Commonwealth: A New Tax System (Wine Equalisation Tax) Act 1999 (Cth)

A New Tax System (Wine Equalisation Tax) Act 1999 No. 62, 1999 Compilation No. 31 Compilation date: 1 October 2017 Includes amendments up to: Act No. 94, 2017 Registered: 5 October 2017 About this compilation This compilation This is a compilation of the A New Tax System (Wine Equalisation Tax) Act 1999 that shows the text of the law as amended and in force on 1 October 2017 (the compilation date). The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Editorial changes For more information about any editorial changes made in this compilation, see the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law. Self‑repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Part 1—Introduction Division 1—Preliminary 1‑1.................................Short title 1‑2.............................Commencement 1‑3How the wine tax law applies to things outside the indirect tax zone and things happening before commencement 1‑4........States and Territories are bound by the wine tax law Division 2—Overview of the wine tax legislation 2‑1..........................What this Act is about 2‑5...........................Liability to tax (Part 2) 2‑10..............................Quoting (Part 3) 2‑15.........................Wine tax credits (Part 4) 2‑20.......................Payment of wine tax (Part 5) 2‑25..........................Miscellaneous (Part 6) 2‑30....................Interpretative provisions (Part 7) 2‑33....Administration, collection and recovery provisions in the Taxation Administration Act 1953 Division 3—Defined terms 3‑1...................When defined terms are identified 3‑5.............................When terms are not identified 3‑10.............Identifying the defined term in a definition Division 4—Status of Guides and other non‑operative material 4‑1....................................Non‑operative material 4‑5...........................Explanatory sections 4‑10..............................Other material Part 2—Wine tax Division 5—General rules for taxability 5‑1.......................What this Division is about 5‑5.............General rules for taxing assessable dealings 5‑10Sale time brought forward if purchaser uses the wine before title passes 5‑15..................................Royalty‑inclusive sale (AD2c and AD12c) or AOU (AD3d and AD13d) 5‑20............Indirect marketing sale (AD2d and AD12d) 5‑25.Untaxed sale (AD2e and AD12e) or AOU (AD3a and AD13a) 5‑30................Local entry of imported wine (AD10) 5‑50Purchaser quoting on purchase from producer—failure to deal according to quote Division 7—Exemptions 7‑1.......................What this Division is about 7‑5.................Exemption for dealings that are GST‑free supplies or non‑taxable importations 7‑10.....................Exemptions based on quoting 7‑15....................Exemptions based on Schedule 4 to the Customs Tariff Act 1995 7‑20.Exemption for local entry if wine has been taxed while in bond 7‑25 Goods returned to the indirect tax zone in an unaltered condition Division 9—Taxable value 9‑1.......................What this Division is about Subdivision 9‑A—General rules for working out taxable value 9‑5......How to work out the taxable value of a taxable dealing 9‑10Agreement with Commissioner regarding calculation of taxable value Subdivision 9‑B—Notional wholesale selling price 9‑25The 2 methods of working out notional wholesale selling prices for retail dealings with grape wine 9‑30Working out notional wholesale selling prices for retail dealings with wine that is not grape wine 9‑35......................The half retail price method 9‑40................The average wholesale price method 9‑45.......Notional wholesale selling prices for other dealings Subdivision 9‑C—Additions to taxable value 9‑65..Taxable dealing with wine that is the contents of a container 9‑70Assessable dealings with wine that involve the payment of an associated royalty 9‑75................Assessable dealing with wine in bond 9‑80Amounts not to be added if they are already included in the taxable value Part 3—Quoting Division 13—Quoting for dealings in wine 13‑1......................What this Division is about 13‑5.................Standard grounds for quoting ABN 13‑10......Additional quoting grounds in special circumstances 13‑15............................Periodic quoting 13‑20...............Manner in which quote must be made 13‑25...Incorrect quote nevertheless effective for certain purposes 13‑30Quote not effective for certain purposes if there are grounds for believing it was improperly made 13‑32Quote not effective if entity to whom quote is made purchased the wine for a price that included wine tax 13‑35...................Improper quoting is an offence Part 4—Wine tax credits Division 17—Wine tax credits 17‑1......................What this Division is about 17‑5.....................Wine tax credit entitlements 17‑10.....................Claims for wine tax credits 17‑15Commissioner not required to consider credit claims for less than $200 17‑20Wine tax credits to be applied against tax liabilities and excess refunded 17‑25..............Excess wine tax credits must be repaid 17‑30Clawback of CR15 wine tax credit on later recovery of bad debt 17‑35Clawback of CR8 wine tax credit on later sale of defective wine 17‑40...Agreement with Commissioner regarding wine tax credits 17‑45.........Notifying disallowance of wine tax credit claim Division 19—Producer rebates 19‑1......................What this Division is about 19‑5...................Entitlement to producer rebates 19‑7................Approval as New Zealand participant 19‑8.......Revoking an approval as a New Zealand participant 19‑9...............Notification of changed circumstances 19‑15.....................Amount of producer rebates 19‑20.........................Associated producers 19‑25.............................Excess claims Part 5—Payments and refunds of wine tax Division 21—Inclusion of wine tax and wine tax credits in net amounts 21‑1......................What this Division is about Subdivision 21‑A—General 21‑5..........Net amounts increased by amounts of wine tax 21‑10....................Attribution rules for wine tax 21‑15......Net amounts reduced by amounts of wine tax credits Subdivision 21‑B—Members of GST groups 21‑40......................Who is liable for wine tax 21‑45.................Who is entitled to wine tax credits Subdivision 21‑C—Participants in GST joint ventures 21‑70......................Who is liable for wine tax 21‑75.................Who