Trustee for The Lubiana Family Trust and Commissioner of Taxation (Taxation)
[2022] AATA 2826
•30 August 2022
Trustee for The Lubiana Family Trust and Commissioner of Taxation (Taxation) [2022] AATA 2826 (30 August 2022)
Division:SMALL BUSINESS TAXATION DIVISION
File Number:2021/2360-2364
ReTrustee for The Lubiana Family Trust
APPLICANT
AndCommissioner of Taxation
RESPONDENT
Decision
Tribunal:Deputy President Bernard J McCabe
Senior Member Robert J OldingDate:30 August 2022
Place:Sydney
The decision under review is affirmed.
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Deputy President Bernard J McCabe
Catchwords
TAXATION – WINE EQUALISATION TAX – where wine sold for single undissected amount – whether amounts said to be attributed to containers, delivery and “goodwill, reputation and romance” of ultra-premium wine products excluded from taxable value – held no exclusion of these amounts – decision affirmed
Legislation
A New Tax System (Goods and Services Tax) Act 1999 (Cth), ss 9-75, 9-15(1), 195-1 (consideration)
A New Tax System (Wine Equalisation Tax) Act 1999 (Cth), ss 5-5, 31-1, 31-2, 9-65, 27-15
Taxation Administration Act 1953 (Cth), s 14ZZKCases
AP Group Ltd v Federal Commissioner of Taxation [2013] FCAFC 105
ATS Pacific Pty Ltd v Commissioner of Taxation [2014] FCAFC 33
CCA Beverages (Sydney) Pty Ltd v Federal Commissioner of Taxation 97 ATC 4213
Commissioner of Taxation v Qantas Airways Limited [2012] HCA 41
Commonwealth Quarries (Footscray) Pty Ltd v Federal Commissioner of Taxation [1938] HCA 13
EMI (Australia) Limited v Commissioner of Taxation of the Commonwealth (1971) 45 ALJR 349
NZWINEIMPORTS Pty Ltd v Commissioner of Taxation [2016] AATA 824
Re Food Supplier and Commissioner of Taxation [2007] AATA 1550
Royal & Sun Alliance Insurance Group plc v Customs and Excise Commissioners [2001] STC 1476Secondary Materials
Explanatory Memorandum to the A New Tax System (Wine Equalisation Tax) Bill 1998 (Cth)
Second Reading Speech for the A New Tax System (Wine Equalisation Tax) Bill 1998 (Cth)REASONS FOR DECISION
Deputy President Bernard J McCabe,
Senior Member Robert J Olding30 August 2022
The applicant, a winemaker producing ultra-premium wines marketed as “Stefano Lubiana Wines”, is liable for wine tax on the “taxable value” of its sales of wine to wholesale and retail customers.
In respect of wholesale sales, the taxable value is “the *price (excluding wine tax and *GST) for which the wine was sold” and for retail sales, it is the weighted average of the applicant’s prices for wholesale sales of equivalent wine: A New Tax System (Wine Equalisation Tax) Act 1999 (Cth) (“WET Act”), s 5-5. [1]
[1] All legislative provisions referred to in these reasons are provisions of the WET Act unless other indicated.
The primary issue to be determined in this case is the construction and application of the expression “the price . . . for which the wine was sold.”
The Commissioner of Taxation says that expression means the undissected amount (but excluding wine tax and GST) the applicant invoiced its purchasers of wine because that (along with wine tax and GST) is the amount which, contractually, the customer had to pay to obtain title to the wine.
The applicant says it is only required to pay wine tax on “wine” as defined for wine tax purposes - relevantly, “the product of the complete or partial fermentation of fresh grapes.”[2] However, the applicant argues the undissected amounts it invoiced to its customers were for the supply of:
(a)the fermented grapes contained in their product;
(b)the bottle and other packaging (the “Container element”);
(c)the “goodwill, reputation and romance” attributable to the product being a Stefano Lubiana Wines product (the “Goodwill element”);
(d)the delivery of the product to the purchaser’s premises (the “Delivery element”).
