Duty Free Alcohol Rip off

[opusman]

I've always wondered how a GST can be levied on duty. That's also applying a tax on a tax, which I was under the impression is illegal in Australia.

GST is a very special tax in that regard. It's levied on WET as well (and on other things, like fuel excise).

 

[JohnK]

2 bottles x 1L Smirnoff vodka for ~$50. Not going to get that at Dan's.

 

[medhead]

I've always wondered how a GST can be levied on duty. That's also applying a tax on a tax, which I was under the impression is illegal in Australia.

GST seems to be applied on the excise.

GST is a very special tax in that regard. It's levied on WET as well (and on other things, like fuel excise).

Insurance stamp duty is another one that is GST'ed.

 

[Renato1]

Very similar experiences in Spain, UK and Germany in the last 18 months. Fortunately you can search so many sites online so it isn't that hard to work out what is a bargain and what isn't, based on where you may be travelling.

Thanks. Though I thought alcohol prices in Bavaria were a tad higher than in Italy last year.

Though with the excise on a 700ml bottle of 37% alcohol spirit being nearly $21, and on a 43% alchohol spirit being nearly $24.50, when one sees sales here of say three bottles for $90 - then the retailers really aren't making very much money per bottle.
Regards,
Renato

 

[marki]

2 bottles x 1L Smirnoff vodka for ~$50. Not going to get that at Dan's.

Whereabouts is this deal .... I don't drink much( hiccup)

 

[JohnK]

Whereabouts is this deal .... I don't drink much( hiccup)

Could be BNE duty free or even SYD.

 

[Boca68]

That doesn't sound correct.

Section 4.3.1 of this guide specifically says that on airport duty free shops can seek good Duty and GST/WET free to travellers.


https://www.border.gov.au/Legacyrewritepages/Documents/duty-freeshopoperatorsguide2014-may14.pdf

You are correct medhead, it doesn't sound correct, but it is.

One of the lovely quirks of Australian (read Federal) Liquor laws. As any traveller departing Australia, you are eligible for duty free shopping. But under the Liqour laws, excise is excluded for Australians. SO, consequently, all duty free prices are displayed including the excise. As a foriegner, you are entitled to claim that excise back under the TRS. But, of course, it is not well advertised.

Australian citizens, are unable to claim the excise back. So, under the duty free laws you still pay the excise. (there are some circumstances were the WET is excluded, but I'm totally up to date on that). The prices in any australian duty free outlet, only exclude the GST. (which is a tax on a tax, I know. But welcome to Canberra beauracracy)

 

[marki]

So after buying a good bottle of red say 100 dollars worth I need to take it to Back to the start and stand in a queue for TRS? Assuming a non Aussie passport ?

 

[Deleted member 29185]

You are correct medhead, it doesn't sound correct, but it is.

Australian citizens, are unable to claim the excise back. So, under the duty free laws you still pay the excise. (there are some circumstances were the WET is excluded, but I'm totally up to date on that). The prices in any australian duty free outlet, only exclude the GST. (which is a tax on a tax, I know. But welcome to Canberra beauracracy)

So why then, do we see some duty free grog effectively half the Dan Murphy price?

 

[JohnK]

Whereabouts is this deal .... I don't drink much( hiccup)

Plenty of 2 for $50 at SYD yesterday.

 

[medhead]

You are correct medhead, it doesn't sound correct, but it is.

One of the lovely quirks of Australian (read Federal) Liquor laws. As any traveller departing Australia, you are eligible for duty free shopping. But under the Liqour laws, excise is excluded for Australians. SO, consequently, all duty free prices are displayed including the excise. As a foriegner, you are entitled to claim that excise back under the TRS. But, of course, it is not well advertised.

Australian citizens, are unable to claim the excise back. So, under the duty free laws you still pay the excise. (there are some circumstances were the WET is excluded, but I'm totally up to date on that). The prices in any australian duty free outlet, only exclude the GST. (which is a tax on a tax, I know. But welcome to Canberra beauracracy)

I note that the border force guideline that I linked does not make a distinction on the basis of nationality. Airport duty free shops can sell excise free to all travellers.

I also will repeat the example of buying 3 litres at the airport on departing Australia. If I return to Australia with those 3 litres of booze Border force will seek to charge me excise. They can't do that if I have already paid excise. There seems to be a fundamental contradiction. Perhaps you can quote the legislation to add clarity.

 

[Mattg]

I had VAT/GST charged on "duty-free" purchases at ATH. When I questioned it, I was told that duty free was just the name of the shop!

In terms of duty-free alcohol bargains, I've found South Africa to be the cheapest. The duty-free alcohol at JNB seemed to be around half the price you would pay in Australia. (No wonder there was so much duty-free waiting to be collected at the gate during boarding for QF64!)

