House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Commencement and general amendments

Overview

1.1 This Chapter explains new operational provisions to the Diesel and Alternative Fuels Grants Scheme Act 1999 (DAFGSA) to provide the methods and requirements necessary to calculate the quantity of the fuel grant available.

Summary of the legislation

1.2 The amendments deal with the short title of this Act, commencement provisions, the insertion of additional definitions and the following general operational provisions:

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notification of change of registration details;

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cancellation of registration;

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what constitutes a journey;

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statutory formulae for eligible use of fuel;

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making an application to have a specified grant period;

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advances on account of fuel grants;

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further information required by the Commissioner of Taxation (the Commissioner);

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the making of an assessment of your entitlement to a fuel grant;

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reliance by the Commissioner on statements made in a claim;

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the Commissioner must give notice of an assessment;

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amendment of an assessment; and

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production of a notice of assessment is conclusive evidence that the assessment was properly made.

Explanation of the amendments

Short title

1.3 Upon commencement this Bill will be cited as the Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Act 1999. [Section 1 and items 2, 3 and 4 of Schedule 1]

Commencement

1.4 New sections 1, 2 and 3 and the provisions dealing with the short title, commencement, the Schedules and commencement provisions of Schedule 1 to this Bill respectively will commence on the day on which this Bill receives the Royal Assent.

1.5 The DAFGSA (other than sections 1, 2, 9 and 10) commence immediately after the commencement of the Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Act 1999. This is necessary to ensure that instruments and determinations may be made and registration mechanisms can be established before the Diesel and Alternative Fuels Grants Scheme (the Scheme) takes effect on 1 July 2000. This will avoid any undue delay in claimants receiving their entitlements.

1.6 Part 3 of Schedule 1 dealing with the amendment of the grants entitlement provisions commences immediately after the commencement of the DAFGSA.

1.7 Sections 9 and 10 of the DAFGSA can only commence once the emission standards have been established. Grants, therefore, can only be paid under the Scheme after these environmental safeguards have been established. It is, of course, also required that the necessary appropriations are made before grants can be made. [New subsections 2(1A) and (1B), item 1 of Schedule 1; items 2, 3 and 4 of Schedule 1]

Definitions

1.8 This Bill also amends section 5 of the DAFGSA to insert the following new definitions:

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amount

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APS employee

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assessment

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authorised officer

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Deputy Commissioner

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false statement

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goods

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occupier

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overpayment debt

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premises

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public road

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scheme debt

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trustee

1.9 These new definitions are inserted into section 5 of the DAFGSA and are generally self explanatory. For example, Deputy Commissioner means a Deputy Commissioner of Taxation, amount includes a nil amount, assessment includes a nil amount etc. [Items 5 to 19 of Schedule 1]

1.10 An amendment is also made to clarify that the Commissioner has the general administration of the DAFGSA. [New Section 6A, item 20 of Schedule 1]

1.11 This Bill ensures that a person must be registered before being able to claim a fuel grant. [New Section 6B, item 21 of Schedule 1]

1.12 The registration provision (section 7) is amended to clarify that people will be able to apply for registration on or after 1 March 2000. This is to enable the administrative systems to be developed to deal with applications for registration. [Item 22 of Schedule 1]

1.13 The registration provisions are also amended to require a person who is registered to notify the Commissioner within 28 days of any change in the prescribed registration details for entitlements to fuel grants. [New subsections 7(3) and (4), item 23 of Schedule 1]

1.14 The note in section 8, discussing the review of a decision of the Commissioner to refuse registration is removed because such a decision is a reviewable decision. Part IVC of Taxation Administration Act 1953 applies to these decisions and there is no necessity to refer the matter directly to the Administrative Appeals Tribunal. [Item 24 of Schedule 1]

1.15 A minor amendment is made to subsection 8(3) to change an internal cross reference from section 17 to new section 62. [Item 25 of Schedule 1]

Cancellation of registration

1.16 New section 8A is inserted to enable the Commissioner to cancel registration where there has been no claim for a fuel grant within a 13 month period from the date of commencement of sections 9 and 10. New section 8A also enables the Commissioner to cancel registration where your eligibility for registration has changed.

1.17 The Commissioner must cancel your registration in respect of a particular vehicle if you request such a cancellation.