[2] Section 31-2.
On this premise, the applicant says the amount for which its “wine”, as defined, was sold is not the amount it invoiced its customers. Rather, the applicant says the taxable value is limited to the upper end of a range of market prices for wholesale sales of bulk wine in Australia, which does not include amounts for the Container, Goodwill or Delivery elements. The applicant says the “prices” paid by customers for the Container, Goodwill and Delivery elements, or at least the prices for one or more of those elements, must be excluded from the invoiced amount to arrive at the taxable value.
We have decided the amount for which the applicant’s wine was sold by wholesale is the amount invoiced to the customer. In other words, we are not persuaded it is appropriate to deduct any amount for the value of the Container, Goodwill or Delivery elements. Our reasons follow.
decision under review
On 4 November 2020, the applicant lodged an objection against assessments of its net amounts for the tax periods ended 30 September 2016 to 30 June 2020, on the ground that the wine tax amounts included in the net amounts were excessive. A further objection on the same ground against the assessment of net amount for the tax period ended 30 September 2020 was lodged on 17 March 2021.
The Commissioner disallowed the objections on 9 April 2021. It is that objection decision which is before the tribunal for review.
statutory framework
The general rules for calculating taxable value are set out in the Assessable Dealings Table in s 5-5 of the WET Act. For the applicant’s wholesale sales, the relevant assessable dealing is AD1a: *wholesale sale by an entity that *manufactured the wine in the course of any business.
The taxable value specified in the Assessable Dealings Table for AD1a is:
the *price (excluding wine tax and *GST) for which the wine was sold.
Although a different assessable dealing and taxable value applies for the applicant’s retail sales, and the calculation of producer rebates is also in issue, the parties agree the principles applicable to determination of the meaning and application of the expression “the price . . . for which the wine was sold” will also resolve those issues.
The expressions “wine” and “price” in the specified taxable value for AD1a dealings are defined terms.
“Wine” is defined in s 31-1 as various styles of wine, including “grape wine” which in turn is relevantly defined in s 31-2(1) as a beverage that “is the product of the complete or partial fermentation of fresh grapes or products derived solely from fresh grapes” and complies with any requirements specified under regulations. To avoid prolixity, we refer to this defined term in an abbreviated way as “fermented grape products”.
“Price” has the meaning given by s 9-75 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (“GST Act”), where is it relevantly defined, so far as the consideration for the supply is expressed as an amount of money, as that amount. This definition in turn directs attention to the GST definition of “consideration”. Section 195-1 of the GST Act contains this definition:
consideration, for a supply or acquisition, means any consideration within the meaning given by sections 9-15 and 9-17, in connection with the supply or acquisition.
Section 9-15(1) of the GST Act states:
Consideration includes:
(a) any payment, or any act or forbearance, in connection with the supply of anything; and
(b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything.
The definition of consideration is inclusive. The ordinary meaning of consideration may also be relevant. Consistent with ‘consideration’ being defined, not as a stand-alone concept, but as consideration “for” a supply (or acquisition), it has been held that consideration is what is given “in order to obtain” a supply.[3]
[3] AP Group Ltd v Federal Commissioner of Taxation [2013] FCAFC 105, [33].
Additionally, the WET Act has provisions dealing specifically with containers, which we refer to below in relation to the Container element, and for apportionment of global amounts found in s 27-15, which provides:
27‑15 Apportionment of global amounts
(1) If there is a need to know the *price for which particular wine was sold, but the parties have not allocated a particular amount to the wine, the price for which the wine was sold is (for the purposes of the *wine tax law) the price for which the wine could reasonably be expected to have been sold if it had been sold separately.
