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ATO winds back tax breaks for pubs, breweries

Flexible rules put in place by the ATO to support COVID-19 affected businesses like breweries and pubs will come to end on February 1.

At the end of March last year the ATO relaxed rules around the production of hand sanitiser and for the repackaging of alcoholic beverages for takeaway consumption – like the refilling of growlers from kegged beer.

Come February 1 the pre-COVID arrangements surrounding these will resume.

In regards to repackaging alcoholic beverages for takeaway, the likes of pubs who wish to continue doing so will need to apply to the ATO for the appropriate excise manufacture licence and pay duty on it.

The ATO wesbite says: “Generally, packaging isn’t a manufacturing process for excise purposes. However, manufacturing beer has an extended meaning to cover when you repackage duty-paid beer that was entered at a concessional rate. This may include filling growlers. The rate of excise duty that applies to commercial beer is based on the: alcoholic strength of the beer size and design of the container you package it in”.

In the case of hand sanitiser, the ATO, in response to increased demand, “relaxed and streamlined the excise licensing and permit rules relating to the production, supply and use of alcohol for hand sanitisers”.

After January 31, other excise-licensed entities like a brewery that want to produce their own spirit for the purposes of producing hand sanitiser will need to apply for an amendment to their licence. They will also require an ATO permit to use spirit for the purposes of producing hand sanitiser.

The ATO said it aims to make these applications a priority. Once approved, if the brewery is producing spirit for the purposes of producing hand sanitiser, they are required to report it using the free-rate tariff item on their excise return.

For more information on how these changes affect you, head to the ATO website.

Meanwhile, just before Christmas the federal government announced it was looking to reduce the red tape costs that surround alcohol excise.

On December 22 the Assistant Treasurer Michael Sukkar said the Morrison Government “will review Australia’s excise and excise-equivalent customs duty regime to identify unnecessarily cumbersome and duplicative processes” by conducting a new deregulation taskforce.

The comprehensive review will include looking into ways to cut regulatory overheads for business and how to support new investments in the beverage manufacturing sector.

However, the taskforce will not be looking into the base or rates of excise taxation.

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