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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Ruling

Subject: Excise classification and excise duty

Question 1

Is the beverage you produce 'beer' as defined in the Schedule to the Excise Tariff Act 1921 (Excise Tariff Act)?

Answer

No, the beverage you produce is not beer as defined in the Schedule to the Excise Tariff Act. It is defined as an 'other excisable beverage'.

Question 2

Is the beverage you produce eligible for an exemption from excise (duty)?

Answer

No, the beverage you produce is not eligible for an exemption from excise (duty).

This ruling applies for the following periods:

From 2009

Relevant facts and circumstances

    · The beverage you produce (the beverage) is not brewed but rather 'steeped'

    · The beverage is the by-product of an aqueous liquid

    · The beverage does not contain hops or extracts of hops

    · The beverage has a bitterness level comparable to between 10.0 and 14.0 international bitterness units

    · At no time are distilled spirits added to the beverage

    · At no time are additional flavours, sweeteners or artificial enhancements added to the beverage

    · There are no artificial sweeteners added to the beverage, and

    · The volume of alcohol of the final beverage is more than 1.15%.

Relevant legislative provisions

A New Tax System (Wine Equalisation Tax) Act 1999

Excise Tariff Act 1921

Excise Tariff Act 1921 - The Schedule

Reasons for decision

Question 1

As from 28 August 2009 the Schedule to the Excise Tariff Act provides that:

beer means a brewed beverage that:

    (a) is the product of the yeast fermentation of an aqueous extract, being predominantly an aqueous extract of cereals:

      (i) whether the cereals are malted or unmalted; and

      (ii) whether or not the aqueous extract contains other sources of carbohydrates; and

    (b) contains:

      (i) hops, or extracts of hops, such that the beverage has international bitterness units of not less than 4.0; or

      (ii) other bitters such that the beverage has a bitterness comparable to that of a beverage mentioned in subparagraph (i); and

    (c) contains not more than 4.0% by weight of sugars; and

    (d) had not had added to it, at any time, artificial sweetener; and

    (e) may have added to it, at any time, other substances, including flavours, but only if, in the case of substances that contain alcohol (other than spirit distilled from beer), the alcohol did not add more than 0.5% to the total volume of the final beverage; and

    (f) may have added to it, at any time, spirit distilled from beer, but only if that spirit did not add more than 0.5% to the total volume of the final beverage; and

    (g) contains more than 1.15% by volume of alcohol.

The beverage is accepted as a brewed beverage.

The beverage is not the product of the yeast fermentation of an aqueous extract, being predominately an aqueous extract of cereals. Therefore, it does not satisfy the requirements of paragraph (a) of the definition of beer in the Schedule to the Excise Tariff Act.

As one of the paragraphs of the definition has not been satisfied, the beverage is not 'beer' as defined in the Schedule to the Excise Tariff Act.

Question 2

The beverage is not able to be supplied excise-free, as it does not fall into any of the following excisable alcoholic product categories:

    · ale, porter and other beer

    · brandy

    · whisky

    · rum

    · gin, and

    · liqueurs.

Underbond excisable goods including alcohol or alcoholic products that are delivered for exportation will also not have excise payable on them. The beverage is also not intended to be delivered for exportation and as such, excise is payable on the beverage.


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