Private ruling: Wine equalisation tax (WET) - Classification of fruit or vegetable wine
Published: December 2013

Ruling: Q1: Is your product a 'fruit or vegetable wine' for the purposes of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)? | A1: Yes, your product is a 'fruit or vegetable wine' for the purposes of the WET Act.

Relevant facts and circumstances: · You are registered for goods and services tax (GST) and WET. · Your product is fermented resulting in a wine with an alcoholic content % alcohol by volume (ABV). · You plan to blend your product with a product. · Your blended product will then be carbonated. · No flavours or colours will be added. · No alcohol will be added. · Your product will have a final alcoholic level of x% ABV. · You have provided details of the production process and specifications including juice production, blending, filtration and carbonation. · You have provided a production specification for your product.

Relevant legislative provisions: A New Tax System (Wine Equalisation Tax) Act 1999 - Division 31 | A New Tax System (Wine Equalisation Tax) Act 1999 - subdivision 31-A | A New Tax System (Wine Equalisation Tax) Act 1999 - section 31-1 | A New Tax System (Wine Equalisation Tax) Act 1999 - section 31-4 | A New Tax System (Wine Equalisation Tax) Regulations 2000 subregulation 31-4.01.

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 31-1of the WET Act states 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. Each of the above headings is further defined in the WET Act. Having regard to these definitions, your product falls for consideration as a fruit or vegetable wine under section 31-4 of the WET Act and the requirements specified in regulation 31-4.01 of the A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations). Taking into account the requirements of both the WET Act and the WET Regulations, a fruit or vegetable wine is a beverage that: · is the product of the complete or partial fermentation of the juice or must of: a) fruit or vegetables; or b) products derived solely from fruit or vegetables; and · has not had added any ethyl alcohol from any other source, except grape spirit or neutral spirit, as specified in the WET Regulations; and · has not had added any liquor or substance that gives colour or flavour (other than grape spirit or neutral spirit as specified in the WET Regulations); and · contains between 8% and 22% (inclusive) of ethyl alcohol by volume or if grape spirit or neutral spirit has been added, contains between 15% and 22% (inclusive) of ethyl alcohol by volume as specified by the WET Regulations. In order for us to determine whether your product is a fruit or vegetable wine for the purposes of the WET Act and the WET Regulations, we need to consider whether your product meets the requirements listed above. One of the first processes in the manufacture of your product is the fermentation of the juice. The juice is a product derived solely from fruit. The fermentation process results in an alcoholic beverage of x% ABV, satisfying the section 31-4 that the product is of the complete or partial fermentation of the fruit juice. You have indicated that no alcohol is added and no additional colour or flavour has been included in the manufacture of your product. The only substance added to the fermented juice is the product derived from juice. We need to consider whether the addition of the product the addition of a 'substance that gives colour or flavour'. On the basis that the sole purpose of adding the product is to increase or enhance the sweetness of your product, it is accepted that it does not give flavour. It is also accepted that the product does not give colour to the end product. Additionally, the process is an accepted winemaking process and will not preclude your product from being considered to be fruit or vegetable wine for the purposes of the WET Act. The final alcoholic level of your product would be x% ABV. According to the information provided, your product meets the definition of fruit or vegetable wine for the purposes of the WET Act.