Private ruling: Classification of wine based products
Date of advice: 22 June 2016
Published: August 2016
Ruling period: June 20XX -June 20YY
Date scheme commenced: June 20XX

Ruling: Q1: Does Product 1 satisfy the definition of "grape wine product" under section 31-3 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)? | A1: Yes | Q2: Does Product 2 satisfy the definition of a "fruit wine" under section 31-4 of the WET Act? | A2: Yes

Relevant facts and circumstances: 1. You are registered for Goods and Services Tax (GST). 2. Each product will contain a grape wine base, which will comprise at least 70% of the end product and will not be processed to remove any colour, flavour or aroma. 3. Product 1 will contain other ingredients. 4. The other ingredients will not contain ethyl alcohol. 5. Product 2 will comprise fermented fruit juice in addition to the grape wine base.

Relevant legislative provisions: A New Tax System (Wine Equalisation Tax) Act 1999 Subdivision 31-A, | A New Tax System (Wine Equalisation Tax) Act 1999 Subsection 31-3 and | A New Tax System (Wine Equalisation Tax) Act 1999 Subsection 31-4.

Reasons for decision: Summary: 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 the WET Regulations. A grape wine product, taking into account the requirements of both the WET Act and the 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. Contains at least 700 millilitres of grape wine per litre Grape wine, taking into account both Section 31-2 of the WET Act and WET Regulation 31-2.01, 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. It does not cease to be a grape wine where grape spirit, brandy or both grape spirit and brandy have been added. The grape wine you intend to use in the product meets the definition of grape wine under s31-2 of the WET Act and section 31-2.01 of the WET Regulations. Further, the product will contain at least 70% grape wine. Therefore, the requirement that the beverage must contain at least 700ml grape wine per litre is met. Has not had added to it, at any time, any ethyl alcohol from any other source In addition to the grape wine, the product will contain fresh fruit juice and may also contain natural fruit flavours and spices (as outlined above). None of the natural fruit flavours or spices contain ethyl alcohol. Contains at least 8% by volume of ethyl alcohol, but not more than 22% by volume of ethyl alcohol The product will contain between 8% and 10% ABV of ethyl alcohol. This falls within the acceptable range for a grape wine product. Has not had added to it the flavour of any alcoholic beverage (other than wine), whether the flavour is natural or artificial. Your product contains grape wine base and other ingredients. The requirement that the flavour of an alcoholic beverage must not be added is broad and includes the addition of the flavour of an alcoholic beverage on its own, as well as the addition of number of flavours that combine to produce the flavour of an alcoholic beverage (ATO Interpretative Decision 2011/5). Therefore, alcoholic beverages that contain flavours such that the beverage mimics a spirit based product or beverage, will not meet the definition of grape product. Your product does not contain the flavour of an alcoholic beverage other than wine and is considered to be a wine based product. Fruit or vegetable wine is defined in section 31-4 of the WET Act. It is also subject to certain requirements as specified in regulation 31-4.01 of the WET Regulations. A fruit or vegetable wine, taking into account the requirements of both the WET Act and the WET Regulations, is a beverage that: a) is the product of the complete or partial fermentation of the juice or must of: i. fruit or vegetables; or ii. products derived solely from fruit or vegetables; and b) has not had added to it, at any time, any ethyl alcohol from any other source except from grape spirit or neutral spirit in which case the resulting product must contain at least 15% and not more than 22% ABV; and c) has not had added to it, at any time, any liquor or substance that gives colour or flavour; and d) contains at least 8% but not more than 22% ABV or ethyl alcohol. Your product will contain grape wine and the fermented juice of fruit (other than grapes). Taking into account the provisions of s31-2 of the WET Act and regulation 31.2.01 of the WET Regulations, grape wine 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) does not contain more than 22% ABV of ethyl alcohol. As your product will be the product of fermentation of both grapes (being a fruit) and other fruit, it is therefore considered to be the product of the complete or partial fermentation of the juice or must of fruit or vegetables. You are not adding ethyl alcohol from any other source, nor are you adding any liquor or substance that gives colour or flavour. The final alcohol content will be between 8% and 10% ABV of ethyl alcohol and therefore falls within the acceptable range for a fruit and vegetable wine. Based on the above factors, we consider your product is a fruit or vegetable wine under s31-4 of the WET Act.