Private ruling: Grape wine
Date of advice: 17 January 2019
Published: April 2019
Ruling period: 17 January 20XX to 16 January 20XX
Date scheme commenced: 17 January 20XX

Ruling: Q1: Does your product meet the definition of “grape wine” as defined in section 31-2 of A New Tax System (Wine Equalisation Tax) Act 1999 ? | A1: Yes

Relevant facts and circumstances: 1. You intend to manufacture a beverage as specified in paragraphs 2 to 9 below (your beverage). 2. 100% fresh grapes will be crushed into grape juice. No other ingredients will be added to or other processes undertaken to this grape juice. 3. The grape juice will be subject to evaporation by heat treatment until it becomes a concentrated juice solution. No other ingredients will be added or other processes undertaken. The resulting product from this evaporation process will be referred to as grape juice concentrate. 4. The grape juice concentrate will be placed in cold storage until needed. 5. As part of the fermentation process the following processes will occur: a. Grape juice concentrate will be added to water. b. Yeast and other ingredients will be added to convert the natural grape sugars into alcohol. The product resulting from fermentation will be referred to as fermented grape concentrate. 6. Following fermentation, the fermented grape concentrate will be filtered. 7. Neutral grape spirit will then be used to fortify the product until it has reached an alcoholic strength of 11.5% abv. 8. No other ingredients will be added to or processes undertaken on the product following fortification. 9. The final beverage will have an alcoholic content of 11.5% abv.

Relevant legislative provisions: Section 31-2 of A New Tax System (Wine Equalisation Tax) Act 1999 | Regulation 31-2.01 of A New Tax System (Wine Equalisation Tax) Regulations 2000

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 provides the meaning of ‘wine’, which includes ‘grape wine’. Wine does not include beverages that do not contain more than 1.15% by volume of ethyl alcohol. | Detailed Reasoning - Grape wine: The definition of ‘grape wine’ is contained in section 31-2 of the WET Act . The meaning of grape wine states that ‘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) complies with any requirements of the regulations, made for the purposes of section 31-8, relating to grape wine. Subsection 31-2(2) states that a beverage does not cease to be the product of the complete or partial fermentation of fresh grapes or products derived solely from fresh grapes merely because grape spirit, brandy, or both grape spirit and brandy, have been added to it. Paragraph 31-2(1)(b) refers to the requirements of the regulations which can be found in Regulation 31-2.01 of A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations). This Regulation stipulates that ‘grape wine’ must not contain more than 22% by volume of ethyl alcohol. | Detailed Reasoning - Beverage: Per paragraphs 40 and 41 of Wine Equalisation Tax Ruling 2009/1 Wine equalisation tax: the operation of the wine equalisation tax system (WETR 2009/1), when determining whether a beverage is ‘wine’, consideration should be given to the finished product intended and suitable for consumption, and not the liquid that exists during the stages of production (i.e. consideration should be given to the finished wine and not to the raw wine). Your product will undergo various stages of production before the final product intended for consumption is produced. When considering whether your product is a ‘grape wine’, the product definition explained below has only been applied to your final product and not to the various forms of raw wine (e.g. grape juice, grape juice concentrate, and fermented grape concentrate) that exist during production. We consider that your finished product is a beverage, as it is a drink which can be consumed through a glass in accordance with paragraphs 38 and 38A of WETR 2009/1. | Detailed Reasoning - Product of the complete or partial fermentation of fresh grapes or products derived solely from fresh grapes: The main ingredient to be fermented in your product is grape juice concentrate. The grape juice concentrate used in your product will be produced through the evaporation of grape juice, which will be made from 100% fresh grapes with no other ingredients added. The grape juice concentrate will then be reconstituted using water. Whilst yeast and other ingredients will be added to convert the natural grape sugars into alcohol, these substances are merely processing aids and additives, and do not prevent your product from being regarded as the product of the complete or partial fermentation of products derived solely from fresh grapes. Based on this, your product will satisfy this element of the definition. | Detailed Reasoning - Contains no more than 22% by volume of ethyl alcohol: The final alcoholic strength of the product will be 11.5% abv, therefore your product will fall within the acceptable range for a grape wine. | Detailed Reasoning - Addition of grape spirit: Your product will be fortified using a neutral grape spirit. As the definition of a grape wine allows for the addition of grape spirit, your product will still comply with this aspect of the definition of grape wine. | Detailed Reasoning - Conclusion: Based on the above, your product will satisfy all the relevant paragraphs within the definition of ‘grape wine’ in section 31-2 of the WET Act and regulation 31-2.01 in the WET Regulations. Therefore, your product will be considered a ‘grape wine’.