(2) Similarly, if there is a need to know how much of a global amount relates to some other element of a transaction, but the parties have not allocated a particular amount to that element, the amount to be allocated to that element (for the purposes of the *wine tax law) is the amount that could reasonably be expected to have been allocated to that element if that element had been the only subject matter of the transaction.
issue for determination
We must decide whether the applicant has discharged the burden of proving[4] the invoiced amounts in their entirety were not payments in connection with supplies that are sales of fermented grape products and those amounts should be reduced by amounts attributable to one or more of the Container, Goodwill and Delivery elements.
[4] The applicant has the burden of proving the relevant assessments are excessive and what the assessments should have been: Taxation Administration Act 1953 (Cth), s 14ZZK.
To answer that question requires, in our view, determination of the character of the sales made by the applicant to its customers. Did the applicant in each case make a single sale of packaged, delivered “wine” (fermented grape products), or did each sale comprise up to four sales, being sales of “wine”, containers, “goodwill, reputation and romance” and delivery? Put another way, was the invoiced amount “for” the sale of fermented grape products or was it for separate sales of fermented grape products, containers, “goodwill, reputation and romance” and delivery?
the evidence
The applicant is the trustee of a family trust for the family of Mr Steve Lubiana and Mrs Monique Lubiana. Mrs Lubiana is a director of the trustee and provided both written witness statements and oral testimony.
In her first witness statement,[5] Mrs Lubiana described how the applicant produces a number of different varieties of wines, which are certified as biodynamic and organic. The wines are also vegan, as no animal products are added. The business of “Stefano Lubiana Wines” was established in South Australia but relocated to Tasmania in 1990. It has an industry reputation for being a manufacturer of ultra-premium wines, which is enhanced by the biodynamic and organic certifications.
[5] Witness Statement of Monique Lubiana, 4 November 2020.
In her first supplementary witness statement,[6] Mrs Lubiana describes wholesale sales to distributors. The applicant engages and pays a freight company to deliver product to the distributors. The reputation of Stefano Lubiana Wines depends in part on the product arriving in perfect condition, so the wine is always shipped with a trusted freight company using refrigerated transport.
[6] Supplementary Witness Statement of Monique Lubiana, 17 March 2021.
The net amount payable on the invoice is the amount the applicant is paid for the wine. The amount charged includes the cost of delivery.
The evidence set out above was essentially unchallenged, and we accept it.
Mrs Lubiana went on to state the applicant would not be paid the invoiced amount if the products were not “Stefano Lubiana Wines”. She insisted the same price would not be paid for a commoditised fermented grape product or if the same fermented grapes were sold under a different brand name. Mrs Lubiana said it is:
the goodwill, reputation and romance attributable to a ‘Stefano Lubiana Wine’ product that enables it to attract the net amount invoiced.[7]
[7] Supplementary Witness Statement of Monique Lubiana, 17 March 2021, [7].
In her oral evidence, Mrs Lubiana affirmed these assertions and explained:
What affects the price is our story. Our story is unique. We are Steve and Monique Lubiana. And we relocated to Tasmania 30 years ago when we were laughed at by the South Australian industry. And, you know, my husband is a fifth generation winemaker from Italian migrants who’s made good. And we worked very hard, and we still do, to promote ourselves and tell our very unique story. Because we’re relying on customers to connect to that story to make a sale. We rely on them, their emotional intelligence, to meet ours and to understand our history, the romance attached to it. We want to transport people to Tuscany when they’re drinking our wine, and to, you know, enjoy potentially a previous holiday. And it’s about – our story would be the most important thing in price.[8]
[8] Transcript of proceedings, P-18, lines 12-22.
Surprisingly, Mrs Lubiana asserted that neither the vintage nor the quality of the wine determined or even necessarily affected its price.[9] The applicant seeks to obtain the maximum price the market will bear, but Mrs Lubiana asserted the applicant “can’t get that price unless they feel they are connecting with us”.[10]
[9] Transcript, P-13-P15.
