Private ruling: Product classification
Date of advice: 12 July 2018
Published: September 2018
Ruling period: 1 July 20xx to 30 June 20xx
Date scheme commenced: 1 July 20xx

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. 4. The product will have an alcoholic content greater than 8% but less than 22% 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 provides the meaning of ‘wine’ which includes ‘grape wine products’. Wine does not include beverages that do not contain more than 1.15% by volume of ethyl alcohol. | 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 grape 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, ethyl alcohol cannot be added to the product unless it is used only to extract flavours from vegetable matter, be essential to the extraction process and must not add more than one percentage point to the strength of alcohol by volume of the beverage. The flavouring which you are using contains ethyl alcohol which ordinarily would preclude the beverage from satisfying the definition of a grape wine product. However the ethyl alcohol used in the flavouring has been used solely for the purpose of extracting flavours from vegetable matter and the use of the ethyl alcohol is essential to the extraction process. The usage of the flavouring containing the ethyl alcohol does not add more than one percentage point to the strength of alcohol by volume of the beverage. As such it follows that the added flavouring does not preclude it from satisfying the definition of 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 greater than 8% abv and less than 22% abv which falls within the acceptable range. | 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 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.