is entitled to wine tax credits 21‑80.....Additional net amounts relating to GST joint ventures Division 23—Wine tax on customs dealings 23‑1......................What this Division is about 23‑5.............Payment of wine tax on customs dealings 23‑10.......................Application of Division 165 of the GST Act Division 25—Tourist refund scheme 25‑1......................What this Division is about 25‑5.........................Tourist refund scheme 25‑10..................Purchases later found to be GST‑free supplies Part 6—Miscellaneous Division 27—Miscellaneous 27‑5....Wine tax must be specified on invoice for wholesale sales 27‑10Alteration of wine tax liability or wine tax credit if affected by non‑arm's length transaction 27‑15.................Apportionment of global amounts 27‑20..........Commonwealth etc. not liable to pay wine tax 27‑25............Cancellation of exemptions from wine tax 27‑30..........................Application of the Criminal Code 27‑35..............................Regulations Part 7—Interpreting this Act Division 29—Rules for interpreting this Act 29‑1......................What forms part of this Act 29‑5.................What does not form part of this Act 29‑10..Explanatory sections, and their role in interpreting this Act Division 31—Meaning of some important concepts Subdivision 31‑A—Wine 31‑1...............................Meaning of wine 31‑2...............................Meaning of grape wine 31‑3...............................Meaning of grape wine product 31‑4...............................Meaning of fruit or vegetable wine 31‑5...............................Meaning of cider or perry 31‑6...............................Meaning of mead 31‑7...............................Meaning of sake 31‑8...................Requirements for types of wine 31‑9.....................Measuring alcoholic content Subdivision 31‑C—Borne wine tax and wine tax borne 31‑10..............................Meanings of borne wine tax and wine tax borne Subdivision 31‑D—Obtaining wine under quote etc. 31‑15..............................Meaning of obtain wine under quote etc. Division 33—Dictionary 33‑1................................Dictionary Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history An Act about a tax, relating to certain alcoholic beverages, to implement A New Tax System, and for related purposes Part 1—Introduction Division 1—Preliminary 1‑1 Short title This Act may be cited as the A New Tax System (Wine Equalisation Tax) Act 1999. 1‑2 Commencement This Act commences on 1 July 2000. 1‑3 How the wine tax law applies to things outside the indirect tax zone and things happening before commencement (1) The *wine tax law extends to acts, omissions, matters and things outside Australia (within the meaning of the *ITAA 1997) (except where a contrary intention appears). (2) The *wine tax law applies to acts and omissions happening before or after the commencement of this Act (except where there is an express statement to the contrary). 1‑4 States and Territories are bound by the wine tax law The *wine tax law binds the Crown in right of each of the States, of the Australian Capital Territory and of the Northern Territory. However, it does not make the Crown liable to be prosecuted for an offence. Division 2—Overview of the wine tax legislation 2‑1 What this Act is about This Act is about the wine equalisation tax (or wine tax). The wine tax is a single stage tax applying (in most cases) to dealings in wine at the wholesale level. In almost all dealings to which it applies, the GST will also apply. Note 1: Wine is widely defined in Subdivision 31‑A. It can apply to beverages fermented from any fruit or vegetable. It also extends to cider, perry, mead and sake. Note 2: The wine tax is imposed by 3 Acts: (a) the A New Tax System (Wine Equalisation Tax Imposition—General) Act 1999; and (b) the A New Tax System (Wine Equalisation Tax Imposition—Customs) Act 1999; and (c) the A New Tax System (Wine Equalisation Tax Imposition—Excise) Act 1999. 2‑5 Liability to tax (Part 2) Part 2 sets out the rules that establish the liability for the wine tax. The broad aim of the wine tax law is to tax the last wholesale sale of wine (usually the sale from the last wholesaler to the retailer). 2‑10 Quoting (Part 3) Part 3 is about quoting. The system of quoting is designed to avoid wine tax becoming payable on earlier sales. 2‑15 Wine tax credits (Part 4) Part 4 is about the entitlement to, and claiming of, wine tax credits. The system of wine tax credits deals (among other things) with situations where wine tax has become payable more than once on the same wine. 2‑20 Payment of wine tax (Part 5) Part 5 provides for amounts of wine tax, and wine tax credits, to be included in net amounts under the GST system. This has the effect of incorporating the wine tax into the payments and refunds system for the GST. However, the assessed wine tax is paid together with customs duty (where appropriate). 2‑25 Miscellaneous (Part 6) Part 6 deals with miscellaneous matters. 2‑30 Interpretative provisions (Part 7) Part 7 contains the Dictionary, which sets out a list of all the terms that are defined in this Act. It also sets out the meanings of some important concepts and rules on how to interpret this Act. 2‑33 Administration, collection and recovery provisions in the Taxation Administration Act 1953 Parts 3‑10, 4‑1 and 4‑15 in Schedule 1 to the Taxation Administration Act 1953 contain provisions relating to the administration of the wine tax, and to collection and recovery of amounts of wine tax. Division 3—Defined terms 3‑1 When defined terms are identified (1) Many of the terms used in the law relating to the wine tax are defined. (2) Most defined terms in this Act are identified by an asterisk appearing at the start of the term: as in "*taxable dealing". The footnote that goes with the asterisk contains a signpost to the Dictionary definitions starting at section 33‑1. 3‑5 When terms are not identified (1) Once a defined term has been identified by an asterisk, later occurrences of the term in the same subsection are not usually asterisked. (2) Terms are not asterisked in the non‑operative material contained in this Act. Note: The non‑operative material is described in Division 4. (3) The following basic terms used throughout the Act are not identified with an asterisk. Common definitions that are not asterisked Item This term: 1 amount 2 Commissioner 3 entity 3A indirect tax zone 5 wine 6 wine tax 7 you 3‑10 Identifying the defined term in a definition Within a definition, the defined term is identified by bold italics. Division 4—Status of Guides and other non‑operative material 4‑1 Non‑operative material In addition to the operative provisions themselves, this Act contains other material to help you identify accurately and quickly the provisions that are relevant to you and to help you understand them. This other material falls into 2 main categories. 