[10] Transcript, P-18, lines 30-31.
Although at one point in cross examination Mrs Lubiana conceded it is “possible” a buyer would not know the applicant’s “story”,[11] the thrust of her evidence, as confirmed in response to later questioning, was that quality and vintage do not affect the price, as the following exchange indicates:
What I am putting to you is this. It may be accepted, as you say, there’s a story to your wine, and that affects the price? --- Yes
But you seem to say that, that is all that affects the price, and that the product you’re selling – the actual grape product – doesn’t affect the price, its quality doesn’t affect the price. It’s entirely about matters of romance story etcetera. Is that right? --- Yes, I say that.[12]
[11] Transcript P-19, lines 43-44.
[12] Transcript, P-20, lines 11-17.
Mrs Lubiana accepted she does not have any expertise in marketing analysis. She also said:
my husband actually dictates a lot of the pricing. You know, he, for whatever reason, sometimes he doesn’t give me a reason. And I’ll ask him, what is this wine? And he’ll say listen, I want to charge $50 for that. And I’ll say okay. I don’t necessarily ask for reasons.[13]
[13] Transcript, P-17, lines 9-12.
Mr Lubiana did not give evidence in the proceeding.
consideration
In his written outline of submissions and oral submissions, the Commissioner relied in particular on the judgment of the High Court in EMI (Australia) Limited v Commissioner of Taxation of the Commonwealth.[14] The EMI case concerned the meaning, in the equivalent sale (taxable) value provisions of the original sales tax legislation, of the expression “the amount for which [the] goods are sold”.
[14] (1971) 45 ALJR 349.
In holding that certain royalties relating to the sale of records (sound recordings) fell within this expression, Windeyer J stated that:
“the amount” for which a thing is sold means . . . the sum total of all moneys that the buyer promises, expressly or tacitly, to pay to, or for, the seller in order that he, the buyer, may get a good title to the goods that he has agreed to buy.[15]
[15] (1971) 45 ALJR 349, 353.
Apart from the fact it is concerned with different legislation, the applicant seeks to distinguish this case on the basis it was concerned with a single item of goods for which multiple payments were made. Here, the applicant says, there were four different items being sold. That submission brings into focus whether the applicant’s sales are properly characterised as a single sale of wine (as defined) or, as the applicant maintains, up to four separate sales.
A single sale of “wine” or separate sales of wine, containers, “goodwill, reputation and romance”, and delivery?
The applicant invoiced the wine as a single sale. It did not seek to differentiate, and allocate a separate price to the “wine” and each of the Container, Goodwill and Delivery elements. That is consistent with a characterisation of a single transaction, though not determinative in itself.
In the GST context, Downes J, sitting as the then President of this Tribunal, observed in Re Food Supplier and Commissioner of Taxation[16] there was a distinction between a “composite supply” and a “mixed supply”. His Honour noted that in a composite supply “items which are integral, ancillary or incidental to the main item may be treated for GST purposes in the same way as the main item” - giving the example of a serviette supplied with food – whereas a mixed supply is a supply of separate items together. We see no reason why the same analysis should not apply for wine tax purposes.
[16] [2007] AATA 1550, [5].
“Goodwill, reputation and romance”
Because she is not an expert in marketing analysis, and because her husband often sets prices, Mrs Lubiana’s evidence of the relationship between price, quality and the applicant’s “story” must be treated with some caution. Nevertheless, we accept she has many years’ experience in dealing with customers, and that experience informs her evidence.
We accept the applicant’s “story” plays a key role in bringing in custom and allowing the applicant to achieve premium prices. But we do not accept it is appropriate to treat the so-called “goodwill, reputation and romance”, said to arise out of this story and to be attributable to applicant’s product being a Stefano Lubiana Wines product, as separate from the sale of the product. The “story” or the “reputation and romance” may be the force that brings in custom or allows the applicant to command premium prices, but that does not mean they are the subject of sales separate from the sale of the wine.
