A New Tax System (Wine Equalisation Tax) Regulations 2019

The Regulations directly affect three groups. Travellers purchasing wine in Australia for export - tourists, Australian residents leaving the country, and residents of external Territories (Norfolk Island, Christmas Island, Cocos (Keeling) Islands, etc.) who send wine home. They must satisfy the purchase requirements (which incorporate GST Regulations), depart within a specified period (not detailed here but cross-referenced), export the wine as accompanied baggage, and lodge a claim (by presenting a tax invoice to a Customs officer or lodging a claim with the Comptroller-General of Customs). The refund amount is modest (14.5% of purchase price), so only those with relatively high-value purchases will find it worthwhile. The rounding rule affects small refunds disproportionately. The external Territory provision is particularly narrow - it applies where the person sends the wine home rather than takes it as accompanied baggage, but the payment mechanism is tied to the GST refund scheme, which itself has specific rules (not reproduced here).

Wine producers and blenders who classify their products under the Act are affected by the compositional requirements. Any beverage classed as “wine” attracts wine tax (currently 29% of wholesale value) but may also be eligible for rebates and concessions. Producers of products near the boundaries - for example, grape wine products with added flavours, fruit wines with added spirits, mead with fruit additions - must ensure compliance with the Regulations or risk having their product classified as not-wine, potentially triggering higher excise duty or GST consequences. The 22% ABV cap for grape wine and the minimum 15% ABV for fortified fruit/vegetable wine are bright lines. Mead producers have the most detailed constraints: five sub-conditions for using fruit, plus the caramel and spice permissions. The requirement to reconstitute concentrated fruit juice per manufacturer’s recommendations for volume calculations imposes a record-keeping burden.

Customs officers and the Comptroller-General of Customs have operational duties under the TRS. Officers must verify entitlements and issue payment authorities; the Comptroller-General must process claims within 60 days.

Businesses in the tourism and retail sectors that sell wine to travellers may need to ensure they provide appropriate tax invoices and information about the TRS, though the Regulations do not impose direct obligations on them - the compliance burden falls on the purchaser.

Rights of purchasers. A person who purchases wine meeting the specified conditions has a right to be paid an amount of wine tax under section 25-5 of the Act. The right crystallises upon the conditions in the Regulations and the Act being satisfied: purchase that meets Subdivision 168-A of the GST Regulations; departure from the indirect tax zone and export as accompanied baggage in the circumstances specified in Subdivisions 168-B and 168-C of the GST Regulations; making a claim via an approved process. The amount is the statutory formula (29% of half GST-inclusive price). The right to payment in cash is subject to rounding to the nearest 5 cents. The purchaser may choose to present a tax invoice to a Customs officer (who then issues a payment authority) or lodge a claim with the Comptroller-General of Customs, providing payment instructions (credit card, bank account, or cheque).

Duties of Customs officers. Under regulation 25-5.05, an officer of Customs who is presented with a tax invoice and satisfied that the purchaser is entitled must give a payment authority containing identifying information and the amount. This is mandatory - “must give” - not discretionary. The officer then applies sections 168-5.14 to 168-5.16 of the GST Regulations as if the authority were under the GST Regulations. Those sections (not reproduced) deal with the form and effect of payment authorities.

Duties of the Comptroller-General of Customs. Under regulation 25-5.06, when a claim is lodged with the Comptroller-General (rather than through a Customs officer at departure), the Comptroller-General must be satisfied that the purchaser is entitled. Then the amount must be paid in accordance with the purchaser’s instructions within 60 days of the later of: receipt of the claim, or if information is requested, receipt of that information. This imposes a statutory payment timeline.

