Wine Equalisation Tax: beverage container deposit - WET taxable value

Is an amount of money that a manufacturer separately identifies on an invoice as being a container deposit part of the taxable value for the purposes of Division 9 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Yes, an amount of money that a manufacturer separately identifies on an invoice as being a container deposit is part of the taxable value of wine for the purposes of Division 9 of the WET Act.

An entity is a manufacturer of wine as defined in section 31-1 of the WET Act and is registered for GST.

The entity sells the wine by wholesale sale.

The wine that is sold by the entity is subject to Division 2 of Part 8 of the Environment Protection Act 1993 (SA) (EPA). This Division establishes a set of requirements that apply to the sale of certain beverages when sold in containers of a certain size. Among other things the Division requires that: • the container has appropriate markings or labelling that inform the purchaser of their entitlement to receive an amount on delivery of the container to an approved collection point • beverages in containers covered by the Division may only be sold in areas in which a collection facility is present • collection depots must pay the refund amount to people who deliver the specified containers to the collection depot.

The entity has contracted with a super collector whereby the super collector pays the appropriate amount to the person who returns the containers.

The entity pays the super collector an amount to cover administration costs and the payments that the collection depots are required to pay in respect of returned containers.

Subsection 9-5(1) of the WET Act provides that the general rules for calculating the taxable value of a taxable dealing are set out in the Assessable Dealings Table.

The Assessable Dealings Table is in section 5-5 of the WET Act and lists all the assessable dealings that are subject to wine tax with the taxable value determined by reference to Column 5 contained in that table.

Where an entity manufactures wine and sells the wine by wholesale sale, the relevant assessable dealing is AD1a in the Assessable Dealings Table. The normal taxable value specified in the table for AD1a is 'the *price (excluding wine tax and GST) for which the wine was sold'.

Price is defined in section 33-1 of the WET Act as having the meaning given by section 9-75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Subsection 9-75(1) of the GST Act provides that 'price' is the sum of the consideration for the supply expressed as an amount of money inclusive of GST and in lieu of receiving money, the GST inclusive market value of that consideration.

In this case the entity receives consideration in the form of money for the wholesale sale of the wine. The invoice includes a separate amount that the entity identifies on the invoice as being a container deposit.

It is considered that the amount identified on the invoice as being a container deposit is essentially a business cost to the entity, incurred by the entity in selling the wine in South Australia. The fact that the entity passes on this cost by itemising the amount on the invoice is irrelevant for the purposes of establishing the price for which the wine is sold and to this end should not be distinguished from any other cost that is accounted for by the entity in formulating its pricing structure for the sale.

For the reasons outlined above, an amount of money that a manufacturer attributes to a container deposit is part of the taxable value for the purposes of Division 9 of the WET Act.