When to pay customs duty
You need to pay customs duty and GST upon arriving in Australia for fuel onboard a ship that is all of the following:
- an overseas ship
- under 400 gross tonnes
- intending to undertake a domestic voyage.
These charges are administered by Australian Border ForceExternal Link.
Domestic voyages
For fuel purchased for domestic voyages, you need to pay excise duty and GST if either:
- your ship is under 400 gross tonnes
- the fuel is not purchased from an excise licensed supplier.
This applies regardless of whether there are short-term and long-term disconnections or you are an imported ship.
If you are carrying on an enterprise, you may be eligible for fuel tax credits and GST credits.
Example: ship under 400 gross tonnes
Matthews' Odyssey is a private Australian luxury yacht that is 200 gross tonnes, normally docked in Sydney. After an international trip to the Philippines, upon arrival in Brisbane, the yacht enters the imported bunker fuel onboard and pays customs duty and GST. The ship then refuels its bunker supply from an excise licensed supplier before heading back to dock in Sydney.
As the ship is under 400 gross tonnes and isn't carrying on a business, the fuel can't be supplied duty free and the ships’ owners need to pay excise duty and GST. As a private ship, it's not eligible for fuel tax credits.
Additionally, as the yacht had disengaged from its international trip at Brisbane, there is no eligible refund of the duty paid for the fuel used in Australia.
End of exampleIf you're a fuel supplier without an excise licence or periodic settlement permission, you can't apply a remission and supply duty free fuel, regardless of the ship's size. The fuel will be subject to excise duty and GST.
Example: unlicensed fuel supplier
The Arielle Rose, owned by Mercy Tours, is a 450-gross tonne luxury cruise ship, conducting regular cruises along the north coast of Australia between Darwin and Brisbane. Due to low bunker fuel onboard, the cruise ship is forced to make an unscheduled stop, where it is only able to source fuel from Jung’s Fuels, an unlicensed fuel supplier.
As the fuel supplier is unlicensed, they can't purchase the fuel without duty, even though the ship is over 400 gross tonnes, so excise duty and GST is charged on the purchase of the fuel. Mercy Tours is entitled to a fuel tax credit, as the fuel was purchased for the purpose of carrying on a business.
End of example