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Edited version of your private ruling
Authorisation Number: 1012504998987
Ruling
Subject: Country A producer rebate entitlement
Question 1
Are you entitled to the producer rebate under subsection 19-5(2) of A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) if you have the required supporting evidence to accompany your claim?
Answer
Yes, as long as you submit the required supporting evidence to accompany your claim.
This ruling applies for the following periods:
2011-12 income year
2012-13 income year
The scheme commences on:
1 July 2011
Relevant facts and circumstances
1. You are a company incorporated and based in Country A.
2. You are not registered for goods and services tax in Australia.
3. You state that you acquire grapes and process these into wine (the wine) in Country A.
4. You state that you own the grapes and inputs used to manufacture the wine.
5. You state that the wine meets the definition of grape wine in section 31-2 of the WET Act.
6. You state that you sell the wine to an Australian entity and export the wine to Australia.
7. You state that the wine is sold in a final and completed state and is not subject to further processing or manufacture in Australia.
8. You state that wine equalisation tax (WET) will be deferred by the Australian entity when the wine is imported and will be paid when the Australian entity has a taxable dealing with the wine during the financial year.
9. The wine will not be exported from Australia by the Australian entity.
10. The producer rebate has not previously been paid for the wine.
11. You are approved as a Country A participant under section 19-7 of the WET Act.
Relevant legislative provisions
A New Tax System (Wine Equalisation Tax) Act 1999 section 17-10
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 17-10(2A)
A New Tax System (Wine Equalisation Tax) Act 1999 Division 19
A New Tax System (Wine Equalisation Tax) Act 1999 section 19-5
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 19-5(2)
A New Tax System (Wine Equalisation Tax) Act 1999 paragraph 19-5(2)(a)
A New Tax System (Wine Equalisation Tax) Act 1999 paragraph 19-5(2)(b)
A New Tax System (Wine Equalisation Tax) Act 1999 paragraph 19-5(2)(c)
A New Tax System (Wine Equalisation Tax) Act 1999 section 19-7
A New Tax System (Wine Equalisation Tax) Act 1999 section 19-10
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 19-10(3)
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 19-10(4)
A New Tax System (Wine Equalisation Tax) Act 1999 section 19-15
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 19-15(2)
A New Tax System (Wine Equalisation Tax) Act 1999 subsection 19-15(3)
A New Tax System (Wine Equalisation Tax) Act 1999 section 31-2
A New Tax System (Wine Equalisation Tax) Act 1999 section 33-1
Reasons for decision
Division 19 of the WET Act sets out the circumstances under which wine producers are entitled to a rebate for certain dealings with wine. The rebate is provided in the form of a WET credit.
Subsection 19-5(2) of the WET Act provides that you are eligible for a producer rebate for rebatable wine for a financial year if:
…
(a) you are approved as a *Country A participant; and
(b) the wine was *produced by you in *Country A and exported to *Australia; and
(c) you, or another entity, paid wine tax for a *taxable dealing in the wine during the financial year.
* denotes a defined term in the WET Act
There are however exemptions to this entitlement. Subsections 19-10(3) and 19-10(4) of the WET Act state that you are not entitled to a producer rebate for a dealing in wine produced in Country A if:
(a) the wine is subsequently exported from Australia and at the time of a claim for producer rebate in respect of that wine you were, or should have reasonably been, aware that the wine had been, or would be, exported; or
(b) a producer rebate has previously been paid on the wine.
As outlined above, you are only entitled to the producer rebate for rebatable wine. Rebatable wine is defined in section 33-1 of the WET Act as meaning grape wine, grape wine product, fruit or vegetable wine, cider or perry, mead or sake. You state that the wine meets the definition of grape wine in section 31-2 of the WET Act.
You have been approved as a Country A participant under section 19-7 of the WET Act. You state that you acquire grapes and process these in Country A to make the wine. The wine is then sold to an Australian entity and exported to Australia.
You state that WET will be deferred upon importation of the wine and paid when the Australian entity has a taxable dealing with the wine during the financial year. Furthermore, the wine will not be exported from Australia by the Australian entity and the producer rebate has not previously been paid for the wine.
Therefore, on the basis that you are an approved Country A participant, have produced the wine in Country A, have exported the wine to Australia, WET will be paid during the financial year and exemptions do not apply, you are entitled to the producer rebate for the wine under subsection 19-5(2) of the WET Act, subject to you meeting the supporting documentation requirements.
Supporting documentation
Subsection 17-10(2A) of the WET Act states that a producer rebate claim by a Country A entity must be made in the approved form and accompanied by such supporting evidence as the Commissioner requires.
Paragraphs 105 to 108 of Wine Equalisation Tax Ruling WETR 2006/1 Wine equalisation tax: the operation of the producer rebate for producers of wine in Country A, detail the documents required by the Commissioner in support of a claim for the producer rebate by an approved Country A participant. Paragraph 105 of WETR 2006/1 states:
105. If a Country A participant has sold wine to an Australian importer, the supporting documentation must include:
· the Country A sales invoice of the participant; and
· Country A customs export entries as evidence of the export of the wine from Country A; and
· Australian customs import entry numbers as evidence of the importation of the wine to Australia; and either;
o Australian tax invoices (to substantiate that wine tax has been charged or included in a taxable dealing with wine that is not a customs entry); or
o wholesalers' statements; or
o if the wine is taxed at the customs barrier, Australian customs import entry numbers (to substantiate a local entry); and
· a worksheet showing how the rebate claim has been calculated.
Original documents are required to be submitted with the claim, unless it is not possible to obtain the originals. These documents are returned after the claim has been processed.
In applying the above, you are entitled to the producer rebate under subsection 19-5(2) of the WET Act, providing you submit the required supporting evidence to accompany your claim.
The amount of producer rebate you are entitled to for a financial year is an amount equal to 29% of the approved selling price of the wine.
Subsection 19-15(2) of the WET Act provides that the maximum amount of producer rebate a producer is entitled to for a financial year is $500,000. Subsection 19-15(3) of the WET Act however states that if the producer is an associated producer, the maximum amount of producer rebate to which those producers are entitled to for a financial year as a group is $500,000.