payments to the ATO electronically, and

In the last three years, you or any persons relevant to the application must not have been convicted or penalised by a court for offences in relation to:

a. taxation requirements

b. customs requirements

c. the misdescription of goods

d. trade practices

e. fair trading, or

f. defrauding the Australian Government.

As you are not registered or required to be registered for GST, you are not eligible to participate in the GST deferral scheme and therefore cannot defer the payment of GST when the wine is imported.

For more information on the GST deferral scheme,

· phone 13 28 66

· visit our website at ato.gov.au, or

· write to us at:

Australian Taxation Office
PO Box 3524
ALBURY NSW 2640

Question 3

As mentioned previously, you are not entitled to defer WET or GST on the imported wine.

As there has been a local entry of wine under AD10 and no exemption applies, WET and GST are payable to the Australian Customs and Border Protection Service at the time the wine is imported.

WET payable

WET is calculated on the taxable value of the wine and is imposed at the time the dealing occurs. The amount of WET is worked out by multiplying the taxable value determined on the dealing by 29%.

An assessable dealing with wine which is a local entry has a taxable value equal to the GST importation value of the wine.

The GST importation value is the customs value plus the costs of transporting the wine to Australia, insurance and any other customs duty payable in respect of the imported wine.

GST payable

GST is payable based on the Value of the Taxable Importation (VoTI). The VoTI is the sum of:

· The Customs value. This is the amount you paid for your goods, converted to Australian currency

· Transport and insurance costs

· Any duty payable, plus

· WET.

For more information on any importation matter, contact the Customs Information and Support Centre on +61 2 9313 3010 or email information@customs.gov.au