4‑5 Explanatory sections One category is the explanatory section in many Divisions. Under the section heading "What this Division is about", a short explanation of the Division appears in boxed text. Explanatory sections form part of this Act but are not operative provisions. In interpreting an operative provision, explanatory sections may only be considered for limited purposes. They are set out in section 29‑10. 4‑10 Other material The other category consists of material such as notes and examples. These also form part of the Act. They are distinguished by type size from the operative provisions (except for formulas), but are not kept separate from them. Part 2—Wine tax Division 5—General rules for taxability 5‑1 What this Division is about Liability for wine tax centres around the concept of an assessable dealing. This concept is defined in the Assessable Dealings Table and the sections following the table. 5‑5 General rules for taxing assessable dealings (1) The *Assessable Dealings Table sets out all the *assessable dealings that can be subject to wine tax. (2) If the time of an *assessable dealing (as specified in column 4 of the table) is on or after 1 July 2000, and no exemption applies under Division 7, then: (a) the dealing is a *taxable dealing; and (b) the entity specified in column 3 is the entity liable to the tax; and (c) the tax becomes payable at the time of the dealing, as specified in column 4. However, an assessable dealing (other than a *customs dealing) is a taxable dealing only if the entity specified in column 3 is *registered or *required to be registered. Note: Under Part 5, amounts of wine tax, on assessable dealings (other than customs dealings), are included in your net amount under the GST system. (3) To calculate the amount of the tax: (a) determine the *taxable value of the dealing under Division 9; and (b) multiply the result by 29%. Note: The amount of tax is reduced for some importations (e.g. accompanied baggage of passengers) that are free of customs duty (see section 5‑40). (4) The table does not apply to a dealing with wine unless the wine is *assessable wine immediately before the time of the dealing, and is in the indirect tax zone at the time of the dealing. Assessable Dealings Table Column 1 Column 2 Column 3 Column 4 Column 5 No. *Assessable dealing *Entity liable Time of dealing Normal taxable value Part A—Australian Wine AD1a *wholesale sale by an entity that *manufactured the wine in the course of any business seller time of sale the *price (excluding wine tax and *GST) for which the wine was sold AD1b *wholesale sale by an entity that is not the *manufacturer of the wine seller time of sale the *price (excluding wine tax and *GST) for which the wine was sold AD2a *retail sale by an entity that *manufactured the wine in the course of any business seller time of sale the *notional wholesale selling price AD2b *retail sale by an entity that is not the *manufacturer of the wine, but that *obtained the wine under quote; excludes case covered by AD2d seller time of sale the *notional wholesale selling price AD2c *royalty‑inclusive sale seller time of sale the amount that would be the *notional wholesale purchase price of the wine if the *manufacturer had incurred the *eligible royalty costs AD2d *indirect marketing sale seller time of sale the *notional wholesale selling price AD2e *untaxed sale by an entity that is not the *manufacturer of the wine seller time of sale the *notional wholesale selling price AD2f *retail sale, in the course of any business, of wine that is placed in *containers at a time after wine tax became payable on the wine by a person other than the seller seller time of sale the *notional wholesale selling price AD3a *untaxed AOU by an entity that is not the *manufacturer of the wine applier time of *AOU the *notional wholesale selling price AD3b *AOU by an entity that manufactured the wine in the course of any business applier time of *AOU the *notional wholesale selling price AD3c *AOU by an entity that is not the *manufacturer of the wine, but that *obtained the wine under quote applier time of *AOU (a) the purchase *price (excluding *GST), if the wine was *purchased under quote; (b) in other cases, the *notional wholesale selling price AD3d *royalty‑inclusive AOU applier time of *AOU the amount that would be the *notional wholesale purchase price of the wine if the *manufacturer had incurred the *eligible royalty costs AD4b removal from a *customs clearance area of *airport shop goods purchased by a *relevant traveller from an *inwards duty free shop *relevant traveller time at which wine tax is payable under section the *price for which the wine was purchased by the *relevant traveller 23‑5 Assessable Dealings Table Column 1 Column 2 Column 3 Column 4 Column 5 No. *Assessable dealing *Entity liable Time of dealing Normal taxable value Part B—Imported Wine AD10 *local entry entity that makes the *local entry time at which wine tax is payable under section the *GST importation value 23‑5 AD11b *wholesale sale by any entity seller time of sale the *price (excluding wine tax and *GST) for which the wine was sold AD12b *retail sale by an entity that *obtained the wine under quote; excludes case covered by AD12d seller time of sale the *notional wholesale selling price AD12c *royalty‑inclusive sale seller time of sale the amount that would be the *notional wholesale purchase price of the wine if the entity that *imported the wine had incurred the *eligible royalty costs AD12d *indirect marketing sale seller time of sale the *notional wholesale selling price AD12e *untaxed sale seller time of sale the *notional wholesale selling price AD12f *retail sale, in the course of any business, of wine that is placed in *containers at a time after wine tax became payable on the wine by a person other than the seller seller time of sale the *notional wholesale selling price AD13a *untaxed AOU applier time of *AOU the*notional wholesale selling price AD13c *AOU by an entity that *obtained the wine under quote applier time of *AOU (a) if the wine was *purchased under quote: the purchase *price (excluding *GST); (b) if the