Duties of producers. While the Regulations do not expressly impose duties on producers, they create conditions for classification. A producer who wishes to claim that a beverage is “grape wine”, “grape wine product”, “fruit or vegetable wine” or “mead” for the purposes of the Act must ensure compliance with the requirements. For example, a producer of mead who adds fruit must ensure that pre-fermentation the honey content is at least 14% by volume and the fruit no more than 30% by volume; must reconstitute concentrated fruit juice per manufacturer’s recommendations; and must ensure final ABV between 8% and 22%. Non-compliance could mean the product is not “wine” and may be subject to different tax treatment (e.g., excise as an alcoholic beverage). Producers therefore have an incentive to keep records demonstrating compliance.

No duties on retailers directly. The Regulations do not impose record-keeping or reporting duties on wine retailers; those duties if any arise from the GST Act and the wine tax law itself. The Regulations merely define the scope of purchaser eligibility.

The Regulations themselves do not create any penalty provisions. Penalties for non-compliance with the wine tax law will be found in the Act (e.g., for making false statements in a refund claim, failing to keep records, or misclassifying product). However, the Regulations indirectly set the factual basis for potential disputes. For example, if a purchaser claims a refund for wine that does not meet the purchase or export conditions specified through cross-reference to the GST Regulations, the refund may be denied and the person could be liable to repay the amount plus penalties under the Act. Similarly, if a producer claims a product is mead but the product does not satisfy the compositional conditions in regulation 31-6.01, the Commissioner may reassess wine tax liability, potentially with penalties. The rounding rule (25-5.04) is mechanical and not subject to discretion; any miscalculation could lead to disputes over overpayment or underpayment. The 60-day payment deadline in regulation 25-5.06 imposes an obligation on the Comptroller-General - if not met, the purchaser might have a right to interest or a remedy under administrative law, but the Regulations do not specify a consequence for late payment. Enforcement of the TRS conditions is likely to be handled by the Australian Border Force (for Customs officers) and the Australian Taxation Office (for wine tax generally). The cross-reference to GST Regulations means any failure to comply with those (e.g., export outside the specified time) automatically disqualifies the wine tax refund, even if the purchaser complied with every word of these Regulations.

The Regulations are explicitly made under the A New Tax System (Wine Equalisation Tax) Act 1999 and must be read together with that Act. The Act sets the rates, the scheme of liability, and the administrative provisions; the Regulations fill in gaps. For the tourist refund scheme, the Act (section 25-5) provides that an amount is payable if regulations specify certain matters; these regulations specify purchases, departure and export, the amount, and payment procedures. The Regulations also incorporate large parts of the A New Tax System (Goods and Services Tax) Regulations 2019 by reference. Specifically: Subdivision 168-A (purchase requirements), Subdivision 168-B (departure circumstances), Subdivision 168-C (export as accompanied baggage conditions), and sections 168-5.10 to 168-5.16 (dealing with tax invoices, payment authorities and claims for the GST refund). This creates a layered compliance landscape: a claimant must satisfy both the GST TRS conditions and the wine-specific conditions. If the GST requirements change, the wine TRS requirements change automatically, unless the regulations are amended. The interaction with the Customs Act 1901 is indirect: “officer of Customs” is given the same meaning as in that Act, and the officer’s powers to issue payment authorities are keys to the TRS mechanism. For producers, the interaction is primarily with the Act’s definitions of “wine” (sections 31-4, 31-6, 31-8). The Regulations specify what is not already defined in the Act: e.g., the Act says grape wine must not contain more than 22% ABV, but it was a regulation requirement to say that; now regulation 31-2.01 restates that. Similarly, the Act says fruit or vegetable wine cannot contain more than 22% ABV and cannot contain added alcohol other than grape or neutral spirit; the Regulations add that if such spirit is added, the product must be at least 15% ABV. The Regulations also interact with the Food Standards Australia New Zealand Code (implicitly, as they use terms like “herbs”, “spices”, “caramel”) but do not cross-reference it. The transitional provision (regulation 35-1.01) interacts with the repeal of the 2000 regulations, preserving the old Part 5 for wine purchased before 1 October 2019. This means two sets of TRS rules may be in play for different purchase dates until all pre-commencement wine has been exported.

