The scheme: why is wholesaling defined in terms of controlled activity/ controlled liquor?
AWRS is designed to capture those businesses selling, offering or exposing or arranging a sale of nominally “duty paid” alcohol to other businesses for onward sale. The sale can be of any quantity, there is no minimum level. The definitions of controlled activity and controlled liquor were drafted in this way to:
- capture sales which are made on a duty paid basis but exclude sales which are made wholly within the duty suspension regime, in other words, where the purchaser will continue to store the products in duty suspension after purchase. Note, businesses responsible for bringing alcohol to a duty point and supplying to a customer outside the duty suspension regime may have to be approved as a wholesaler – they cannot assume that they do not need to be approved based on already having an excise registration or approval of any type to produce, store, hold or receive alcohol in duty suspension. For example, a brewer that is registered to produce and hold beer in duty suspension and then sells its products duty paid to other businesses for their re-sale will also need to apply for AWRS approval
- exclude from the scheme alcohol which does not carry a duty charge at the duty point, for example, denatured alcohol or duty free alcohol supplied to ships stores
- capture the full range of wholesale activities and not just the activity of making sales. This ensures businesses cannot use as a defence against AWRS penalties and offences that they have not actually made any sales if they have been involved in arranging/offering or exposing controlled liquor in circumstances which would lead to a wholesale sale . See section AWRS21200 for more information on arranging/offering or exposing for sale.
Regulation 9 of the WCLR 2015 makes it clear that a sale is to be treated as a sale of controlled liquor where the sale is made whilst the alcohol is still in duty suspension but the recipient of the goods takes delivery after the duty point. This was included in the secondary legislation to make sure there is no scope for manipulation of the time of sale to make it appear to be a sale in duty suspension. There may also be legitimate sales where the time of contract precedes the time of delivery of the goods but the goods are sold on a duty paid basis.
For example, where an owner of wine is storing products in an excise warehouse and arranges for the duty-paid delivery to a customer to occur after the time of sale, the sale should be treated the same way as if it had occurred at the excise duty-point and the wine owner would be required to be approved.
There are specific rules regarding sales in duty suspension which are covered In Excise Notice 197: receipt into and removal from an excise warehouse of excise goods.