The submission that the Goodwill element of the sale of the “wine” is appropriately separated out and part of the undivided invoice price attributed to it seems to us to be so artificial it borders on the unarguable. The parties to the transactions have not themselves attributed an amount to this element in their dealings or otherwise conducted themselves in a way that suggests such multiple sales were occurring.
To the extent that the characterisation of a sale is “a matter of practical or business reality”,[17] this consideration would weigh heavily against the applicant. Far from being consistent with the practical or business reality, that characterisation would, with respect, require a suspension of reality.[18]
[17] ATS Pacific Pty Ltd v Commissioner of Taxation [2014] FCAFC 33, [43].
[18] The applicant’s submission calls to mind Lord Justice Sedley’s famous (at least in value added tax circles) observation that: “Beyond the everyday world, both counsel have explained to us, lies the world of value added tax (VAT), a kind of fiscal theme park in which factual and legal realities are suspended or inverted”: Royal & Sun Alliance Insurance Group plc v Customs and Excise Commissioners [2001] STC 1476, [54]. It seems to us, though, that the kind of inversion of reality urged upon us by the applicant has not generally been adopted in relation to Australian indirect tax regimes.
A transaction for the sale of wine, no matter how revered the brand may be, cannot sensibly be characterised as separate sales of fermented grape product and “goodwill, reputation and romance” associated with the brand. Accepting the applicant’s customers enjoyed the “reputation and romance” associated with the applicant’s wines, we can identify no basis on which such features – or the “feeling or emotional reaction”, as Mr Meng, who appeared for the applicant, put it - could be said to have passed from the applicant to its customers. That would be the case even if the customers were retail customers, but especially so for wholesale customers, such as distributors or retailers, who acquire the wine as stock for resale.
The evident purpose of defining “wine” in the way it is defined in the wine tax legislation is to identify the types of wine and wine-like beverages that are subject to wine tax. That explains why particular factors feature in the definition, such as the product from which the beverages are derived (eg grapes) and fermentation and alcohol content. The precision with which the subject of the tax is identified does not warrant the type of artificial dissection of the price charged for the wine urged upon us by the applicant.
Our approach does not involve a departure from the text of the legislation. In particular, it is not a case of erroneously limiting identification of the incidence of the tax to the “essence” of the transaction.[19] Rather, it is faithful to the text, but applying it to the character of the transaction determined in a practical and realistic, rather than artificial and unrealistic, way. The applicant sells wine. Its sales are to a specified location and, necessarily, in containers. But it is wine, as defined, the applicant sells and for which it receives the contract price. That price is the consideration for the wine as defined in the WET Act.
[19] Commissioner of Taxation v Qantas Airways Limited [2012] HCA 41, [11]-[13], [33]-[34].
Containers
Although perhaps less starkly so, similar observations apply in respect of the Containers element. It is, in our view, artificial to separate out and attribute a separate price for goods supplied in a container where the parties have not themselves done so and the container has no inherent value to the customer other than as a vessel for supply of the product. That is particularly so where, as a practical matter, the product, wine, is not able to be supplied other than in a container.
That conclusion is reinforced by contextual considerations found in the text of the wine tax legislation. In that regard, s 9-65 of the WET Act provides:
9‑65 Taxable dealing with wine that is the contents of a container
(1) This section deals with situations in which a *container is associated with wine (the contents) that is the subject of a *taxable dealing. The aim of this section is to ensure that the *taxable value will include a component for the container, even though the parties may have allocated a separate amount to the container.
(2) If:
(a) the *taxable value of the dealing is calculated by reference to the *price (excluding wine tax and *GST) for which the contents were sold; and
(b) the parties have allocated a separate amount to the *container;
then the taxable value is *increased by so much of the value of the container as is recouped by the seller in connection with the sale of the contents.
