Hi everyone,
Here are the facts:
+ Client is registered for GST, but is not registered for WET
+ Client supplies to foreign cruise ships (GST free sales)
+ Client purchases wine from Australian wholesales, and was charged WET on the invoice. The wine is for a foreign cruise ship.
Questions:
Thank you.
Hi @voinhimattihi,
Your client shouldn't have been charged WET on the wine purchase, and yes, they can claim a WET credit for the WET that was incorrectly charged.
Here's why. Wine is exempt from WET when the supply is GST-free. Since your client's sales to foreign cruise ships are GST-free supplies, the wine used for this purpose is exempt from WET. The Australian wholesaler should have treated this transaction as exempt from WET, similar to how WET doesn't apply to wine being exported from Australia.
Because your client paid WET when they weren't required to, they're entitled to claim a WET credit. This is one of the situations where you can claim a credit – when you didn't quote your ABN at the time of purchase even though you were entitled to quote, and the price you paid included WET. Your client should have been able to quote their ABN to the wholesaler for this purchase, given the wine was for GST-free supply to foreign cruise ships.
To claim the credit, your client will need to report the WET credit amount at label 1D 'Wine equalisation tax refundable' on their BAS. They'll need to keep records of the purchase invoice showing the WET charged and evidence that the wine was supplied to foreign cruise ships as a GST-free supply.
Your client should also contact their Australian wine wholesaler to clarify that future purchases for GST-free supplies (like sales to foreign cruise ships) should be made under quote by providing their ABN, so WET isn't charged on these transactions. If the wholesaler needs guidance on when to accept ABN quotes for WET-exempt sales, they can review the information on wholesale sales and GST-free supplies on our website.
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