ATO ID 2006/183: Definition of mead for the purposes of the A New Tax System (Wine Equalisation Tax) Act 1999
Date of decision: 21 March 2006
Business line: Indirect Tax

Issue
Can water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 in A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Decision
Yes. Water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose can be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 of the WET Act.

Facts
A manufacturer of mead uses various ingredients including water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose.

Reasons for decision
Summary: Mead is defined in section 31-6 of the WET Act as a beverage that contains more than 1.15% by volume of ethyl alcohol and: The A New Tax System (Wine Equalisation Tax) Regulations 2000 (the Regulations) specify that for the purposes of paragraph (c) of the above definition certain ingredients may be added to mead even though they give colour or flavour. The Regulations also specify when these ingredients may be added. The Regulations provide that: Water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose are not considered to give colour or flavour when added to mead. Accordingly, these ingredients may be added without affecting the ability of the beverage to satisfy the definition of mead. Each of these ingredients is considered below: Accordingly, water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose can be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 of the WET Act.

Legislative references: A New Tax System (Wine Equalisation Tax) Act 1999 section 31-1 section 31-6
Related public rulings and determinations: Wine Equalisation Tax Ruling WETR 2009/1 | Wine Equalisation Tax Ruling WETR 2009/2
Subject references: Alcohol Excise Mead Wine Wine equalisation tax