wine was *locally entered under quote by the applier: the *GST importation value AD13d *royalty‑inclusive AOU applier time of *AOU the amount that would be the *notional wholesale purchase price of the wine if the entity that *imported the wine had incurred the *eligible royalty costs AD14b removal from a *customs clearance area of *airport shop goods purchased by a *relevant traveller from an *inwards duty free shop *relevant traveller time at which wine tax is payable under section the *price for which the wine was purchased by the *relevant traveller 23‑5 Note: The numbering of items in the table uses the following pattern: For Australian wine, the dealings are divided into 4 groups: * wholesale sales begin with AD1 * retail sales begin with AD2 * an AOU begins with AD3 * miscellaneous dealings begin with AD4. Imported wine has an additional class of local entry (AD10). The other dealings with imported wine have a number that is 10 higher than the broadly corresponding dealing with Australian wine. For example, AD12b for imported wine corresponds to AD2b for Australian wine. 5‑10 Sale time brought forward if purchaser uses the wine before title passes (1) This section applies to an *assessable dealing that consists of a sale, if the purchaser uses the wine after the time when the contract is made but before the time when title is to pass to the purchaser under the contract. (2) The time when the purchaser first so uses the wine is taken to be the time of the sale for the purposes of the *wine tax law. 5‑15 Royalty‑inclusive sale (AD2c and AD12c) or AOU (AD3d and AD13d) (1) A *retail sale, or an *AOU, of wine (the current wine) by you in the course of a business is a royalty‑inclusive sale or a royalty‑inclusive AOU respectively if the following conditions are met: (a) *eligible royalty costs have been incurred at or before the time of the sale or AOU, or could reasonably be expected to be incurred after the time of the sale or AOU, by any or all of the following: (i) you; (ii) your *associate; (iii) any entity (other than the *manufacturer) under an arrangement with you or with your associate; (b) the sale or AOU is not covered by another category of *assessable dealing in the *Assessable Dealings Table. (2) Eligible royalty cost is a *royalty that is paid or payable in connection with the current wine, except where the amount was paid or payable by any entity before 24 March 1999. 5‑20 Indirect marketing sale (AD2d and AD12d) A sale of *assessable wine is an indirect marketing sale if it is a *retail sale made by an entity (the marketer) that is not the *manufacturer of the wine and the sale is made: (a) under an arrangement that provides for the sale of the wine to be made by an entity that is acting for the marketer but is not an employee of the marketer; or (b) from premises that: (i) are used, mainly for making retail sales of wine, by an entity or entities other than the marketer; and (ii) are held out to be premises of, or premises used by, the other entity or entities. 5‑25 Untaxed sale (AD2e and AD12e) or AOU (AD3a and AD13a) (1) A *retail sale of wine by you is an untaxed sale unless: (a) you *obtained the wine under quote; or (b) the wine has previously passed through a taxing point; or (c) the sale is an *indirect marketing sale. (2) An *AOU, in the course of any business, by you is an untaxed AOU unless: (a) you *obtained the wine under quote; or (b) the wine has previously passed through a taxing point. (3) For the purposes of this section, wine is taken to have passed through a taxing point only if: (a) the wine has been the subject of a *taxable dealing; or (b) the wine has been the subject of an *assessable dealing that was exempted because you could not be taxed or were entitled to an exemption arising outside the *wine tax law; or (c) the wine has been the subject of sales tax within the meaning of the former Sales Tax Assessment Act 1992; or (d) section 5 of the former Sales Tax Amendment (Transitional) Act 1992 applies to the wine (whether or not the wine would, but for that section, have been subject to sales tax under the former Sales Tax Assessment Act 1992). Note: Section 5 ensured that goods subject to sales tax under the pre‑1992 sales tax law were not also taxable under the 1992 sales tax law. 5‑30 Local entry of imported wine (AD10) (1) The Local Entry Table sets out the situations that amount to a local entry of *imported wine for the purposes of the *wine tax law. The rest of this section deals with situations involving the withdrawal of a customs entry, or multiple local entries of the same wine. (2) The withdrawal of the customs entry underlying a formal local entry (the earlier local entry) usually has the effect that the earlier local entry is taken never to have happened. However, if: (a) there is a later formal local entry after the withdrawal; and (b) the tax on that later entry would be less than the tax on the earlier local entry; then the earlier local entry is taken never to have been extinguished and the later entry is taken never to have happened. (3) If a formal local entry happens after a deemed local entry, the formal local entry is taken never to have happened. (4) If a deemed local entry happens after a formal local entry, the formal local entry is taken never to have happened. (5) In this section: customs entry means an entry for home consumption under the Customs Act 1901. deemed local entry means a local entry that is not a formal local entry. formal local entry means a local entry covered by *LE1 or *LE2 in the Local Entry Table. Local Entry Table Column 1 Column 2 Column 3 No. Situation giving rise to local entry *Entity to be regarded as making the local entry LE1 the wine is taken to have been entered for home consumption under subsection 71A(7) of the Customs Act 1901 owner (within the meaning of the Customs Act 1901) of the wine LE2 the wine is taken to have been entered for home consumption under subsection 71A(8) of the Customs Act 1901 owner (within the meaning of the Customs Act 1901) of the wine LE3 the wine is delivered into home consumption under section 71 of the Customs Act 1901 entity authorised under section 71 of the Customs Act 1901 to deliver the wine LE4 the wine is sold under section 72, 87 or 96 of the Customs Act 1901 entity that bought the wine LE5 the wine is delivered to an entity under section 208 of the Customs Act 1901 entity to which the wine is delivered LE6 the wine is delivered to an entity under a court order made in an action under the Customs Act 1901 for condemnation