Overseas ships
An overseas ship is one that is currently making, or about to make, an international voyage. Ships undertaking international voyages include:
- cargo ships
- passenger ships
- a range of other ships that undertake maritime work.
An overseas ship may be either:
- an international (foreign) ship owned by a non-resident shipping operator. It may or may not perform domestic voyages
- a resident-owned ship that travels directly overseas or via another Australian port, where the port of call is incidental to that voyage.
It's important to know the residency of your ship because it affects your GST obligations and whether you may be entitled to claim fuel tax credits or GST credits.
Voyage types
The type of voyage a ship is taking is determined by the primary purpose of the trip within Australian waters.
The type of voyage and the size of the vessel determines if bunker fuels are subject to customs duty, excise duty and GST.
Find out more about international voyages and domestic voyages.
International voyages
An international voyage is a voyage between a place in Australia and a place outside Australia. The voyage can be direct or indirect.
Australia, for excise purposes, doesn't include Norfolk Island, Christmas Island or Cocos (Keeling) Islands.
When determining if a ship has undertaken a voyage to a place outside Australia, a 'place outside Australia' doesn't include:
- a ship or an area of waters outside Australia
- installations outside Australia
- a reef or uninhabited island outside Australia.
To qualify as an international journey, the ship needs to travel between a place in Australia and a place outside Australia. A ship that travels through international waters and then returns to Australia, hasn't undertaken an international voyage.
Overseas ships on international voyages
An overseas ship is making a continuing international voyage when it:
- loads or unloads international cargo in an Australian port on arrival from overseas
- is in transit to an overseas destination.
An overseas ship travelling between Australian ports may maintain its international voyage status even if it loads or unloads international cargo at each stop.
Duty payable on bunkers during international voyages
Bunkers on 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.
Example: uninterrupted international voyage
TM Shipping Lines operates a foreign-owned ship. After arriving in Brisbane from Singapore, it discharges some international cargo and loads domestic cargo for Melbourne.
In Melbourne, it discharges that domestic cargo and some international cargo. It then acquires local bunkers and departs for Auckland where it discharges the remaining international cargo.
Although the ship carried domestic cargo between Brisbane and Melbourne, the international voyage wasn't interrupted. This is because transportation of the domestic cargo wasn't the sole purpose of the Brisbane-Melbourne leg.
TM Shipping Lines don't have to pay customs duty and GST on fuel consumed during the voyage. The bunkers acquired in Melbourne are also free of excise duty.
End of exampleDomestic voyages
A domestic voyage is a voyage between 2 Australian ports, solely for the purpose of transporting domestic goods.
Overseas ships on domestic voyages
An overseas ship is on a domestic voyage when the sole purpose of a leg is either to:
- load or unload domestic cargo
- re-position the ship to load or unload domestic cargo for transport to an Australian port.
A continuing international voyage is temporarily interrupted by short or long-term disconnections and permanently ceased if a ship is imported.
Short-term or long-term disconnected domestic journeys
An overseas ship may temporarily interrupt its continuing international voyage to either:
- transport domestic cargo between Australian ports
- re-position the ship to load or unload domestic cargo.
If it takes:
- up to 3 domestic legs as part of its voyage, it is a short-term disconnection
- more than 3 legs of domestic voyages, it is a long-term disconnection.
In both instances, the domestic voyage ceases after the domestic cargo is unloaded and the ship resumes its international voyage.
Ships that conduct survey, construction, oil and gas exploration operations, and similar activities in Australia may interrupt a continuing international voyage.
Example: short-term disconnection
Scott Shipping operates a foreign-registered ship. After arriving in Brisbane from Hong Kong, it discharges some international cargo. It then accepts a spot charter to transport domestic cargo from Brisbane to Newcastle and Sydney. After unloading that cargo in Sydney, it departs for Auckland where it discharges the remaining international cargo.
Although it has international cargo on board, the ship didn't load or unload any international cargo in Newcastle or Sydney. As a result, the 2 legs conducted between Brisbane and Newcastle and Newcastle and Sydney have interrupted the international voyage. They are a short-term disconnection to the voyage.
If the ship also had to unload cargo in Melbourne (making it 4 legs), it would be considered a long-term disconnection.
End of exampleImported ships
A ship is imported when it ceases its international voyage or undertakes activities while in Australia (that are not authorised under a coastal trading licence or special recreational vessel licence) that break that continuous nature of the ship's international voyage.
This includes terminating or suspending the ship's international voyage for a significant time, for example, to remain in Australian waters to perform work or undertake significant repairs or other major works to the vessel.
Duty payable on bunkers during domestic voyages
From 1 January 2025, eligible ships of 400 gross tonnes or more can purchase bunker fuel free of duty from a licensed premise. For more information, see Bunkers free of duty.
Purchases of bunker fuel that don't meet the remission criteria, and are used to undertake a domestic voyage, are subject to duty. For more information, see Duty paid bunker fuel.