(3) If the *taxable value of the dealing is not calculated as mentioned in subsection (2), then the taxable value is *increased by so much of the value of the *container as could reasonably be expected to have been recouped by you in connection with a hypothetical sale of the contents at the time of the actual *taxable dealing with the contents.
The applicant’s submissions point out, and we accept, that s 9-65 has no direct application in this case as the parties to the sales did not allocate a separate amount to the container. However, subsection 9-65(1) plainly envisages the taxable value of wine will include a component for containers – it says so. In our view, that is a powerful contextual indicator that Parliament envisaged, in determining whether an amount of consideration was for the sale of wine, an amount related to the container in which the wine is sold would be included rather than separated out for different treatment. No other inference could reasonably be drawn from the inclusion of this provision. It is also consistent with policy expressed in the relevant explanatory memorandum.[20]
[20] Explanatory Memorandum to the A New Tax System (Wine Equalisation Tax) Bill 1998, [6.24].
Accordingly, as with amounts said to be attributable to the Goodwill element, we accept the Commissioner’s submission that, consistent with the EMI case, the Container element is part of the consideration required to be paid for the applicant’s purchasers to obtain title to the wine. As such, it forms part of the consideration for the sale of the wine.
Delivery
The question of whether the cost of delivery may be excluded from the taxable value where the customer pays a single price for wine delivered to their premises has previously been considered by this Tribunal. As Deputy President Frost noted in NZWINEIMPORTS Pty Ltd v Commissioner of Taxation, “[t]he only relevant supply is the supply of wine by the applicant to its customer, delivered to the customer’s nominated delivery address.”[21] The Deputy President expressly rejected a submission that the producer separately sold warehousing and transport services to the customer.
[21] [2016] AATA 824, [31].
Although it is not binding on us, we have not been able to identify any relevant distinction between the current matter and the NZWINEIMPORTS case, nor any flaw in the Deputy President’s reasoning. Although the taxpayer in that case sourced warehousing and freight from New Zealand from a related entity, that is not, in our view, a relevant distinction.
The approach in the NZWINEIMPORTS case is also consistent with the High Court’s reasoning in the EMI case that an amount required to paid by a purchaser to obtain title to goods is consideration for the sale of the goods and with the judgment of the High Court in Commonwealth Quarries (Footscray) Pty Ltd v Federal Commissioner of Taxation.[22]
[22] [1938] HCA 13.
In Commonwealth Quarries, the taxpayer sold metal screenings and other products to its customers delivered to a particular place for a single charge. The prices varied according to the localities to which the products were delivered. The issue for determination was whether the contract price for the delivered goods was, under the sales tax legislation then in force, “the amount for which those goods were sold”. The Court held, unanimously, the amount for which the goods were sold was the contract price for the delivered goods without any deduction for delivery costs.
Mr Meng sought to distinguish Commonwealth Quarries, in part on the basis that it was concerned with the original sales tax legislation which he submitted bore little resemblance in structure and wording to the WET legislation. That may be accepted but the concept of “the amount for which those goods were sold” is, in our view, directly analogous to and embraced within the definition of “consideration”. It is difficult to see how an amount for which goods are sold could not fall within that expansive definition.
Mr Meng also submitted that the High Court’s reasoning turned on the construction of the “amount” for which goods are sold and pointed to these observations in the EMI case:
The word “amount” of itself connotes a sum total to which items amount up. I hesitate to use either of the words “consideration” or “price”, because recently there has been some new academic analysis of the juristic concepts they express.[23]
[23] (1971) 45 ALJR 349, 353.
However, the extracted statements Windeyer J to which Mr Meng referred are immediately followed by his Honour observing:
It is enough to say that, as used in the Assessment Act, “the amount” for which a thing is sold means I consider the sum total of all moneys that the buyer promises, expressly or tacitly, to pay to, or for, the seller in order that he, the buyer, may get a good title to the goods that he has agreed to buy. In Commonwealth Quarries (Footscray) Pty Ltd v Federal Commissioner of Taxation (1938), 59 C.L.R. 111, Dixon and McTiernan JJ said (at p. 121) that the words “the amount for which the goods were sold” appeared “necessarily to mean the contract price”.[24]
[24] Ibid.