 

[Gold Member]

I had VAT/GST charged on "duty-free" purchases at ATH. When I questioned it, I was told that duty free was just the name of the shop!

ROFLMFAO! Typical...

 

[Boca68]

I note that the border force guideline that I linked does not make a distinction on the basis of nationality. Airport duty free shops can sell excise free to all travellers.

I also will repeat the example of buying 3 litres at the airport on departing Australia. If I return to Australia with those 3 litres of booze Border force will seek to charge me excise. They can't do that if I have already paid excise. There seems to be a fundamental contradiction. Perhaps you can quote the legislation to add clarity.

To be clear, I don't think there is a specific legislation regarding duty free excise. But you have to remember that 90%+ spirits are imported to Australia. Some notable exceptions, but in general most are imported. Therefore , under the ATO excise laws, the excise is applied at importation. You cannot import solely to sell duty free. That, I know. Now, for some of the exemptions, (Bundaberg Distilleries is the one I'm thinking of), again the excise is applied at the wholesale level. Again the duty free retailer would not be able to access a non-excised product.

So, the excise is already applied before it gets into the Duty free store. The WET is not an excise, so not eligble for duty free status.

As for your example of purchasing 3 litres prior to departure and returning with them. The proviso under duty free status, is that the product, will not be returning to Australia. (Read, not returning in a re-sale state) in theory. So, customs upon your return, don't care where you bought it or how much you paid, in thier eyes you are importing excess of the duty free limit.

Hope it helps a little in understanding.

P.S.- forgot to mention about the TRS. As a foriegner, you are eligble to claim the excise, but with limitations. (think its $300 min and various other things) Plus its time consuming and is most common want of a traveller, limited time. Some do, but not that many as its not really advertised on a Punt Road Billboard

 

[Deleted member 29185]

under the ATO excise laws, the excise is applied at importation. You cannot import solely to sell duty free. That, I know. Now, for some of the exemptions, (Bundaberg Distilleries is the one I'm thinking of), again the excise is applied at the wholesale level. Again the duty free retailer would not be able to access a non-excised product.

That doesn't explain why a duty free shop can sell some spirits (I'm specifically thinking Bombay Safire) for 1/2 of the Dan Murphy price. Excise free is the only logical answer in my mind.

 

[Boca68]

That doesn't explain why a duty free shop can sell some spirits (I'm specifically thinking Bombay Safire) for 1/2 of the Dan Murphy price. Excise free is the only logical answer in my mind.

I would like you to get me some price quotes on this (in Australia, of course)

The only possible reason I could think of would be a Loss leader category. But even then, I'd seriously doubt 1/2 price.

Quick search. Bombay Sapphire 1lt Duty free best price $37.95 vs Dans $45.95. Cheapest retail was actually $38.99 . So Dans might match that? Certainly not 1/2 price.

So, take out 10% GST, its about what I would expect

swanning_it, if you can find me Bombay Sapphire 1lt for under $25 in Oz, you are the shoppin god! I think I'd be safe with with under $30 to be frank. Or Bob, Jim and James.

 

[Deleted member 29185]

I would like you to get me some price quotes on this (in Australia, of course)

Quick search. Bombay Sapphire 1lt Duty free best price $37.95 vs Dans $45.95.

You have to compare apples with apples. I just did a Dan search and the $45 (or so) price that you've quoted was for 700ml. 1L on Dans on-line (similar to my local) is circa $69. I buy it from JR duty free (CNS) for $65 for 2 x 1L and I believe that just went up. I'm sure I was paying $63 for the twin pack but then again, I'm sure Dans price was around $65 not $69 so it looks like Bombay has had a price rise.

 

[knasty]

Sales from outbound duty free and inbound duty free stores are free of both excise duty and GST. The link Medhead sent earlier is quite comprehensive, but for anyone interested here's an even more comprehensive guidance from the ATO including the legislative links and license application links.

01 INTRODUCTION

Duty free stores are Customs bonded warehouses and Excise storage warehouses. This means they can import product duty suspended, and/or acquire goods from local manufacturer's Excsie manufacturing warehouse under a duty suspended movement permission.

 

[FirstClass]

Can anyone REALLY be bothered lugging around booze bottles of all things on their way to or from a flight?
The garish obstacle courses presented by airport duty free stores and the wheedling parasites lurking amongst them are so utterly repellent that I wouldn't take their offerings if they were free of charge with a $100 bill taped to each one.

 

[opusman]

I noticed yesterday that at SIN they have Hennessey Paradis for around $1100. This retails for over $3k in Australia. So there are some bargains around!