Duty free international voyages
Bunkers for an overseas ship engaged in an international voyage don't have to pay customs duty or GST on fuel consumed during the voyage. They can also acquire local bunkers without having to pay excise duty or GST.
Make sure you understand what qualifies as an international voyage.
Duty free domestic voyages
From 1 January 2025, you don't have to pay customs duty on bunker fuel remaining in your ship when you arrive into Australia if your ship is both:
- an eligible overseas ship embarking on domestic voyages, or an imported ship
- 400 gross tonnes or more.
An automatic remission of the customs duty can be applied.
You aren't eligible to claim refunds and fuel tax credits on fuel that hasn't had excise or customs duty paid on it.
If you're unsure whether you've paid customs or excise duty, check with your supplier. You need to maintain records of any purchases inclusive of duty if you intend to make a claim for a refund or fuel tax credit.
There is no change to your GST obligations. Bunker fuels purchased for domestic voyages remain subject to GST. You need to pay GST for any bunker fuel:
- that is onboard when arriving in Australia from overseas
- purchased for the purpose of a domestic voyage.
Find out more about claiming GST credits.
Eligibility criteria
To purchase duty free bunker fuels or be eligible for a customs duty remission (for fuel onboard overseas ships), the ship must be undertaking, or about to undertake, a domestic voyage. To be eligible the fuel must also be all of the following:
- subject to customs or excise duty (aviation fuels are not included)
- bunker fuel for powering the ship (not part of the cargo manifest)
- supplied from an excise licensed fuel supplier or is onboard an overseas ship upon arrival
- supplied for use in carrying on a business
- for a ship with a gross tonnage of 400 gross tonnes or more.
Example: duty free bunker fuel
Schrodinger Shipping PLC operates a ship that is 600 gross tonnes. The ship arrives in Perth from Singapore, with bunkers onboard, and fully discharges its cargo. It then picks up cargo to be delivered in full in Sydney, and re-fuels at an excised licenced fuel supplier, before departing.
As the ship has fully discharged its international cargo, the voyage from Perth to Sydney is considered a domestic voyage. As the ship is over 400 gross tonnes, a customs remission was applied to the bunker fuel onboard. An excise remission was applied to the purchased fuel as it also was all the following:
- for the purposes of powering the ship
- from an excise licenced supplier
- for the purposes of carrying on a business.
All fuel (onboard and purchased) is subject to GST.
End of exampleIf a ship doesn't meet the eligibility criteria, it can't receive duty free bunker fuels or be eligible for a customs duty remission.
The fuel supplier will need to include excise duty and GST in its invoice.
The operator of the ship (or their resident agent) may be eligible to claim fuel tax credits on the purchase of the fuel.
Example: excise duty applies to bunker fuel
A fishing trawler, Shelly Turtle Trawls, is 300 gross tonnes and undertakes commercial fishing activities along the coast of Australia. The operator purchases diesel for this from an excise licenced fuel supplier.
The fuel supplier supplies the diesel with excise duty inclusive in the cost but can't supply it duty free as the fishing trawler is less than 400 gross tonnes.
The fuel supplier must pay excise duty to the ATO on the supply of the fuel, as no excise duty remission applies. They invoice Shelly Turtle Trawls for the cost of diesel inclusive of excise duty and GST.
End of example