In our view, there can be little doubt that the contract price in the current case falls within the definition of consideration. It is what the customer pays “for” the wine and therefore is the consideration for the wine.
Mr Meng also noted that the sales tax legislation under consideration in Commonwealth Quarries contained no equivalent of the apportioning provided for by s 27-15. However, in our view, s 27-15 does not arise for consideration in this case because, on a proper consideration of the character of the relevant transactions, there is, for the reasons previously given in respect of the so-called Goodwill element, a single transaction for the sale of wine. In terms of s 27-15, there is no “need to know” how much of a global amount relates to some other element of the transaction because the transactions are properly characterised as sales of wine at a delivered price.
Accordingly, we are not persuaded an amount for delivery should be deducted from the sale price to determine the taxable value of the applicant’s wine.
Concluding observations – object of the WET legislation
The preceding discussion is sufficient to determine the outcome in this matter. However, we observe that our conclusions are also consistent with the object of the WET regime.
In the second reading speech introducing the bill for the WET Act, the Minister noted:
[T]he wine equalisation tax means that after the abolition of WST [wholesale sales tax] and its replacement with GST prices are equalised back to avoid dramatic and dislocating price falls.
Equalisation was considered to be necessary because, under the former sales tax regime, wine was taxed at a rate considerably higher than the 10% GST. Our conclusions mean that wine continues to be taxed under the WET Act on the same basis on which it was taxed under the former sales tax law.
In respect of the Delivery element, that is clear from the longstanding application of the principles in the Commonwealth Quarries case.
In respect of the Containers element, in CCA Beverages (Sydney) Pty Ltd v Federal Commissioner of Taxation,[25] the Full Federal Court was called upon to decide whether sales tax was payable on the full price payable for soft drinks by the customer or only in respect of an amount referable to the contents and not to the bottle. In holding the global price for the bottled soft drink attracted sales tax, the Court noted that the then applicable sales tax law, which continued to apply up until the introduction of GST from 1 July 2000, “clearly intended… to ensure that the taxable value of a container and contents will include a component for the container even where the parties have attributed separate prices to container and contents”.[26]
[25] 97 ATC 4213.
[26] Ibid, 4220.
We accept Mr Meng’s submission that the reasoning in CCA Beverages is not directly applicable to the WET Act because of differences in the legislative provisions for containers. Nevertheless, the decision confirms the position that prevailed under the sales tax law before the transition to GST: no separate amount would be allocated to containers and separated out from the taxable value.
In respect of the Goodwill element, there is no decision or other indication of the unlikely and artificial dissection urged upon us by the applicant having applied under the sales tax regime.
Contrary to equalisation of the taxation of wine, acceptance of the applicant’s submissions would involve a substantial departure from the position under the former sales tax law, as well as introducing considerable uncertainty into the calculation of WET.
disposition of the review
We have concluded the applicant’s submissions are not supported by the text of the legislation considered in its context and would be inconsistent with the object of the WET Act. The parties agreed that, if we decided these matters against the applicant, the appropriate course would be to affirm the Commissioner’s decision disallowing the applicant’s objection to the relevant assessments. It is therefore not necessary for us to consider the parties’ submissions regarding whether the applicant had proved the amounts that would, on the applicant’s view, have been deducted from the invoice prices to derive the taxable value of the applicant’s wine.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe and Senior Member Robert J Olding
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Associate
Dated: 30 August 2022
Date of hearing: 4 July 2022 Date final submissions received: 25 July 2022 Counsel for the Applicant: M Meng (direct brief) Counsel for the Respondent: R Minson Solicitors for the Respondent: ATO Litigation and Legal Services
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