or recovery of the wine entity to which the wine is delivered LE7 the wine is delivered to an entity under a court order made in an action for a declaration that the wine is not forfeited under the Customs Act 1901 entity to which the wine is delivered LE8 the wine has been seized under a warrant issued under section 203 of the Customs Act 1901, or under section 203B or 203C of that Act, and is delivered to an entity on the basis that it is not forfeited goods entity to which the wine is delivered LE9 delivery of the wine is authorised under subsection 209(6) of the Customs Act 1901 entity to which the wine is delivered or is to be delivered LE10 a demand is made under section 35A or 149 of the Customs Act 1901 in relation to the wine entity on which the demand is made LE11 the wine is treated as entered for home consumption under subsection 96A(12) of the Customs Act 1901 entity treated under section 96A of the Customs Act 1901 as having entered the wine for home consumption LE12 the wine is taken out of a warehouse under a permission granted under section 97 of the Customs Act 1901 and is not returned to the warehouse before the expiration of the period specified in the permission entity to which the permission is given LE14 the wine is taken into home consumption in accordance with a permission granted under section 77D of the Customs Act 1901 entity to which the permission is granted LE14A the wine is *tradex scheme goods, and any of the circumstances referred to in subsection 21(1) of that Act have occurred in respect of any of the wine holder (within the meaning of the Tradex Scheme Act 1999) of the *tradex order relating to the wine LE15 the wine is not covered by any other item in this table but is *imported, and is not entered for home consumption as required under the Customs Act 1901 owner (within the meaning of the Customs Act 1901) of the wine 5‑50 Purchaser quoting on purchase from producer—failure to deal according to quote (1) This section applies if: (a) you *purchased wine under quote from the *producer of the wine; and (b) in your *quote you did not state that you have the intention of dealing with the wine in one of the following ways: (i) a way described in paragraph 13‑5(1)(c) or (d); (ii) by sale to an entity that will quote for the sale; and (c) you cause an *assessable dealing with the wine that is a dealing in a way described in subparagraph (b)(i) or (ii). (2) Sections 7‑5 (Exemption for dealings that are GST‑free supplies etc.) and 7‑10 (Exemptions based on quoting) do not apply to the *assessable dealing mentioned in paragraph (1)(c). (3) For the purposes of this Division: (a) disregard paragraph (g) of the definition of application to own use in section 33‑1; and (b) treat the matter referred to in that paragraph as being an application to own use. Division 7—Exemptions 7‑1 What this Division is about In some circumstances, a dealing with wine is exempt from wine tax even if it is an assessable dealing. 7‑5 Exemption for dealings that are GST‑free supplies or non‑taxable importations An *assessable dealing is not taxable if the dealing is: (a) a *supply that is *GST‑free (other than because of Subdivision 38‑D (child care) of the *GST Act); or (b) a *local entry relating to an *importation that is a *non‑taxable importation. 7‑10 Exemptions based on quoting (1) A sale is not taxable if the purchaser *quotes for the sale at or before the time of the sale. (2) A *customs dealing is not taxable if the entity that would, apart from this subsection, be liable for the wine tax on the dealing *quotes for the dealing at or before the time of the dealing. 7‑15 Exemptions based on Schedule 4 to the Customs Tariff Act 1995 (1) A *customs dealing is not taxable if it is an *importation of wine covered by item 10, 11, 15, 18, 21, 21A, 24 or 27 in Schedule 4 to the *Customs Tariff. (2) To avoid doubt, a reference to wine that is covered by an item in Schedule 4 to the *Customs Tariff includes a reference to goods to which that item would apply apart from the operation of subsection 18(1) of the Customs Tariff Act 1995. 7‑20 Exemption for local entry if wine has been taxed while in bond A *local entry of wine is not taxable if you or anyone else became liable to tax on a previous *assessable dealing with the wine while it was in bond or under customs control under the Customs Act 1901. 7‑25 Goods returned to the indirect tax zone in an unaltered condition (1) A *local entry of wine is not taxable if: (a) the wine was exported from the indirect tax zone and is returned to the indirect tax zone, without having been subject to any treatment, industrial processing, alteration or any other process since its export; and (b) the importer was not entitled to, and did not claim, a payment under Division 25 (about the tourist refund scheme) related to the export of the wine; and (c) the importer: (i) is the manufacturer of the wine; or (ii) has previously acquired the wine, and the supply by means of which the importer acquired the wine was a *taxable dealing; or (iii) has previously imported the goods, and the previous importation was a *taxable dealing. (2) A *local entry of wine is not taxable if: (a) the importer had manufactured, acquired or imported the wine before 1 July 2000; and (b) the wine was exported from the indirect tax zone before, on or after 1 July 2000; and (c) the wine is returned to the indirect tax zone on or after 1 July 2000, without having been subject to any treatment, industrial processing, alteration or any other process since its export; and (d) the importer was not entitled to, and did not claim, a payment under Division 25 (about the tourist refund scheme) related to the export of the wine; and (e) the ownership of the wine when it is returned to the indirect tax zone is the same as its ownership on 1 July 2000. Note: An importation covered by this section may also be duty‑free under item 17 of Schedule 4 to the Customs Tariff Act 1995. Division 9—Taxable value 9‑1 What this Division is about In most cases, the taxable value of an assessable dealing is multiplied by the rate of wine tax to calculate the amount of wine tax. Subdivision 9‑A—General rules for working out taxable value 9‑5 How to work out the taxable value of a taxable dealing (1) The general rules for calculating the taxable value are set out in the *Assessable Dealings Table. (2) In some cases, the *Assessable Dealings Table refers to the *notional wholesale selling price as the *taxable value. Subdivision 9‑B sets out how to work out the notional wholesale selling price. (3) In some cases, amounts must be added to the amount set out in the *Assessable Dealings Table. These additions are set out in Subdivision 9‑C. (4) In working out the *taxable value of wine, any rebate, refund or other payment or credit made by a State or Territory in respect of the wine is to be disregarded. 