1.18 The Commissioner must give you a written notification of cancellation. However, such a cancellation does not prevent you from applying for a fresh registration in respect of a particular vehicle. [New section 8A, item 26 of Schedule 1]

What constitutes a journey

1.19 A new provision is inserted to enable the Commissioner to make a determination as to what will, or will not, constitute a journey for the purposes of the DAFGSA. These determinations are to be in writing and will be of a legislative character. As these determinations will be of a legislative character they will be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. [New section 10A, item 27 of Schedule 1]

1.20 The Commissioner will issue these determinations after consultation with industry representatives, which must include (at least) the following:

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the Bus Industry Confederation;

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the Australian Trucking Association Ltd;

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the National Farmers Federation; and

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any other organisations (if any) as are specified in the regulations.

[New section 10A, item 27 of Schedule 1]

Statutory formulae for working out eligible use of fuel

1.21 If you are entitled to a grant for a vehicle of 20 tonnes or more you work out your entitlement using the following formula:

Total quantity of fuel X (Eligible kilometres)/Total Kilometres


1.22 The same formula is used for vehicles of 4.5 tonnes or more, but less than 20 tonnes. [New section 10B, item 27 of Schedule 1]

1.23 The total quantity of fuel means the number of litres (or cubic metres) of the type of fuel used in the particular grant period that you actually purchased or imported into Australia.

1.24 Eligible kilometres means the number of kilometres travelled by the vehicle during the particular grant period using that type of fuel that you purchased or imported into Australia.

1.25 Total kilometres means the total number of kilometres travelled in the particular grant period using the type of fuel that you purchased or imported into Australia.

1.26 The Example 1.1 illustrates how the formula will operate:

Example 1.1 Vehicle of 20 tonnes or more

Wendy is an owner operator of a road train of more than 20 tonne gross vehicle mass (GMV). She is conducting an enterprise and all travel is part of the business. All her travel is conducted in carrying on her enterprise and all of it is on public roads. If she travels 4,000 km in a claim period and she used 3,000 litres of fuel in that period the calculation for the quantity of fuel claimed is:

3,000 litres X 4,000km/4,000km = 3,000 litres


All travel eligible but some travel in the metropolitan area

Alice is an owner operator of a road train of more than 20 tonne GVM. She is conducting an enterprise and all travel is part of the business. All her travel is conducted in carrying on her enterprise and all is conducted on public roads. If she travels 4,000 km in a claim period, 1,500 km of which is performed in a metropolitan area and she used 3,000 litres of fuel in that period the calculation for the quantity of fuel claimed is:

3,000 litres X 4,000km/4,000km = 3,000 litres


Not all travel eligible

Jane is an owner operator of a road train of more than 20 tonne GVM. All her travel is conducted in carrying on her enterprise. Some of her travel is not on a public road. If she travels 4,000 km in a claim period but only 3,500 km is on a public road and she used 3,000 litres of fuel in that period the calculation for the quantity of fuel claimed is:

3,000 litres X 3,500km/4,000km = 2,625 litres


1.27 The same formula is used for vehicles of 4.5 tonnes or more, but less than 20 tonnes. Example 1.2 illustrates how the formula will operate.

Example 1.2 Vehicle of 4.5 tonnes or more, but less than 20 tonnes All travel eligible

James is an owner operator of a bus of 10 tonne GVM. He is conducting an enterprise and all travel is part of the business. All his travel is conducted in carrying on his enterprise and all travel is conducted on public roads. All his journeys were conducted in a non metropolitan area. If he travels 5,000 km a claim period and he used 2,000 litres of fuel in that period the calculation for the quantity of fuel claimed is:

2,000 litres X 5,000km/5,000km = 2,000 litres


Not all travel eligible

Paul is an owner operator of a truck of 12 tonne GVM. All his travel is conducted in carrying on his enterprise. Some of his travel is not on a public road and some is conducted in a metropolitan area. He travels 5,000 km in a claim period but only 4,000 km is on a public road. Of the 4,000 km on a public road 500 km was solely in a metropolitan area. He used a total of 2,000 litres of fuel in that period. The calculation for the quantity of fuel claimed is:

Eligible km = 4,000 km - 500 km = 3,500 km


2,000 litres X 3,500km/5,000km = 1,400 litres


No travel eligible because in a metropolitan area

Shane is an owner operator of a truck of 12 tonne GVM. All his travel is conducted in carrying on his enterprise. All of his travel is on public roads in a metropolitan area. He travels 5,000 km in a claim period. He used a total of 2,000 litres of fuel in that period. The calculation for the quantity of fuel claimed is:

