Edited version of your written advice

Authorisation Number: 1051482200241

Date of advice: 1 March 2019

Ruling

Subject: Product Classification

Question

Does your product, meet the definition of ‘fruit or vegetable wine’ as defined in section 31-4 of the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act)?

Answer

Yes, your product, meets the definition of ‘fruit or vegetable wine’ as defined in section 31-4 of the WET Act.

This ruling applies for the following period:

1 March 2019 to 30 June 2023

The scheme commences on:

1 March 2019

Relevant facts and circumstances

1. You are registered for goods and services tax (GST) and wine equalisation tax (WET).

2. You plan to manufacture a product (the product) which will be manufactured in two stages.

3. In stage 1, reconstituted fruit juice will undergo fermentation to produce a base wine.

4. The stage 2 process does not include any further fermentation and is simply the addition of sugar, fruit juice concentrate, additives and water to the base wine.

5. The fruit juice concentrates used in the product are made from 100% natural fruit and do not comprise any other substances.

6. The ‘additives’ mentioned above are used as processing aids, for controlling/stabilising acidity levels or as preservatives and do not contribute any colour or flavour to the product.

7. The product will have an alcoholic content of more than 8% alcohol bv volume (abv) and less than 22% abv.

Relevant legislative provisions

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

A New Tax System (Wine Equalisation Tax) Regulations 2000 Subdivision 31-A

Reasons for decision

‘Wine’ is defined in section 33-1 of the A New Tax System (Wine Equalisation Tax) Act 1999 (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 provides that wine means any of the following:

● grape wine;

● grape wine products;

● fruit or vegetable wine;

● cider or perry;

● mead;

● sake.

However, wine does not include beverages that do not contain more than 1.15% by volume of ethyl alcohol. All of the beverages set out above are separately defined for the purposes of the WET Act and, of these definitions, ‘fruit or vegetable wine’ is the only one that is relevant in your circumstances.

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 as specified in regulation 31-4.01 of A New Tax System (Wine Equalisation Tax) Regulations 2000 (WET Regulations).

A fruit or vegetable wine, taking into account the requirements of both the WET Act and the WET Regulations, 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; and

● has not had added to it, at any time, any ethyl alcohol from any other source, except grape spirit or neutral spirit, as specified in the WET Regulations; and

● has not had added to it, at any time, any liquor or substance that gives colour or flavour; 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.

In order for us to determine whether your product is a fruit or vegetable wine we need to consider each element of the definition.

Product of the complete or partial fermentation of the juice or must of fruit or vegetables or products derived solely from fruit or vegetables

The reconstituted fruit juice is fruit juice for the purposes of the definition of ‘fruit or vegetable wine’.

Following the production of the base wine in stage 1, fruit juice concentrate is added as part of stage 2 of production. In accordance with the principle set out in the decision in Woolworths Group Limited and Comptroller-General of Customs [2019] AATA 62, the fruit juice concentrate, when added to the base wine, is ‘juice’ for the purposes of the definition of ‘fruit or vegetable wine’. Therefore, the addition of the fruit juice concentrate in stage 2 results in a beverage that is the product of the partial fermentation of fruit juice.

As the product is considered to be the product of the complete or partial fermentation of fruit juice, it satisfies this element of the definition of fruit or vegetable wine.

Has not had added to it, at any time, any ethyl alcohol from any other source

As no ethyl alcohol is added to the product at any point during either stage 1 or stage 2 of production process, the product meets this element of the definition.

Has not had added to it, at any time, any liquor or substance that adds colour or flavour

Throughout the production process small amounts of additives will be added to the product as processing aids. The Commissioner does not consider these additives to be substances that give colour or flavour to the product.

As no other liquor or substance that adds colour or flavour is added to the product, it satisfies this element of the definition of fruit or vegetable wine.

Contains between 8% and 22% of ethyl alcohol by volume

The final alcohol strength of the product will be more than 8% abv and less than 22% abv.

Conclusion

The product satisfies all of the elements within the definition of ‘fruit or vegetable wine’ in section 31-4 of the WET Act and regulation 31-4.01 in the WET Regulations and would therefore be considered a ‘fruit or vegetable wine’.