9‑10 Agreement with Commissioner regarding calculation of taxable value (1) The Commissioner may enter into an agreement with you about calculating the *taxable values of particular *taxable dealings for which you are liable for the wine tax. (2) So far as the agreement is inconsistent with this Act, the agreement prevails. Subdivision 9‑B—Notional wholesale selling price 9‑25 The 2 methods of working out notional wholesale selling prices for retail dealings with grape wine (1) There are 2 methods for working out the notional wholesale selling price for a *taxable dealing that is either: (a) a *retail sale of *grape wine; or (b) an *AOU connected with retail sales of wine that is grape wine. (2) The *half retail price method is used unless you have chosen under subsection (3) to use the *average wholesale price method. (3) You may choose to use the *average wholesale price method if, during the *tax period in respect of which you are liable to pay wine tax on the dealing, at least 10% by value of all your sales of *grape wine that: (a) is of the same vintage as the grape wine to which the dealing relates; and (b) is produced from the same grape varieties, or the same blend of grape varieties, as the grape wine to which the dealing relates; are *wholesale sales. 9‑30 Working out notional wholesale selling prices for retail dealings with wine that is not grape wine The notional wholesale selling price for a *taxable dealing that is either: (a) a *retail sale of wine that is not *grape wine; or (b) an *AOU connected with retail sales of wine that is not grape wine; is worked out using the *half retail price method. 9‑35 The half retail price method (1) The notional wholesale selling price for a *retail sale of *grape wine, worked out using the half retail price method, is 50% of the *price of the sale. (2) The notional wholesale selling price for an *AOU connected with retail sales of grape wine, worked out using the half retail price method, is 50% of the *price for which you would normally have sold the wine if the sale were a *retail sale. 9‑40 The average wholesale price method The notional wholesale selling price for a *retail sale of *grape wine, or for an *AOU connected with retail sales of grape wine, worked out using the average wholesale price method is the weighted average of the *prices (excluding wine tax and *GST) for *wholesale sales that you have made of grape wine that: (a) is of the same vintage as the grape wine to which the retail sale or AOU relates; and (b) is produced from the same grape varieties, or the same blend of grape varieties, as the grape wine to which the retail sale or AOU relates; during the *tax period in respect of which you are liable to pay wine tax on the retail sale or AOU. Example: If, during a tax period, you make 70% of wholesale sales of grape wine of a particular vintage and variety at $80 per dozen, and the remaining 30% at $90 per dozen, the weighted average of the wholesale prices for wholesale sales during the tax period is: 9‑45 Notional wholesale selling prices for other dealings The notional wholesale selling price for a taxable dealing with wine that is neither: (a) a *retail sale of wine; nor (b) an *AOU connected with retail sales of wine; is the *price (excluding wine tax and *GST) for which you could reasonably have been expected to sell the wine by wholesale under an arm's length transaction. Subdivision 9‑C—Additions to taxable value 9‑65 Taxable dealing with wine that is the contents of a container (1) This section deals with situations in which a *container is associated with wine (the contents) that is the subject of a *taxable dealing. The aim of this section is to ensure that the *taxable value will include a component for the container, even though the parties may have allocated a separate amount to the container. (2) If: (a) the *taxable value of the dealing is calculated by reference to the *price (excluding wine tax and *GST) for which the contents were sold; and (b) the parties have allocated a separate amount to the *container; then the taxable value is *increased by so much of the value of the container as is recouped by the seller in connection with the sale of the contents. (3) If the *taxable value of the dealing is not calculated as mentioned in subsection (2), then the taxable value is *increased by so much of the value of the *container as could reasonably be expected to have been recouped by you in connection with a hypothetical sale of the contents at the time of the actual *taxable dealing with the contents. 9‑70 Assessable dealings with wine that involve the payment of an associated royalty (1) If a *royalty is paid or payable, or likely to be paid or payable, in connection with any of the following events in respect of particular wine: (a) the *manufacture of the wine; (b) the *importation or *local entry of the wine; (c) a sale of the wine; then the *taxable value of any *taxable dealing with that wine that happens at or after that event includes the amount or value of the royalty. (2) Royalty is any amount to the extent to which it is paid or payable (whether or not periodically) as consideration for any of the following things (or for the right to do them): (a) doing anything that would be an infringement of copyright if it were done without the licence of the copyright owner; (b) making, using, exercising or vending an invention (each of those terms having the meaning it has in the Patents Act 1990); (c) using a design that is of a kind capable of being registered under the Designs Act 2003 (whether or not it is registered under that Act or under any other law); (d) using a trade mark that is of a kind capable of being registered under the Trade Marks Act 1995 (whether or not it is registered under that Act or under any other law), but not including a mark that relates to a service; (e) using confidential information; (f) using machinery, implements, apparatus or other equipment; (g) *supplying scientific, technical, industrial, commercial or other knowledge or information; (h) supplying assistance that is ancillary to, and is supplied as a means of enabling the application or enjoyment of, any matter covered by paragraphs (a) to (g); (i) a total or partial forbearance in respect of any matter covered by paragraphs (a) to (h). Terms used in paragraph (a) of this definition have the same meaning as in the Copyright Act 1968. 