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This edited version has been archived due to the length of time since original publication.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.

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 written advice

Authorisation Number: 1012768672228

Ruling

Subject: WET - Product Classification

Question 1

Is your product a fruit or vegetable wine for the purpose of section 31-4 of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Answer

Yes

This ruling applies for the following periods:

01 January 2015 to 30 June 2018.

The scheme commences on:

01 January 2015.

Relevant facts and circumstances

Your product is made from fruit with a high sugar content and is made using the following process:

    1. The fruit is crushed at a juicing plant.

    2. The juice is trucked to a winery where buds and flowers are added prior to fermentation.

    3. During the fermentation process the alcohol that is being produced extracts the juice and aromatics from the buds and flowers to bind them to the product. It is the fermentation process that extracts the aromatics and flavours from the buds and flowers thus releasing the juice from the buds and flowers.

    4. Once fermented to at least 8% alcohol by volume (ABV) the process is finished and the product is pressed to separate the solid organic material remaining (residue of the fruit, buds and flowers) from the remaining product.

    5. The remaining product is filtered, carbonated and packaged.

Nothing apart from the juice of the fruit, flowers and buds and yeast are used to make your product.

Relevant legislative provisions

A New Tax System (Wine Equalisation Tax) Act 1999

A New Tax System (Wine Equalisation Tax) Act 1999 - Subdivision 31-A

A New Tax System (Wine Equalisation Tax) Act 1999 - Subsection 31-4.

Reasons for decision

Wine is defined in section 33-1 of the WET Act as having the meaning given by Subdivision 31-A of the WET Act.

Section 31-1 in Subdivision 31-A of the WET Act defines that wine means any of the following:

    • grape wine;

    • grape wine product;

    • fruit or vegetable wine;

    • cider or perry;

    • mead;

    • sake,

    provided they contain more than 1.15% by volume of ethyl alcohol.

These beverages are further defined in the WET Act. Having regard to these definitions, your product falls for consideration under fruit or vegetable wine. 

Fruit or vegetable wine is defined in section 31-4 of the WET Act. It is also subject to certain requirements specified in regulation 31-4.01 of the A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations).

Fruit or vegetable wine, taking into account the requirements of both the WET Act and the WET Regulations, is a beverage that:

    a)  is the product of the complete or partial fermentation of the juice or must of:

    (i)  fruit or vegetables; or

    (ii)  products derived solely from fruit or vegetables; and 

    b)  has not had added any ethyl alcohol from any other source except grape spirit or neutral spirit; and

    c)  has not had added any liquor or substance that gives colour or flavour (other than grape spirit or neutral spirit); and

    d) 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.

Your product

To determine whether your product is a fruit or vegetable wine under the WET Act, we need to determine whether the flowers and buds are a fruit or vegetable.

Relevantly, the Macquarie dictionary defines the term 'vegetable' as "any herbaceous plant, annual, biennial or perennial whose fruits, seeds, roots, tubers, bulbs, stems, leaves or flower parts are used for food….". They are the edible part of such plants.

Based on the definitions above, it can be determined that the flowers and buds added to your product are an edible plant and therefore, a vegetable.

Your product is manufactured by the addition of the flowers and buds to the fruit juice prior to fermentation. The juice and must of the flowers and buds is fermented with the fruit juice to produce a final product that is at least 8% ABV.

Your product therefore meets the requirements of a fruit or vegetable wine under the WET Act.

ATO view documents

Wine Equalisation Tax Ruling WETR 2009/1 Wine equalisation tax: the operation of the wine equalisation tax system.


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