ATO Interpretative Decision

ATO ID 2009/14 (Withdrawn)

Excise

• This ATO ID is withdrawn as it does not accurately reflect/indicate the ATO view.
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Issue

Is reconstituted apple juice, apple juice for the purposes of the definition of 'cider or perry' as defined in paragraph 31-5(a) of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act)?

Decision

Yes. Reconstituted apple juice is apple juice for the purposes of the definition of 'cider or perry' in paragraph 31-5(a) of the WET Act.

Facts

Apple juice is extracted from apples and then subjected to an evaporation process whereby water vapour is removed to produce apple juice concentrate.

As a consequence of the concentration process, volatile aromatic components are also removed from the juice. These aromatic compounds are condensed to liquid and called apple juice condensate.

The apple juice condensate is obtained solely via the concentration process and contains only the natural aromatic compounds of apple juice.

Apple juice condensate is re-introduced to concentrated apple juice to restore the original aroma and flavour of the juice.

The apple juice concentrate, apple juice condensate and water are combined to produce reconstituted apple juice, which is then fermented.

Reasons for Decision

Section 31-5 of the WET Act defines 'cider or perry' to mean a beverage that:

(a)

is the product of the complete or partial fermentation of the juice or must of apples or pears; 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 water or the juice or must of apples or pears) 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 cider or perry.

Paragraph 31-5(a) of the WET Act requires the beverage to be the product of the fermentation of the juice of apples. However, it does not preclude the use of reconstituted apple juice to obtain apple juice for fermentation.

Whether the reconstituted apple juice is apple juice is a question of fact.

Apple juice concentrate and apple juice condensate are products derived from apple juice.

The combining of apple juice concentrate and apple juice condensate with water to produce a product that is no more than apple juice would not prevent the product of the combination being apple juice for the purposes of paragraph 31-5(a) of the WET Act.

The addition of apple juice condensate to merely reconstitute apple juice for fermentation is not adding a substance to give flavour to the juice as contemplated by paragraph 31-5(c) of the WET Act. However, adding apple juice condensate in addition to what is required to reconstitute apple juice would result in a product that is not apple juice for the purposes of paragraph 31-5(a) of the WET Act.

Furthermore, adding apple juice condensate to apple juice would amount to adding a substance to give flavour, which is not permitted under paragraph 31-5(c) of the WET Act.

As such, reconstituted apple juice which is the product of combining apple juice concentrate, apple juice condensate and water in the appropriate proportions is the same as apple juice for the purposes of paragraph 31-5(a) of the WET Act.

Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
   section 31-5
   paragraph 31-5(a)
   paragraph 31-5(c)

Keywords
Cider
Wine equalisation tax

Business Line:  Excise Centre of Expertise

Date of publication:  20 March 2009

ISSN: 1445-2782