The Regulations were made on 5 September 2019 and commenced on 1 October 2019. They repealed the A New Tax System (Wine Equalisation Tax) Regulations 2000 in their entirety (Schedule 1). The 2019 Regulations represent a re-making of the subordinate legislation under the Act, not an amendment to the old ones. The commencement table shows only the original making; no amendments are listed in the source document. The instrument was made by the Governor-General on the advice of the Federal Executive Council, with the Assistant Treasurer (Michael Sukkar) as the minister responsible. The authority is the Act itself; there is no evidence of subsequent amending instruments in the text provided. The transitional provision (regulation 35-1.01) preserves the old Part 5 for pre-commencement purchases, which suggests the government considered that retrospective application would be unfair or administratively complex. The Regulations also enacted minor changes: the new Division 31 provisions for grape wine, grape wine products, fruit or vegetable wine, and mead appear to be a restatement or slight modification of the previous definitions, as the 2000 regulations contained analogous provisions (which are now repealed). The source does not provide the old text, so we cannot compare. The GST Regulations cross-reference was updated from the 2000 version to the 2019 version. Practitioners should confirm that the Regulations have not been amended since 2019 by checking the Federal Register of Legislation, as the source only reflects the original form.

The source text does not mention any cases. The Regulations themselves are subordinate legislation and are unlikely to be the direct subject of litigation; challenges would more likely target the Act or administrative decisions made under the Regulations. For example, a dispute over whether a particular mead product met the requirements of regulation 31-6.01 could end up in the Administrative Appeals Tribunal or the Federal Court as a review of a tax assessment. Similarly, the rounding rule or the 60-day payment deadline could give rise to judicial review if the Comptroller-General fails to comply. As of the date of the instrument (September 2019), the Regulations are relatively new, and it is unlikely that significant litigation has yet crystallised. The Regulations’ incorporation of GST Regulations provisions means that any litigation over the meaning of “accompanied baggage” or “departure” in the GST context would likely be read across to the wine TRS. The transitional provision (old Part 5 applies to pre-1 October 2019 purchases) could create forum-shopping or disputes over the date of purchase for refund claims. Without specific case names in the source, we cannot identify any litigation; the deep dive must not invent cases. A prudent practitioner would check the administrative decisions database for cases involving section 25-5 of the Act and these Regulations.

Several provisions are traps for the unwary. Rounding rule (regulation 25-5.04): If the refund amount is not an exact multiple of 5 cents, it is rounded to the nearest 5 cents, with halves rounding up. A purchaser expecting a refund of, say, $1.27 will only get $1.25; conversely $1.28 becomes $1.30. This is minor but can cause confusion if the consumer was told the refund is exactly 14.5% of the purchase price. Cross-reference to GST Regulations: The TRS conditions are not fully set out in these Regulations; they are incorporated by reference. A purchaser who reads only these regulations may miss the specific requirements in the GST Regulations (e.g., the minimum purchase value - $300? - or the requirement that the wine must be exported within 60 days of purchase, any exceptions, etc.). The Regulations do not cross-reference the relevant GST Act subsection (168-5) directly for the external Territory payment rule; they refer to subsection 168-5(1A) of the GST Act, but careful mapping is needed. Mead fruit addition volume calculations (regulation 31-6.01(6)): Concentrated fruit juice or pulp is to be assumed reconstituted according to the manufacturer’s recommendations. This can produce non-intuitive results: if a producer adds a small volume of concentrate, the deemed reconstituted volume could be much larger, affecting the 30% volume cap and the 14% honey requirement. Producers must keep the manufacturer’s instructions. Fortified fruit/vegetable wine minimum ABV (15%) - this interacts with the 22% cap. Adding spirit to fruit wine without reaching 15% ABV is prohibited and could mean the product is not wine. Grape wine products - no addition of flavour of any alcoholic beverage except wine. This prohibits flavouring a grape wine product with, say, beer or spirits flavour, even if natural. Transitional provision: Wine purchased before 1 October 2019 is subject to the old regulations Part 5. This means different documentation, amount calculation and possibly different purchase conditions. A person who bought wine in September 2019 and attempts to export it in October 2019 must follow the old scheme. The 60-day payment deadline runs from the later of receipt of claim or receipt of requested information. The Comptroller-General can extend the practical timeline by requesting further information. Cash payment only for amounts not an exact multiple of 5 cents - but the regulation applies “if an amount of wine tax is to be paid in cash” - the Regulations do not define cash; presumably includes Australian currency. If the Comptroller-General instead pays by electronic transfer, the rounding rule may not apply? The regulation is triggered only if the payment is in cash; for electronic transfers, the precise amount may be paid. This creates an anomaly. The external Territory provision (25-5.07) ties to GST Act subsection 168-5(1A) - but that subsection refers to supplies made to residents of external Territories who send goods home. The timing and manner are identical to the GST refund, which may have different conditions (e.g., no departure from the indirect tax zone required). The interplay between the two Acts could create confusion.

