Victorian liquor subsidy guidelines

Key information

The Victorian Government pays Victorian wine producers a subsidy on:

• certain retail sales (cellar door and mail-order sales)
• applications to own use of their own product.

The Victorian Government also pays a subsidy to wine makers or wholesalers for the sale of low alcohol wines.

The scheme provides a subsidy of:

• 15% of the notional sale price of cellar door and mail-order sales and applications to own use of wines made by Victorian wine producers, and
• 12% of the last wholesale price of low alcohol wine sales made by wine producers or wholesalers in Victoria.

The subsidy was introduced in 1997 to help Victorian wine producers manage the impact of Commonwealth tax changes. 

Subsidy payments are made under section 177(1) of the Liquor Control Reform Act 1998 (the Act). That section authorises the payment of amounts determined by the Treasurer to persons who hold, or have held, licences (whether granted under the law of Victoria or of another state or of a territory) relating to the sale of liquor for which taxes have been paid to the Commonwealth.

The Treasurer has statutory responsibility for payments and the statutory power to require information needed to make these payments. But the Commissioner of State Revenue is responsible for administering this scheme.

These guidelines set out:

• the basis on which a subsidy will be paid
• the obligations imposed on those claiming the subsidy. 

They should be read in conjunction with:

• the Commissioner’s Determination under section 179(1) of the Act 
• Liquor Subsidy Claim Form 01, which contains the Commissioner’s requirements as to the records that must be kept.

Licensing and tax requirements

In effect, section 177(1) establishes 2 broad statutory requirements:

• the claimant must hold or have held a liquor licence (the licensing requirement), and
• the claimant must have paid Commonwealth taxes (the tax requirement).

Licensing requirement

The licensing requirement ensures the Commissioner is satisfied the supply the subsidy is claimed for was duly authorised under a current Victorian licence.

In Victoria, sales or uses you may claim a subsidy for can occur under the following licences:

• A pre-retail licence, issued under section 12 of the Act.
• A producer’s licence, issued under section 13 of the Act.
• A limited licence, issued under section 14 of the Act.

When claiming a subsidy in relation to particular sales or uses, the licensee must identify the liquor licence(s) under which supply was authorised.

You should accompany your initial application with a copy of all relevant licences under which eligible sales or uses are claimed.

Tax requirement

The Victorian liquor subsidy assists once the relevant Commonwealth tax has been imposed, paid and rebated (if applicable). Therefore, the Victorian subsidy uses the Commonwealth tax framework to establish when a claim for the Victorian subsidy can first be made.

To learn more about wine equalisation tax (WET) and excise duty, refer to the Australian Tax Office’s (ATO) website:

• Wine equalisation tax.
• Excise on alcohol.
• Legislation rulings.

Refer to the Liquor Subsidy Claim Form 01 for:

• guidance on record-keeping requirements
• the information required from claimants.

The subsidy is intended to offset the price impact of WET or excise duty. WET and excise duty are 2 mutually exclusive Commonwealth taxes imposed on the sale of certain wine products and alcoholic beverages respectively. 

WET is imposed on wine sold for consumption in Australia. Excise duty is charged on goods (including certain types of alcoholic beverages) manufactured in Australia.

Wine that has an alcohol content of over 1.15% is subject to WET. Certain alcoholic beverages with an alcohol content of over 1.15% – such as beer, spirits and some fortified wines – are subject to excise duty.

As the subsidy is intended to offset the impact of Commonwealth taxes, do not claim:

• transactions that are WET-exempt, or 
• transactions on which WET is not charged.

Commonwealth producer rebate

Since October 2004, the Commonwealth has offered a rebate on WET to wine producers.

A wine producer (as defined under the WET legislation) is eligible for the Commonwealth producer rebate on eligible, rebatable sales on which WET has been or could be charged. 

The Commonwealth rebates:

• 29% of the wholesale price, or
• for retail sales and applications for the producer’s own use, 29% of the notional wholesale selling price. 

From 1 July 2026, the producer rebate is capped at $400,000. From 1 July 2018 until 30 June 2026, the rebate was capped at $350,000 per annum. Before 1 July 2018, the rebate was capped at $500,000 per annum.

For transactions on which WET has been paid, the subsidy is only available once the Commonwealth producer rebate has been exhausted.

An entity must have exhausted the Commonwealth producer rebate before making a claim on the Victorian subsidy. Do not claim the subsidy for a sale or use for which a Commonwealth rebate has already been claimed.

In some circumstances, a sale or use may be eligible for a subsidy in more than one state or territory. However, you can only make one claim per sale or use, regardless of which jurisdiction you make it in.

Do not claim the subsidy for a sale or use for which a subsidy has already been paid in Victoria or another jurisdiction.

Commonwealth Wine Tourism and Cellar Door Grant

On 2 December 2016, the Commonwealth announced the Wine Tourism and Cellar Door Grant. It is administered by Wine Australia and commenced on 1 July 2019.

Under the grant, eligible producers can access an annual grant of up to $100,000 (excluding GST) for their eligible rebatable domestic cellar door sales. Total funding under the grant is capped at $10 million each financial year.

If a producer has a shortfall under the Wine Australia Grant (i.e. they receive less than the amount of eligible transactions claimed), they are still eligible under the Victorian Liquor Subsidy for the shortfall only.

Additional requirements

The recipient of a subsidy must also comply with invoicing and record-keeping requirements.

Invoicing requirement

The Victorian Government requires subsidy recipients to acknowledge the subsidy on their invoices. The Liquor Subsidy Claim Form 01 sets out how to make this acknowledgement.

Record-keeping requirements

Applicants must provide information to determine claims for payment and produce any document required for that purpose (section 178(1)). Refer to the Liquor Subsidy Claim Form 01 to see the information required.

It is an offence under section 178(2) for an individual or body corporate to give information or produce any document that is false or misleading. The statutory penalty is:

• 500 penalty units for a body corporate
• 100 penalty units for an individual.

Under section 179, the Commissioner is authorised to determine the class of persons who must make a record of sales and purchases of liquor.

The Commissioner’s Determination requires all subsidy recipients to make and keep records of sales and purchases. You must keep these records for 5 years, unless the Commissioner authorises their destruction earlier.

It is an offence under section 179(3) of the Act for an individual or body corporate to:

• fail to make or keep a record as required, or
• include in it any information that is false or misleading.

The statutory penalty is:

• 500 penalty units for a body corporate
• 100 penalty units for an individual.

The Commissioner is responsible for setting the details and form that these records should take. These requirements are set out in the Liquor Subsidy Claim Form 01.

Special circumstances

You may submit a claim to the Commissioner if you:

• do not satisfy all the requirements set out in these guidelines, but 
• believe you should receive a subsidy for sales on which WET or excise has been paid.

You must outline:

• the basis for your claim, and
• why you failed to meet the requirements set out in these guidelines.