Distillers deal with two taxes that are easy to confuse: excise and GST. They're calculated differently and at different points.
Excise
- A commodity tax on the alcohol you produce
- Calculated on litres of pure alcohol (LAL), not price
- Triggered when spirit is entered for home consumption
- Reduced by the remission scheme up to $350,000/year
GST
- A 10% tax on the value of a sale
- Calculated on the sale price, not alcohol content
- Reported on your Business Activity Statement (BAS)
A simple example
You sell a bottle for $88 including GST:
- GST component ≈ $8 (one-eleventh of the price)
- Excise was already calculated separately on the LAL in that bottle when it was entered for home consumption
The key point: excise is about how much alcohol, GST is about how much money. Good software keeps them separate — see the inventory and excise guides.
This article is general information, not tax or legal advice. Confirm your obligations with the ATO or a qualified adviser.
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