| Disclaimer This edited version has been archived due to the length of time since original publication.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. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012597373372
Ruling
Subject: White wine based ginger beer
Question 1
Is your product a wine under section 31-1 of the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act) and therefore subject to wine equalisation tax (WET)?
Answer
Yes
This ruling applies for the following periods:
From 4 March 2014
The scheme commences on:
Unknown
Relevant facts and circumstances
The ingredients of your product are as follows:
• Wine, comprising greater than 70% of your final product
• Sugar,
• Flavours,
• Preservatives,
• Acid, and
• Water.
• The wine is produced from the fermentation of grapes, with no spirit, colours or flavours added. This wine contains greater than 1.15% but less than 22% by volume of ethyl alcohol and has not been subject to any process that has the effect of adjusting, reducing or removing the normal colour, flavour or aroma of the wine.
• One of the flavours contains grape spirit as a carrying medium.
• There is no ethyl alcohol added to your product from any other source.
• Your product will not be subject to any process that has the effect of adjusting, reducing or removing the colour, flavour or aroma.
• Your final product will contain greater than 8% but less than 22% by volume of ethyl alcohol.
Relevant legislative provisions
A New Tax System (Wine Equalisation Tax) Act 1999 Section 31-1
A New Tax System (Wine Equalisation Tax) Act 1999 Section 31-2
A New Tax System (Wine Equalisation Tax) Act 1999 Section 31-3
A New Tax System (Wine Equalisation Tax) Regulations 2000 Regulation 31-2.01
A New Tax System (Wine Equalisation Tax) Regulations 2000 Regulation 31-3.01
Reasons for decision
Wine is defined in section 31-1 of the WET Act as meaning, grape wine, grape wine products, fruit or vegetable wine, cider or perry, mead and sake and does not include beverages that do not contain more than 1.15% by volume of ethyl alcohol. Each of these beverages is then further defined in the WET Act.
Your product falls for consideration as grape wine product. Grape wine product is defined in section 31-3 of the WET Act and is subject to certain requirements as specified in regulation 31-3.01 of the A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations). The WET Act and WET Regulations provide that 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
• has not had added to it the flavour of any alcoholic beverage other than wine, and
• contains between 8% and 22% inclusive by volume of ethyl alcohol.
Grape wine is defined in section 31-2 of the WET Act and is subject to certain requirements as specified in regulation 31-2.01 of the WET Regulations. The WET Act provides that 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. The WET Act further provides that a beverage will 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.
However, regulation 31-2.01 of the WET Regulations provides that a beverage will not be grape wine where it contains more than 22% by volume of ethyl alcohol.
The main ingredient of your product is a wine, produced solely from the fermentation of grapes. This wine comprises greater than 70% of the total volume of your product and contains greater than 1.15% but less than 22% by volume of ethyl alcohol. The wine 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% by volume of ethyl alcohol. It also displays the normal characteristics expected of grape wine (such as the colour, aroma and flavours of grape wine). Therefore, it is considered to be grape wine and so the requirement for your product to contain at least 70% grape wine has been met.
You also add various flavours to your product. One flavour will contain grape spirit as a carrying medium. Other than the grape spirit contained in this flavour, there is no ethyl alcohol added to your product. Based on the facts, we do not consider the flavours added to your product to be the flavour of any other alcoholic beverage and therefore the addition of these flavours to your product does not preclude your product from being a grape wine product.
As your product will contain greater than 8% but less than 22% by volume of ethyl alcohol, your product is therefore classified as a grape wine product under section 31-3 of the WET Act.
Your product is therefore a wine under section 31-1 of the WET Act and will be subject to WET.