For travellers seeking a wine tax refund: (1) Buy wine from a retailer who provides a tax invoice that meets the GST requirements (see GST Regulations). (2) Keep the wine as accompanied baggage (hand luggage or checked baggage). (3) Leave Australia (depart the indirect tax zone) within the period specified in the GST Regulations (generally within 60 days of purchase). (4) At departure, present the tax invoice to a Customs officer. If satisfied, the officer issues a payment authority with the refund amount (rounded to nearest 5 cents if cash). Alternatively, after departure, lodge a claim with the Comptroller-General of Customs using approved forms, providing payment instructions. (5) Include the claim with evidence of export (e.g., boarding pass). (6) If payment instructions are for bank account or credit card, the Comptroller-General will pay within 60 days of the claim being complete. (7) For residents of external Territories sending wine home: follow the GST refund claim process for external Territories; the wine tax refund will be paid in the same period and manner.

For wine producers: Ensure that any product labelled as “wine” under the Act complies with the compositional requirements. For grape wine: ABV not over 22%. For grape wine products: no added flavour of any alcoholic beverage other than wine; if using ethyl alcohol for vegetable extracts, use only as an essential extraction solvent, not adding more than 1% ABV. Keep records of ingredients and processes. For fruit or vegetable wine: if adding grape or neutral spirit, ensure final product at least 15% ABV and no more than 22% ABV; do not add any other type of alcohol. For mead: observe all five sub-conditions if adding fruit - measure honey content pre-fermentation (minimum 14% by volume), fruit or product maximum 30% by volume (reconstituting concentrates per manufacturer’s recommendations), and final ABV between 8% and 22%. If adding spirit, the result must be between 15% and 22% ABV. Herbs, spices, and post-fermentation caramel are free to add without volume constraints. Keep detailed production records, including manufacturer instructions for any concentrated fruit juice or pulp used. Apply the reconstitution rule carefully: if the concentrate is e.g., 4-fold, the volume used should be multiplied by 4 for calculating the 30% cap. Producers of fortified products should document the ABV before and after addition to confirm compliance with the minimum 15% and maximum 22% limits. For all producers, the definitions affect wine tax liability, entitlement to the wine equalisation tax rebate, and potential interaction with excise. A mis-classified product could lead to higher tax. Legal advice should be sought if a product is near the boundaries. For Customs officers and the Comptroller-General: Follow the procedures in regulations 25-5.05 and 25-5.06. Issue payment authorities promptly upon satisfaction; process claims within 60 days. The rounding rule applies only to cash payments; for electronic transfers, pay the exact calculated amount unless policy dictates otherwise. Ensure that the TRS claim relates to wine purchased on or after 1 October 2019; if earlier, apply the old regulations.