Excise guidelines for the fuel industry

2.2.1 WHY IS THERE A LICENSING REGIME?

1.8.3 Commonwealth of Australia Constitution

Section 90 - Exclusive power over customs, excise, and bounties

02 LICENSING: Applications

2.1 PURPOSE

2.2 INTRODUCTION

2.2.2 WHAT IS A LICENCE?

2.3 POLICY AND PRACTICE

2.3.1 DIFFERENT LICENCE TYPES

2.3.2 WHAT ARE MY RESPONSIBILITIES AS A LICENCE

2.3.3 WHAT ELSE CAN WE DO?

2.3.4 WHAT RECORDS DO I NEED TO KEEP?

2.3.5 HOW LONG IS MY LICENCE VALID FOR?

2.3.6 IS MY LICENCE TRANSFERABLE?

2.3.7 CAN MY LICENSING INFORMATION BE DISCLOSED?

2.4 PROCEDURES

2.4.1 HOW DO I REGISTER FOR EXCISE?

2.4.2 HOW DO I APPLY FOR A LICENCE?

2.4.3 HOW DO I CHANGE MY LICENCE DETAILS?

2.4.4 WHAT DO I DO IF I NEED MORE INFORMATION?

2.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO LICENCES?

2.6 TERMS USED

2.7 LEGISLATION (quick reference guide)

2.7.1 Excise Act 1901

2.7.2 Excise Tariff Act 1921

2.7.3 Customs Act 1901

2.7.4 Crimes Act 1914

2.7.5 Criminal Code Act 1995

2.1 PURPOSE

This chapter deals with:

why there is a licensing regime
what a licence is
different licence types
what records need to be kept
responsibilities of a licence holder
how long a licence is valid for
whether licences are transferable
disclosure of your licensing information
how to register for excise
how to apply for a licence
how to change your licence details, and
penalties that can apply to offences in relation to licences.

2.2 INTRODUCTION

2.2.1 WHY IS THERE A LICENSING REGIME?

The excise duty attached to excisable fuel products forms a significant component of the overall value of the goods. A licensing regime reduces the risk that the correct amount of duty will not be paid.

2.2.2 WHAT IS A LICENCE?

A licence is an approval or authorisation to enable you to undertake activities as specified in the licence. If you undertake these activities without a licence or contravene your licence you are committing an offence and may be prosecuted.

A licence is issued to a specific entity and specifies the site or sites[10] where the activities may be undertaken. This may require you to have more than one licence.

Licences can be issued to:

individuals
partnerships and companies in their own right, and
individuals and companies in their capacity as trustees.

There may be different licensing processes depending on the type of entity applying for the licence.

A licence is not transferable.

2.3 POLICY AND PRACTICE

2.3.1 DIFFERENT LICENCE TYPES

There are two licence types:

Manufacturer, and
Storage.

Manufacturer licence

To manufacture excisable goods, the Excise Act 1901 (Excise Act) requires you to be a licensed manufacturer[11] and that the goods be manufactured at licensed premises in accordance with the conditions specified on your manufacturer licence.[12]

The term 'manufacture' is defined in section 4 of the Excise Act and includes all processes (that is, operations or actions) used in the manufacture of excisable goods. The definition in the Excise Act is an inclusive one, that is, it includes some processes that might otherwise not generally be considered as manufacture. However, the definition itself refers to the processes that are used in the manufacture of excisable goods It is, therefore, relevant to examine the ordinary meaning of the word and determine its appropriateness for the purposes of the Excise Act.

The courts have extensively examined the meaning of 'manufacture' in the context of legislation other than the Excise Act. Whilst it is not possible to directly adopt judicial interpretation of the word as it appears in other legislation, these cases do provide guidance.

In summary, the courts have given the word 'manufacture' the meaning of either producing a thing which is different from its inputs, or bringing a new article into existence by skill or knowledge.[13]

The courts considered processes that involved the application of knowledge, the application of skill, experience, services or labour which results in the conversion of materials into a saleable commodity may fall within the definition of 'manufacture'. The commodity must be different from the inputs which went into making it. In an excise context, the conversion may result in a change in physical and/or chemical properties of goods, for example, in colour, shape, density, viscosity, distillation temperature, composition, texture, aroma or taste.

