Refund of wine equalisation tax overpaid after 1 July 2006

Has an entity satisfied the time limit for claiming a wine tax credit in section 105-55 of Schedule 1 to the Taxation Administration Act 1953 (the Schedule) if the entity returned an amount of wine equalisation tax (WET) in error on its business activity statement (BAS) for July 2002, paid the amount in August 2002, and notified the Commissioner of the error in August 2006?

Yes. An entity has satisfied the time limit for claiming a wine tax credit in section 105-55 of the Schedule if the entity returned an amount of WET in error on its BAS for July 2002, paid the amount in August 2002, and notified the Commissioner of the error in August 2006.

An entity is registered for GST and lodges its BAS on a monthly basis.

The entity overstated its WET liability in its BAS for the month ended 31 July 2002.

The WET was paid in August 2002.

The entity notified the Commissioner of the overpayment in August 2006.

The Wine Tax Credit Table in section 17-5 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) sets out all the situations in which a person is entitled to a wine tax credit. The table also stipulates the time when the wine tax credit arises. Credit Ground CR1 specifies that a wine tax credit arises if an entity has paid an amount of WET that was not legally payable. CR1 also specifies that in such a situation, the entitlement to a wine tax credit arises 'when the amount became overpaid'.

Subsection 17-10(1) and section 21-15 of the WET Act permit an entity that is registered or required to be registered for GST to reduce its net amount for a tax period by the amounts of wine tax credits that arise during that period.

However, section 105-55 of the Schedule specifies that an entity is not entitled to a wine tax credit for a particular tax period under section 21-15 of the WET Act unless it meets one of a number of requirements. The most relevant requirement is set out in paragraph 105-55(1)(a) of the Schedule, which requires the entity to have notified the Commissioner of its entitlement to a wine tax credit within four years after the end of the tax period to which the credit relates.

As explained above, the entity's entitlement to a wine tax credit arose during the tax period ended 31 August 2002, which was the tax period in which it overpaid its wine tax.

Therefore the four year time limit specified in paragraph 105-55(1)(a) of the Schedule was due to expire on 31 August 2006. As the entity advised the Commissioner of its entitlement to a wine tax credit in August 2006, the entity has satisfied the time limit for claiming a wine tax credit. Note: Changes made under the Indirect Tax Laws Amendment (Assessment) Act 2012 mean that section 105-55 of Schedule 1 to the TAA will only apply in relation to refunds that relate to tax periods starting before 1 July 2012 and refunds that do not relate to any tax periods but relate to liabilities or entitlements that arose before 1 July 2012.The section will be repealed on 1 January 2017.

Date of amendment Part Comment 29 November 2013 Reason for Decision, Related Public Rulings, Other references Updated references and added note.

Date of amendment | Part | Comment

29 November 2013 | Reason for Decision, Related Public Rulings, Other references | Updated references and added note.