Chapter 10 - Wine
| This document has been archived. It is current only to 30 June 2006. |
Section 1 Introduction
1.1 Acronyms used in this chapter
GST
Goods and Services Tax
RTD
Ready-to-drink beverage
WET
Wine equalisation tax
1.2 Appendices at the end of this chapter
Appendix: 10.1 WET product definitions
1.3 Foreword
If you want to know more about Excise, go to our website at
www.ato.gov.au
.
Section 2 Overview
The WET Act introduced a tax on assessable dealings and importations of wine made on or after 1 July 2000. The tax on wine is referred to as the wine tax or the wine equalisation tax (WET). The wine tax replaced the wholesale sales tax that applied to wine and similar alcoholic beverages prior to 1 July 2000 and was intended to keep the price of wine stable following the introduction of the goods and services tax (GST)
1
.
Fact sheets dealing with WET may be found on the
Excise website
.
The wine equalisation tax ruling
WETR 2004/1
explains how the wine tax operates and which alcoholic products are covered by WET.
Locally produced alcoholic products with an alcohol content of more than 1.15% by volume of ethyl alcohol which do not meet the WET definitions are subject to excise duty. Locally produced designer drinks and pre-mixed alcoholic products commonly referred to as ready-to-drink (RTD) products do not usually fall within the definition of WET products and as such, are subject to excise duty.
WET product definitions are shown at Appendix: 10.1.
APPENDIX: 10.1 WET product definitions
Wine equalisation tax
Set out below are the definitions of alcoholic products for the purposes of the WET Act. The definitions incorporate the requirements of the regulations set out in the
A New Tax System (Wine Equalisation Tax) Regulations 2000
. The wine equalisation tax applies to alcoholic products which satisfy the definitions and contain more than 1.15% by volume of ethyl alcohol
2
. Some examples of products that satisfy the various definitions, and products that do not, are provided. The examples are only covered by the definitions where they meet the requirements in the column on the left. Alcoholic products containing more than 1.15% by volume of ethyl alcohol not covered by the wine equalisation tax are subject to the excise duty regime.
| Definitions | Examples |
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Grape wine
Grape wine is a beverage that:
- is the product of the complete or partial fermentation of fresh grapes or products derived solely from fresh grapes
;
and
- does not contain more than 22% of ethyl alcohol by volume.
NB.
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.
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Grape wine includes:
- table wines (red, white and rose);
- sparkling wines;
- fortified wines; and
- dessert wines.
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Grape wine products
A grape wine product is a beverage that
:
- contains at least 70% grape wine
;
- has not had added any ethyl alcohol from any other source, except grape spirit or alcohol used in preparing vegetable extracts (including spices, herbs and grasses) e.g. in producing vermouth; and
- contains between 8% and 22% (inclusive) of ethyl alcohol by volume
.
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Grape wine products are generally traditional products that have been produced by the wine industry for many years. They include:
- vermouth;
- marsala;
- green ginger wine (except green ginger wine with spirits such as scotch added);
- wine based cocktails and creams that satisfy the requirements in the column on the left; and
- imitation spirits (wine based).
Grape wine products do not include:
- wine coolers (unless they satisfy the requirements in the column on the left);
- ready to drink (RTDs) or designer drinks that contain a wine base (unless they satisfy the requirements in the column on the left);
- RTDs or designer drinks that contain spirits (other than grape spirit). RTDs or designer drinks containing grape spirit must also satisfy the requirements in the column on the left in order to be included; and
- spirit based (other than grape spirit) cocktails, creams and liqueurs.
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Fruit or vegetable wine
Fruit or vegetable wine is a beverage that
:
- is the product of the complete or partial fermentation of the juice or must of fruit or vegetables, or products derived solely from fruit or vegetables
;
- has not had added any ethyl alcohol from any other source except grape spirit or neutral spirit
;
- has not had added any liquor or substance that gives colour or flavour (other than grape spirit or neutral spirit); 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 (NB grape spirit or neutral spirit can only be added if the beverage meets the definition of fruit or vegetable wine before the spirit is added).