9‑75 Assessable dealing with wine in bond If a *taxable dealing happens while the wine is in bond or otherwise subject to customs control under the Customs Act 1901, the *taxable value is *increased by the amount of *customs duty to which the wine would have been subject if it had been entered for home consumption under the Customs Act 1901 at the time of the taxable dealing. 9‑80 Amounts not to be added if they are already included in the taxable value This Subdivision does not add any amount to the *taxable value so far as it would already be included in the taxable value. Part 3—Quoting Division 13—Quoting for dealings in wine 13‑1 What this Division is about In certain circumstances you can quote for a dealing with wine. This is designed to avoid the wine tax becoming payable on sales preceding the last wholesale sale. (Under section 7‑10, wine tax is not payable on a sale for which the purchaser has quoted.) 13‑5 Standard grounds for quoting ABN (1) You are entitled to *quote your *ABN for a dealing with wine if, at the time of quoting, you have the intention of dealing with the wine in any of the following ways: (a) selling the wine by *wholesale, or by *indirect marketing sale, while the wine is in the indirect tax zone; (b) selling the wine, by any kind of sale, while it is in the indirect tax zone (this ground is available only if you are mainly a wholesaler at the time of quoting); (c) using the wine as a material in *manufacture or other treatment or processing, whether or not it relates to or results in other wine; (d) making a *supply of the wine that will be *GST‑free. (2) However, you are not entitled to *quote unless you are *registered. (3) For the purposes of paragraph (1)(b), you are mainly a wholesaler at the quoting time only if: (a) *wholesale sales and *indirect marketing sales account for more than half of the total value of all sales of *assessable wine by you during the 12 months ending at the quoting time; or (b) you have an expectation (based on reasonable grounds) that wholesale sales and indirect marketing sales will account for more than half of the total value of all sales of assessable wine by you during the 12 months starting at the quoting time. For this purpose, the value of a sale of wine is the *price for which the wine is sold. 13‑10 Additional quoting grounds in special circumstances The Commissioner may (if you are *registered) authorise you to *quote your *ABN in special circumstances in which you would not otherwise be entitled to quote. 13‑15 Periodic quoting (1) You may make a periodic *quote under this section for purchases that you propose to make from an entity (the supplier) during the period, not exceeding 12 months, covered by the periodic quote. (2) If you make such a periodic *quote on or before the first day of the period to which the quote relates, you are treated as having quoted your *ABN for all purchases during the period from the *supplier, other than purchases in respect of which you have notified the supplier in accordance with subsection (3). (3) If you are not entitled to *quote for a particular purchase from the *supplier during the period, you must notify the supplier of that fact at or before the time of the purchase. The notification must be in the *approved form. (4) You commit an offence if you contravene subsection (3). Penalty: 20 penalty units. Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Note 2: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit. (5) Section 13‑30 applies to a *quote that you are treated as having made under subsection (2) of this section for a particular purchase. 13‑20 Manner in which quote must be made (1) A *quote (including a periodic quote) must be made in the *approved form. (2) A *quote for a dealing is not effective unless it is made at or before the time of the dealing. 13‑25 Incorrect quote nevertheless effective for certain purposes If you *quote in circumstances in which you are not entitled to quote, or the quote is not in the *approved form, the quote is nevertheless: (a) effective for the purposes of Subdivision 31‑D; and (b) effective for the purpose of section 7‑10, unless section 13‑30 applies. 13‑30 Quote not effective for certain purposes if there are grounds for believing it was improperly made A *quote is not effective, so far as it would have resulted in an exemption, if at the time of the quote the entity to which the quote is made has reasonable grounds for believing that: (a) you are not entitled to quote in the particular circumstances; or (b) the quote is not made in the *approved form; or (c) the quote is false or misleading in a material particular (either because of something stated in the quote or something left out). 13‑32 Quote not effective if entity to whom quote is made purchased the wine for a price that included wine tax A *quote is not effective for the purposes of applying subsection 7‑10(1) to a particular sale if the entity to which the quote is made purchased the wine for a *price that included wine tax. 13‑35 Improper quoting is an offence You must not, in relation to any dealing with wine: (a) quote an *ABN for the purposes of this Act: (i) in circumstances in which you are not entitled to quote; or (ii) in contravention of subsection 13‑20(1); or (b) in any other way falsely quote an ABN. Penalty: 20 penalty units. Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Note 2: See section 4AA of the Crimes Act 1914 for the current value of a penalty unit. Note 3: Section 23 of the A New Tax System (Australian Business Number) Act 1999 provides penalties for misuse of ABNs. Part 4—Wine tax credits Division 17—Wine tax credits 17‑1 What this Division is about Wine tax credits can arise in a number of circumstances. Generally speaking, they prevent wine tax applying more than once to the same goods. Note: If you are in the GST system, wine tax credits are included in your net amounts (see Part 5). If you are not in the GST system, you can claim wine tax credits under this Part. Producer rebates under Division 19 are a form of wine tax credit. 