Private ruling: Product Classification
Date of advice: 15 February 2018
Published: April 2018

Ruling: Q1: Does your product, ‘meet the definition of ‘grape wine product’ as defined in section 31-3 of the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act)? | A1: Yes, your product meets the definition of ‘grape wine product’ as defined in section 31-3 of the WET Act.

Relevant facts and circumstances: 1. You plan to manufacture an alcoholic beverage and have provided details of the ingredients. 2. The product will contain more than 700 millilitres per litre of grape wine, which has not undergone any additional processing to remove its natural wine characteristics. 3. The product will contain flavouring and natural colouring, neither of which will contain ethyl alcohol. 4. The product will have an alcoholic content of 8.5% alcohol by volume (abv).

Relevant legislative provisions: A New Tax System (Wine Equalisation Tax) Act 1999 Subdivision 31-A | A New Tax System (Wine Equalisation Tax) Regulations 2000 Subdivision 31-A

Reasons for decision: Summary: ‘Wine’ is defined in section 33-1 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) as having the meaning given by Subdivision 31-A of the WET Act. Section 31-1 in Subdivision 31-A of the WET Act provides that wine means any of the following: ● grape wine; ● grape wine products; ● fruit or vegetable wine; ● cider or perry; ● mead; ● sake. However, wine does not include beverages that do not contain more than 1.15% by volume of ethyl alcohol. All of the beverages set out above are separately defined for the purposes of the WET Act and, of these definitions, ‘grape wine product’ is the only one that is relevant in your circumstances. | Detailed Reasoning - Grape Wine Product: ‘Grape wine product’ is defined in section 31-3 of the WET Act. It is also subject to certain requirements as specified in regulation 31-3.01 of A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations). A grape wine product, taking into account the requirements of both the WET Act and WET Regulations, is a beverage that: a) contains at least 700 millilitres of grape wine per litre; and b) has not had added to it, at any time, any ethyl alcohol from any other source, except: i. grape spirit; or ii. alcohol used in preparing vegetable extracts (including spices, herbs and grasses); and c) contains at least 8% by volume of ethyl alcohol, but not more than 22% by volume of ethyl alcohol; and d) has not had added to it the flavour of any alcoholic beverage (other than wine), whether the flavour is natural or artificial. | Detailed Reasoning - Contains at least 700 millilitres of grape wine per litre: Grape wine, taking into account both section 31-2 of the WET Act and regulation 31-2.01 of the WET Regulations, is a beverage that: a) is the product of the complete or partial fermentation of fresh grapes or products derived solely from fresh grapes; and b) contains not more than 22% by volume of ethyl alcohol. A product does not cease to be a grape wine merely because grape spirit, brandy or both grape spirit and brandy have been added to it. The wine which forms the base of the product meets the definition of grape wine in section 31-2 of the WET Act and regulation 31-2.01 of the WET Regulations. The wine will not undergo additional processing to remove its wine characteristics. The product will contain more than 700 millilitres per litre of grape wine, therefore this criteria is satisfied. | Detailed Reasoning - Has not had added to it, at any time, any ethyl alcohol from any other source: From the definition of grape wine product, it is evident that ethyl alcohol (other than ethyl alcohol derived from grape spirit or ethyl alcohol used in preparing vegetable extracts) is the only alcohol which, when added to a beverage, precludes the beverage from satisfying the requirements for a grape wine product. The flavouring intended to be used in the product contains a certain chemical compound as a carrying agent for the flavour. That chemical compound has a different chemical formula to ethyl alcohol. As such it follows that that compound may be added to a beverage without the beverage being precluded from satisfying the definition of grape wine product. Given the neither the flavour extract nor the colouring contains ethyl alcohol; this product meets the criterion for a grape wine product. | Detailed Reasoning - Contains at least 8% by volume of ethyl alcohol, but not more than 22% by volume of ethyl alcohol: The final alcohol strength of the product will be 8.5% abv. This falls within the acceptable range for a grape wine product. | Detailed Reasoning - Has not had added to it the flavour of any alcoholic beverage (other than wine), whether the flavour is natural or artificial: Subregulation 31-3.01(2) of the WET Regulations requires that a grape wine product must not have added to it the flavour of any alcoholic beverage (other than wine), whether that added flavour is natural or artificial. It is the Commissioner’s view that the preclusion of the addition of the ‘flavour of an alcoholic beverage’ includes more than one added flavour that, when combined together, is the flavour of an alcoholic beverage (other than wine) whether such flavours are natural or artificial. The formula you provided shows the only ingredients in your product are wine, sugar, water, natural colouring and flavouring. None of these ingredients, individually or combined, would be considered to be the flavour of an alcoholic beverage (other than wine). Therefore, this condition is satisfied.