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Amended definition of grape wine product
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A change to the definition of grape wine product in the A New Tax System (Wine Equalisation Tax) Regulations 2000 takes effect today, 10 September 2009.
This new taxation definition of grape wine product has been introduced to ensure that beverages that mimic ready to drink beverages (RTDs) are taxed at the same rate as spirit-based RTDs.
The changes prevent any flavour of any alcoholic beverage other than wine being added to grape wine product and they also clarify when alcohol can be added to the grape wine product.
Under the new definition for grape wine product, no flavour of any alcoholic beverage (except wine), can be added at any time, whether the flavour is natural, artificial or contains alcohol or not.
For example, the addition of a rum flavour (whether it contains alcohol or not) or a number of flavours that combine to produce a rum flavour would lead to the beverage no longer being classified as a grape wine product. You can find the full definition of grape wine product through the Australian Tax Office’s frequently asked questions at www.ato.gov.au/WET under ‘more’, or phone 1300 137 290 for further information.
If your beverage is produced in Australia and contains more than 1.15% alcohol by volume but does not fall within any of the wine definitions contained in the WET legislation, you will need to pay excise duty.
The excise guidelines for the alcohol industry, available at www.ato.gov.au/excise under ‘more’ > Rulings and law, can provide more details.
Additionally, on 28 August 2009, an ongoing increase in the excise duty rate that applies to alcoholic beverages classified to item two of the Schedule to the Excise Tariff Act 1921 became law.
This duty rate applies to a number of alcoholic drinks and includes RTDs.
The higher rate has had effect since 27 April 2008, and is currently $69.57 per litre of alcohol content.