17‑5 Wine tax credit entitlements (1) The *Wine Tax Credit Table sets out the situations in which you are entitled to a *wine tax credit. (2) You are not entitled to a *wine tax credit for an amount of tax for which a wine tax credit entitlement has previously arisen (whether for you or another entity). (3) You are not entitled to a *wine tax credit unless you make a claim for the wine tax credit under section 17‑10. Wine Tax Credit Table No. Summary of ground Details of ground Amount of *wine tax credit Time *wine tax credit arises CR1 Tax overpaid You have paid an amount as wine tax that was not legally payable. the amount overpaid, to the extent that you have not *passed it on when the amount became overpaid CR4 Avoiding double tax on the same wine You have become liable to wine tax on an *assessable dealing (the current dealing) in relation to wine, but have *borne wine tax on all of the wine before the time of the current dealing. the wine tax previously *borne on the wine time of the current dealing CR7 Ensuring no double tax in respect of *containers You are liable to the wine tax on an *assessable dealing with wine that is the contents of a *container. You have *borne wine tax on the container. the *wine tax borne on the *container time of the *assessable dealing CR8 Replacement of defective wine You have *borne wine tax on *assessable wine used for the purpose of replacing other wine because of defects in the other wine. *wine tax borne on replacement wine time of replacement CR9 *Producer rebate An *assessable dealing is made in circumstances that entitle you to a producer rebate under Division 19. the amount of the producer rebate under Division 19 immediately before the end of the financial year in which the assessable dealing occurs CR14 Drawback of *customs duty on *imported wine You have become liable to wine tax on a *local entry of wine for which drawback of *customs duty has been allowed under section 168 of the Customs Act 1901 (or, in the Commissioner's opinion, would have been allowed if wine had been liable to duty). wine tax payable on the *local entry time when drawback was allowed (or would have been allowed) CR15 Sale *price written off as bad debt You have: a proportion of the wine tax paid that is equal to the proportion of the debt written off time of writing off (a) paid wine tax on an *assessable dealing that is a sale and later written off some or all of the *price for which the wine was sold; or (b) paid wine tax on an assessable dealing that is a *local entry (other than an *LE4) and later written off some or all of the price for which the wine was first sold by you after the local entry. 17‑10 Claims for wine tax credits (1) If you are *registered or *required to be registered, you may make a claim for a *wine tax credit (other than a claim for a *producer rebate under subsection 19‑5(2)) by including the amount of the wine tax credit in the *reduction of your *net amount for the*tax period in question under section 21‑15. (2) If you are not *registered or *required to be registered, you may make a claim for a *wine tax credit (other than a claim for a *producer rebate under subsection 19‑5(2)) in the *approved form. The claim must be accompanied by such supporting evidence as the Commissioner requires. (2A) If you are a *New Zealand participant, you may make a claim for a *wine tax credit under subsection 19‑5(2) in the *approved form. The claim must be accompanied by such supporting evidence as the Commissioner requires. (2B) The Commissioner may determine, by legislative instrument, the time or times during which claims for *wine tax credits under subsection 19‑5(2) may be made. (3) A claim under subsection (2) or (2A) must be lodged with the Commissioner within 4 years after the time when the *wine tax credit arises. 17‑15 Commissioner not required to consider credit claims for less than $200 The Commissioner is not required to consider a claim under subsection 17‑10(2) or (2A) for a *wine tax credit if the total amount claimed is less than $200. 17‑20 Wine tax credits to be applied against tax liabilities and excess refunded If you have claimed under subsection 17‑10(2) or (2A) a *wine tax credit to which you are entitled, the Commissioner must apply the wine tax credit under Division 3 of Part IIB of the Taxation Administration Act 1953. 17‑25 Excess wine tax credits must be repaid If the amount applied by the Commissioner in accordance with section 17‑20 is more than the amount of the *wine tax credit to which you are properly entitled, the excess is to be treated as if it were wine tax that became payable, and due for payment, by you at the time when it was applied. Note: The main effect of treating the amount as if it were tax is to apply the collection and recovery rules in Part 3‑10 in Schedule 1 to the Taxation Administration Act 1953. 17‑30 Clawback of CR15 wine tax credit on later recovery of bad debt (1) A *wine tax credit under *CR15 in relation to an amount written off by you as a bad debt is subject to the condition that you are liable to pay an amount under this section if you later recover some or all of the amount written off. (2) The amount payable by you is calculated using the following formula: (3) The amount is to be treated as if it were wine tax that became payable by you at the time of recovery of the bad debt, and, for the purposes of Part 5, were attributable to the *tax period in which the recovery happened. Note: The main effect of treating the amount as if it were wine tax is to apply the collection and recovery rules in Part 3‑10 in Schedule 1 to the Taxation Administration Act 1953. 17‑35 Clawback of CR8 wine tax credit on later sale of defective wine (1) A *wine tax credit under *CR8 for wine tax on wine that was used to replace defective wine is subject to the condition that you are liable to pay an amount under this section if you later sell the defective wine. (2) The amount payable by you is calculated using the following formula: (3) The amount is to be treated as if it were wine tax that became payable by you at the time of the later sale of the defective wine, and, for the purposes of Part 5, were attributable to the *tax period in which the later sale happened. Note: The main effect of treating the amount as if it were wine tax is to apply the collection and recovery rules in Part 3‑10 in Schedule 1 to the Taxation Administration Act 1953. 17‑40 Agreement with Commissioner regarding wine tax credits (1) The Commissioner may enter into an agreement with you regarding the manner of calculating and claiming *wine tax credits to which you are entitled. (2) So far as the agreement is inconsistent with this Act, the agreement prevails. 17‑45 Notifying disallowance of wine tax credit claim If the Commissioner decides to disallow the whole or a part of a claim for a *wine tax credit,