For more information on the Commissioner's view on manufacture for the purposes of the Excise Act refer to ER 2012/1: Excise the meaning of the expression 'manufactured or produced' for the purposes of the Excise Acts.

The Excise Act and/or Excise Tariff Act 1921 (Excise Tariff Act) specifically exclude certain activities from being excise manufacture. They also exempt certain goods from excise duty.

As a manufacturer licence is only required to manufacture excisable goods, you do not need a manufacturer licence in order to undertake activities specifically excluded from being excise manufacture, or in order to manufacture goods that are specifically exempt from excise duty.

However, it should be noted that just because duty may not ultimately be payable on some goods (because they have a rate of 'free' or are eligible for a full remission of duty), they are nevertheless excisable goods and a manufacturer licence is required in order to lawfully manufacture them.

Exemptions from excise duty

Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) are exempt from excise duty when the fuel is used at the premises specified in a manufacturer licence in the process of manufacturing:

petroleum condensate or stabilised crude petroleum oil; or
liquefied petroleum gas, liquefied natural gas or other hydrocarbons.

This is provided the manufacture of the goods is done in accordance with a manufacturer licence.[14]

Compressed natural gas (CNG) is exempt from excise duty if compressed for use other than as a fuel in a motor vehicle. There are some instances when CNG is compressed for use in a motor vehicle and is also exempt, specifically where CNG is:

compressed other than in the course of carrying on an enterprise or
compressed at residential premises in equipment that is not capable of compressing more than 10 kilograms per hour or an amount per hour specified in the regulations, and provided the CNG is not sold or otherwise supplied in the course of carrying on an enterprise.

CNG is also exempt if it is compressed for use in forklifts or motor vehicles of a kind prescribed in the regulations.[15]

Certain liquid fuels are also exempt from excise duty when used in refining of petroleum condensate or stabilised crude petroleum oil. This exemption applies as these goods are not classified to item 10 of the Schedule to the Excise Tariff Act Schedule). However, fuel for use in an internal combustion engine within a refinery is not exempt.

The blending of fuel is manufacture for the purposes of the Excise Act if the blending is of one or more of the following (with or without other substances):

Petroleum condensate or stabilised crude petroleum oil;

Topped crude petroleum oil;

Refined or semi-refined liquid petroleum products derived from petroleum;

Liquid hydrocarbon products derived through recycling manufacturing or any other process;

Denatured ethanol for use as fuel in an internal combustion engine;

Biodiesel;

LPG;

LNG; or

CNG.[16]

However certain blending of those products is excluded from being manufacture[17]. This is where:

the blending is of goods that have all had duty (customs or excise) paid at the same rate;[18] or
the product is covered by a determination made under subsection 95-5(1)[19] of the Fuel Tax Act 2006 (Fuel Tax Act)[20];
the product is covered by a determination under 77H(4) of the Excise Act;[21]
blends of one type of gaseous fuel where excise or customs duty has been paid on all fuel components of the blend at different rates and no remission has applied to any of the fuel.

Despite the exclusions in 1 & 2 above these do not apply where any of the goods being blended are denatured ethanol for use as fuel in an internal combustion engine or biodiesel.

For more information on fuel blending refer to Chapter 12 - Fuel Blending.

We consider that these common activities in relation to fuel are manufacture:

crude oil and condensate production
petroleum refining
certain blending[22]
recycling[23]
biodiesel manufacture
fuel ethanol manufacture
production of LPG, LNG
production of CNG for transport use

Excise manufacturer licences specify the manufacturing activity or activities permitted. For example, your licence may show approved activities such as:

oil refining
recycling
biodiesel manufacture, etc.

You cannot commence to manufacture excisable fuel products without a licence. This means that you cannot test your manufacturing equipment or produce samples to market to potential buyers if you do not hold a licence.