2,000 litres X 0km/5,000km = 0 litres


1.28 Minor amendments are made to section 11 dealing with the amount of fuel grants to make it clear that the grant is for use of a particular type of fuel. [Items 28 to 30 of Schedule 1]

1.29 A minor amendment is made to subsection 14(2) to substitute the word "However" with "Despite subsection (1)". This ensures that a grant period under a determination overrides a choice you may have made. [Item 31 of Schedule 1]

Making an application to have a specified grant period

1.30 Section 14 is amended to enable you to apply to treat 2 smaller grant periods of a financial year as grant periods. The smaller grant periods do not have to be of the same length but must not be longer than 11 calendar months. The Commissioner may, in writing, grant such an application and if the Commissioner refuses such an application the Commissioner must give written notice of the refusal. [New subsections 14(4) to (7), item 32 of Schedule 1]

Advances on account of fuel grants

1.31 This Bill also allows the Commissioner to make advances on account of a fuel grant that may become payable. [New subsection 14A(1), item 33 of Schedule 1]

1.32 If you receive an advance of a grant payable you must repay the amount if:

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the amount of the advance is greater than the amount of the fuel grant; or

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you do not make a claim for the fuel grant within 21 days after the end of the grant period.

[New subsections 14A(2) and (3), item 33 of Schedule 1]

1.33 The Commissioner must not make an advance unless requested to do so and the amount cannot exceed the amount requested. [New subsection 14A(4), item 33 of Schedule 1]

1.34 The Commissioner must not make an advance before the commencement of sections 9 and 10 of the DAFGSA. [New subsection 14A(6), item 33 of Schedule 1]

1.35 The request for an advance may be included in the same document as either:

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an application for rebate under section 164 of the Customs Act 1901; or

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an application for a rebate under section 78A of the Excise Act 1901.

[New subsection 14A(5), item 33 of Schedule 1]

1.36 This Bill enables the Commissioner to make written guidelines for deciding whether to make advances of fuel grants. The Commissioner must comply with those guidelines. The guidelines will be disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901 . [New section 14B, item 33 of Schedule 1]

1.37 Subsection 15(1) of the DAFGSA is repealed and replaced with new subsection 15(1) to make it clear that a person can only be entitled to a grant if a claim is made before 1 December 2002. [Item 34 of Schedule 1]

1.38 New paragraph (ba) is inserted into subsection 15(2) to require a claim to include such information as is specified in the regulations [new paragraph 15(2)(ba), item 35 of Schedule 1] .

1.39 An amendment is made to subsection 15(2) to make it clear that the subsections operation is not limited by section 7 which deals with registration for entitlement to the grant. [New subsection 15(2A), item 36 of Schedule 1]

1.40 New subsection 15(3A) is inserted to provide that if more than one claim is made for a particular grant period, you are not entitled, and are not taken to have been entitled, to a fuel grant in respect of that grant period. [New subsection 15(3A), item 37 of Schedule 1]

1.41 This Bill also makes further amendments to section 15 dealing with claims for payment to enable the following administrative matters to be dealt with:

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further information may be required by the Commissioner about a claim. The Commissioner however, must request that further information within 28 days after the claim was made. The Commissioner need not consider your claim until the information is provided [new section 15A, item 38 of Schedule 1] ;

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requiring the Commissioner to make an assessment of the amount of fuel grant where an application has been made [new section 15B, item 38 of Schedule 1] ;

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the Commissioner being able to rely on statements made in a claim [new section 15C, item 38 of Schedule 1] ;

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the Commissioner must give notice of an assessment. However failure does not effect the validity of the assessment. The Commissioners notification may be made electronically [new section 15D, item 38 of Schedule 1] ;

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the Commissioner being able to amend an assessment at any time [new section 15D, item 38 of Schedule 1] ; and

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that the production of an assessment is conclusive evidence that the assessment was properly made [new section 15F, item 38 of Schedule 1] .

1.36 Section 16 is amended to clarify that where you are entitled to a fuel grant in respect of a grant period, that grant is a debt due to you by the Commonwealth and you may sue for recovery of that grant. [New section 16(1), item 39 of Schedule 1]