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16 Jun 10 Alcohol removed wine not GST free - JMB Beverages

The Full Federal Court (Stone, Jessup and Jagot JJ) has dismissed the taxpayer's appeal from the decision of Edmonds J, who had held that four varieties of alcohol-removed wine products marketed under the "Edenvale" brand name were not exempt from GST, not falling within Items 11 or 12 of the table in cl 1 of Sch 2 to the GST Act. These items apply to non-alcoholic carbonated beverages consisting wholly of juices of fruits or vegetables or, non-alcoholic non-carbonated beverages consisting of at least 90% by volume of juices of fruits or vegetables.

The Full Court said, at para 8:

"As a matter of fact, the primary Judge found that the process of fermentation, which was used to produce the base wines which, after de-alcoholisation, constituted the major component of the beverages in question, changed the nature of that component. After, and as a result of, fermentation, juices of fruits were no longer present. The process of fermentation itself had changed the juices into wine. As we have said, we were referred to nothing in the evidence below that was inconsistent with this quite unremarkable conclusion by the primary Judge. His Honour was not in error to have drawn it."

JMB Beverages Pty Ltd v FCT [2010] FCAFC 68 (Full Federal Court; Stone, Jessup and Jagot JJ; 10 June 2010).


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