Imported fuel products are subject to customs duty at a rate that is equivalent to the duty on excisable fuel products. If you intend to use imported fuel products in the manufacture of excisable products you will not need to pay the customs duty if you follow the provisions in the Customs Act. If you have any questions regarding this you should contact the Australian Customs and Border Protection Service (Australian Customs).

However in general, the provisions provide that if your premises are specified in an excise manufacturer licence and also in a Customs warehouse licence you can enter the imported fuel products for warehousing and then use the imported fuel products to manufacture excisable goods. The liability to pay the customs duty on the imported fuel products is extinguished (except for any ad valorem duty that is payable) upon the manufacture of excisable goods.[24] You will then be liable to pay excise duty on the excisable fuel products.

Example 2A:

Michaels Biofuels imports 10,000 litres of biodiesel which it intends to blend with diesel obtained underbond (duty not paid) from a local refiner to produce a B20 blend to be sold into the Australian marketplace.

Michaels Biofuels has a customs warehouse licence for the facility where the biodiesel will be stored. Michaels Biofuels also has an excise manufacturer licence for the same facility.

The biodiesel is entered for warehousing with Customs at the time it is imported using a warehouse declaration entry form.

Michaels Biofuels blends the 10,000 litres of biodiesel with 40,000 litres of locally manufactured diesel and reports the 10,000 litres of biodiesel used in the blend to Customs.

Michaels Biofuels delivers the 50,000 litres of B20 blend into the Australian domestic market in accordance with their periodic settlement permission and pays the excise duty of 50,000 x $0.389 = $19,450.00.

You can only manufacture goods at the premises specified on your licence.[25] We may also give you written directions about what parts of your factory any manufacturing process can be undertaken and where inputs used in manufacture, and excisable fuel products, respectively are to be kept.[26] Under an excise manufacturing licence you are also permitted to store the excisable you manufacture or like goods manufactured by another person at the premises specified in the licence.

Storage licence

If you have a manufacturer licence and wish to store your excisable fuel products underbond at a place that is not specified in your licence you will require a separate storage licence for that place. As fuel blending is considered to be manufacture for excise purposes, storage licences for fuel generally only relate to packaged goods.

If you are in the business of wholesaling and distribution you may wish to store underbond excisable fuel products (whether owned by you or someone else). In either case you would require a storage licence.

Even if you are not the owner of the excisable fuel products, you are still responsible for the security of the goods and may be liable to pay an amount equivalent to the duty if the excisable goods are not kept safely or are not satisfactorily accounted for.

A storage licence will specify the type of excisable fuel products and the location. It will also specify the activities, if any, you can undertake in relation to those goods, and whose excisable goods you can store,[27] for example:

goods you own
goods owned by certain people
storage of underbond product, and
packaging (in bottles, tins, drums).

If you hold a valid manufacturer licence, you do not need a separate storage licence to store goods that you manufacture at those premises. The storage of your manufactured goods, whilst not manufacture in itself, is a normal part of the chain of events in manufacturing goods. This includes storing fuel manufactured by someone else but only if your license allows you to manufacture fuel.

2.3.2 WHAT ARE MY RESPONSIBILITIES AS A LICENCE HOLDER?

You are responsible for the secure storage of all excisable fuel products held on your premises or under your control and must keep or store excisable fuel products only at premises that are specified in your licence.[28]

You may be responsible for paying an amount equal to the excise duty that would have been payable on any stolen, missing or unaccounted for excisable fuel products.[29]

Where, after we take stock of excisable fuel products manufactured, and the materials you use in the manufacturing process, it appears to us that not all the duty that should have been paid has been paid, you must pay the difference between the amount paid and the amount that should have been paid.[30]

If you wish to destroy any excisable fuel products you must first obtain permission from us to do so.

You must not move underbond excisable fuel products, without approval from us. This includes moving excisable fuel products from your licensed premises to any other location or for export.[31]

For more information about obtaining permission to move excisable fuel products refer to Chapter 5 - Movement permissions.

