ATO Interpretative Decision

ATO ID 2006/183

Excise

Definition of mead for the purposes of the A New Tax System (Wine Equalisation Tax) Act 1999
FOI status: may be released
  • This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 in A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Decision

Yes. Water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose can be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 of the WET Act.

Facts

A manufacturer of mead uses various ingredients including water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose.

Reasons for Decision

Mead is defined in section 31-6 of the WET Act as a beverage that contains more than 1.15% by volume of ethyl alcohol and:

(a)
is the product of the complete or partial fermentation of honey; and
(b)
has not had added to it, at any time, any ethyl alcohol from any other source, except as specified in the regulations; and
(c)
has not had added to it, at any time, any liquor or substance (other than honey) that gives colour or flavour, except as specified in the regulations; and
(d)
complies with any requirements of the regulations, made for the purposes of section 31-8, relating to mead.

The A New Tax System (Wine Equalisation Tax) Regulations 2000 (the Regulations) specify that for the purposes of paragraph (c) of the above definition certain ingredients may be added to mead even though they give colour or flavour. The Regulations also specify when these ingredients may be added. The Regulations provide that:

herbs or spices may be added during or after the production of mead;
caramel may be added to mead after the fermentation process; and
subject to specified constraints, fruit or product derived entirely from fruit may be used in the production of mead.

Water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose are not considered to give colour or flavour when added to mead. Accordingly, these ingredients may be added without affecting the ability of the beverage to satisfy the definition of mead. Each of these ingredients is considered below:

Water
Water is colourless and is without flavour. The addition of water does not give colour or flavour to the mead.
Yeast cultures
Yeast cultures assist in the fermentation process. They are not considered to give colour or flavour to the mead.
Diammonium phosphate and thiamine
Diammonium phosphate and thiamine provide nutrients which assist in the fermentation process and are commonly used in the wine making process. They are not considered to give colour or flavour to the mead.
Tartaric acid and sucrose
Tartaric acid is used to adjust the ph balance of the mead while sucrose is added to adjust the baume. The addition of acid or sucrose allows the sharpness or sweetness of the mead to be adjusted. They are not considered to give colour or flavour to the mead.

Accordingly, water, yeast cultures, diammonium phosphate, thiamine, tartaric acid and sucrose can be used in the manufacture of a beverage that is 'mead' for the purposes of section 31-1 of the WET Act.

Amendment History

Date of amendment Part Comment
29 November 2013 Legislative References, Related Public Rulings Updated WET rulings references.

Date of decision:  21 March 2006

Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
   section 31-1
   section 31-6

A New Tax System (Wine Equalisation Tax) Regulations 2000
   The Regulations

Related Public Rulings (including Determinations)
Wine Equalisation Tax Ruling WETR 2009/1
Wine Equalisation Tax Ruling WETR 2009/2

Keywords
Alcohol
Excise
Mead
Wine
Wine equalisation tax

Siebel/TDMS Reference Number:  3846676

Business Line:  Indirect Tax

Date of publication:  28 July 2006

ISSN: 1445-2782

history
  Date: Version:
  21 March 2006 Original statement
You are here 29 November 2013 Updated statement