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Fruit or vegetable wines include:
- table wine;
- sparkling wine; and
- fortified wine.
Fruit or vegetable wines do not include:
- ready to drink (RTDs) or designer drinks that may contain alcohol fermented from fruits such as lemons, oranges etc. (unless they satisfy the requirements in the column on the left).
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Cider and Perry
Cider or Perry is a beverage that
:
- is the product of the complete or partial fermentation of the juice or must of apples or pears
;
- has not had added any ethyl alcohol from any other source; and
- has not had added any liquor or substance (other than water or the juice or must of apples or pears) that gives colour or flavour
.
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Cider and Perry include:
- traditional cider and perry;
- draught cider and perry;
- dry cider and perry; and
- sweet cider and perry.
Cider and perry do not include:
- cider or perry that has had lemon, black currant or other fruit flavourings added; and
- cider or perry that has had cola or other flavourings added.
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Mead
Up to and including 8 June 2005, mead is defined for WET purposes as a beverage that
:
- is the product of the complete or partial fermentation of honey
;
- has not had added any ethyl alcohol from any other source, except grape spirit or neutral spirit
;
- has not had added any liquor or substance (other than honey, grape spirit or neutral spirit) that gives colour or flavour; and
- if grape spirit or neutral spirit has been added contains between 15% and 22
% (
inclusive) of ethyl alcohol by volume
.
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Mead includes:
- honey mead;
- fortified mead; and
- liqueur mead.
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Mead
From 9 June 2005, mead is defined for WET purposes as a beverage that
:
- is the product of the complete or partial fermentation of honey
;
- has not had added any ethyl alcohol from any other source, except grape spirit or neutral spirit
;
- has not had added any liquor or substance that gives colour or flavour other than
:
- grape spirit or neutral spirit
;
- honey, herbs and spices, all of which can be added at any time
;
- caramel, provided it is added after the fermentation process is complete
;
- fruit or product derived entirely from fruit, provided
:
- the fruit or product has not been fermented
;
- the fruit or product is added to the mead before fermentation of the mead
;
- after the addition of the fruit or product and before fermentation the mead contains not less than 14% by volume of honey and not more than 30% by volume of the fruit or product
;
- if fruit or product is added the mead contains between 8% and 22
% (
inclusive) of ethyl alcohol by volume; and
- if grape spirit or neutral spirit has been added contains between 15% and 22
% (
inclusive) of ethyl alcohol by volume. However, grape spirit or neutral spirit can only be added if the beverage meets the definition of mead before the grape spirit or neutral spirit is added
.
Note
-
If fruit or product derived from fruit is added and it contains concentrated fruit juice or fruit pulp, the proportion of fruit or product in the mead is worked out by assuming that it has been reconstituted according to the recommendations of the manufacturer of the concentrated fruit juice or pulp
.
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Mead includes:
- honey mead;
- fortified mead;
- liqueur mead; and
- spiced mead.
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Sake
Sake is a beverage that
:
- is the product of the complete or partial fermentation of rice
;
- has not had added any ethyl alcohol from any other source; and
- has not had added any liquor or substance that gives colour or flavour
.
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Sake includes:
- fermented sake; and
- rice wine.
Distilled sake does not satisfy the definition and is not included.
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1 Explanatory memorandum to A New Tax System (wine equalisation tax) Bill 1999 at page 1.
2 Subdivision 31-A WET Act.
3 Section 31-2 WET Act
4 Regulation 31-2.01 WET Regulations
5 Section 31-3 WET Act
6 Section 31-4 WET Act
7 Regulation 31-4.01 WET Regulations
8 Regulation 31-4.01 WET Regulations
9 Regulation 31-4.01 WET Regulations
10 Section 31-5 WET Act
11 Section 31-6 WET Act
12 Regulation 31-6.01 WET Regulations
13 Section 31-7 WET Act