You are also responsible for ensuring that you comply with the Excise Act and all conditions of your licence.[32]

You must keep, retain and produce records in accordance with a direction under section 50 of the Excise Act.

If you are a manufacturer or storage licence holder, you will also need to:

ensure excisable fuel products are only delivered into home consumption with appropriate authority, such as in accordance with a periodic settlement permission or Delivery authority[33]
pay the correct amount of excise duty if you are the owner or manufacturer and you deliver the goods into home consumption[34]
account for excisable fuel products if requested
provide all reasonable facilities to enable us to exercise our powers under the Excise Act,[35] and
provide sufficient lights, correct weights and scales, and all labour necessary for
- weighing material received into your factory
- weighing all excisable goods manufactured in your factory, and
- taking stock of all material and excisable goods contained in your factory.[36]

For more information about duty liability and methods of payment refer to Chapter 6 - Payment of duty.

2.3.3 WHAT ELSE CAN WE DO?

Access

We have the right to enter your licensed premises at any time and can examine and take account of all the goods at the premises.[37] Note: we will usually only seek to enter your premises during normal business hours.

Stop vehicles

We can stop any vehicle leaving your licensed premises and check that there is proper documentation for excisable fuel products leaving the premises. We can question the driver about any goods in the vehicle. We can direct that the vehicle be unloaded and goods taken to particular parts of the premises for further examination. We must not detain a vehicle for longer than is necessary to do the checking.[38]

Search vehicles

We can stop and search any vehicle (not just vehicles leaving a licensed premises) without a warrant if we have reasonable grounds for believing that the vehicle contains excisable fuel products and that the vehicle has been used, is being used or will be used in the commission of an offence under the Excise Act (and certain offences in the Crimes Act 1914 (Crimes Act)[39] and Criminal Code[40] relating to accessory after the fact, attempt to commit an offence, aid and abet someone to commit an offence and conspiracy to commit an offence).[41]

Examine goods

We can open packages and examine, weigh, mark and seal any excisable fuel products that are subject to excise control and, if you are a manufacturer, lock up, seal, mark or fasten any plant in or on your factory.[42]

We can also:

supervise the manufacture of excisable fuel products,[43] and
take samples of materials, partly manufactured excisable fuel products and excisable fuel products subject to excise control, and fuel products that we have reasonable grounds for suspecting are excisable fuel products on which duty has not been paid.[44]

2.3.4 WHAT RECORDS DO I NEED TO KEEP?

Unlike other taxation laws the Excise Act does not have a general record keeping provision. The Excise Act does provide that a licence holder shall:

(a) keep such records and furnish such returns as directed

(b) keep these records for the period directed, and

Any such direction will be in writing and included with your licence. We can amend this direction at any time and will provide written notification of this to you.

We can inspect and take copies of any records kept as directed.

If you cease to hold an excise licence you must still keep all records of your previously licensed activities. Records must be kept for the period of time as directed.

2.3.5 HOW LONG IS MY LICENCE VALID FOR?

Your licence will state its expiry date. When first issued, the licence is valid until the next 30 September two years after the anniversary of the day it is granted.[46]

Example 2B:

If we grant a licence on 15 September 2014, it will expire on 30 September 2016.

If we grant a licence on 15 October 2014, it will expire on 30 September 2017.

Upon renewal, a licence is valid for a further three years starting from the day after the date of expiry of the existing licence, that is, 1 October three years from the year the existing licence expires.

2.3.6 IS MY LICENCE TRANSFERABLE?

Generally you cannot transfer your licence to another individual, business entity or premises. The proposed new licence holder must apply for a new licence. You must also request cancellation of your current licence if you are no longer carrying out an excise activity. It is important that you advise us of any change in advance of it taking effect.

The exception to the above rule arises when a licence holder dies. If this is the case, the licence is taken to be transferred to the person's legal personal representative. This allows for the finalisation of the affairs and, unless cancelled earlier, the licence is taken to be automatically cancelled 3 months after the licence holder dies.[47]

For more information about cancelling licences refer to Chapter 4 - Licensing: Suspension & cancellation.

