The ATO are considering offering a safe harbour for remission of excise duty for small breweries.
Breweries are required to apply for a remission of excise duty which is payable on beer which has deteriorated or been damaged, or become unfit for human consumption. Examples of this include where batches of beer do not meet product specification due to yeast infection or some other processing issue, packaged beer has been damaged and beer is no longer suitable for sale. In these situations, the brewery is required to apply for a remission of excise duty and an approval given by the ATO prior to any disposal of beer taking place.
The ATO is proposing a safe harbour for remissions for small breweries. This would allow breweries who hold an excise licence to manufacture beer to ‘self-approve’ destruction of goods that meet the following criteria:
a. Goods have remained subject to ATO control, have not been duty paid, and are damaged or unfit for consumption.
b. Goods are Beer classified to Item 1 of The Schedule to the Excise Tariff Act 1921 (Tariff Act).
c. The quantity is no more than 100 litres of alcohol (lals) per quarter (this is equivalent to 2,000 litres of beer at 5%abv).
Breweries would not be required to report these destructions (and resulting remissions of duty) to the ATO each quarter but would be required to record details in their normal business systems, on the understanding that details must be provided to the ATO at any time upon request. Remissions of greater than 100 lals would still need to be applied for.
The ATO is seeking member feedback on this proposal as soon as possible via email:
Relationship Manager, Excise Product Leadership, Indirect Tax
p: 08 8218 9212