2.3.7 CAN MY LICENSING INFORMATION BE DISCLOSED?

As well as the protection provided by the Privacy Act, the tax laws have secrecy provisions about using and disclosing taxpayer information. We can only look at, record, discuss or disclose information about you when it is a necessary part of our work, or where the law specifies that we may.

Subdivision 355-B of Schedule 1 to the Taxation Administration Act 1953 (Taxation Administration Act) allows us to record or disclose information about you in certain circumstances. For example, the Excise Act specifically allows us to disclose information about you to Australian Customs.

In relation to licensing information, the Taxation Administration Act specifically allows us to disclose information about:

whether another person holds a current excise licence, and
any conditions that apply to their licence.

Information may be disclosed by taxation officers in the performance of their duties and would cover disclosing information:

to a person dealing or proposing to deal with another person in relation to goods subject to excise control, and
provided we are satisfied that disclosure is necessary for the purposes of ensuring the dealing or proposed dealing is in accordance with excise law.

Example 2C

Raul is licensed under the Excise Act to manufacture biodiesel. Tim also has a licence to manufacture issued under the Excise Act to allow him to blend biodiesel with diesel to produce biodiesel blends. Tim wants to buy 10,000 litres of biodiesel underbond from Raul. Raul contacts us to check that Tim's license to manufacture is still current. We are permitted to divulge details of Tim's licence to Raul to allow Raul to fulfil his obligations under the Excise Act

Example 2D

You need to find additional storage space for your finished fuel products and, therefore, need to check that the entity who offers to warehouse your products has a licence to store excisable fuel products.

If we decide that the disclosure is necessary, we must provide the information in writing to the person who requires it. If the matter is urgent, we may advise by phone. However, we must later confirm the information by letter or fax.

A disclosure may be initiated by us or by you when you request information.

Anyone who receives such information should use it only for the purpose for which it was given. Any other use may be unlawful.

Note: The Privacy Act 1988 (Privacy Act) imposes certain obligations on you concerning the privacy of information that you have received about an individual. Further information can be obtained from the Office of the Australian Information Commissioner.

Our decision in relation to the disclosure of protected information is not a reviewable decision. However you have the right to make a complaint to the Commonwealth Ombudsman about a range of administrative actions we take or the Australian Information Commissioner if you think we have breached the Privacy Act in dealing with your personal information.

For information about your review rights refer to Chapter 8 - Reviews and objections.

2.4 PROCEDURES

2.4.1 HOW DO I REGISTER FOR EXCISE?

You must register for excise before you can be issued with a licence to store or manufacture excisable fuel products.

While it is not compulsory to provide an ABN or TFN for registration, it will help us to process your application.

If you need an ABN, phone 1300 657 162 for a registration pack. You can lodge your completed ABN registration form with your completed excise registration application.

To register for excise, complete an Application for excise registration (NAT 7103).

2.4.2 HOW DO I APPLY FOR A LICENCE?

If you would like to apply for a licence, you should:

contact us, and
lodge an application form together with all the required supporting documents.

To contact us phone 1300 137 290.

Our staff will:

discuss your particular circumstances with you
give you advice about the appropriate licence or licences
explain how to apply
explain your ongoing obligations as a licence holder, and
provide you with a licence application form.

There is no charge or fee for an excise licence.

How do I lodge an application?

You need to complete the relevant form to apply for a manufacturer or storage licence.[48]

Before lodging your application form, make sure you have included the required supporting documents. Your application form contains information to help you work out which supporting documents you must provide. You may also need to complete other excise forms, depending upon your proposed activities.

Supporting documents include:

an accurate plan of the premises that clearly indicates the area for manufacture or storage
a Consent to obtain information - individual (NAT 7112) form, or
a Consent to obtain information - company (NAT 7106) form
a Consent to criminal history record check (NAT 16358), and
an application for permission to move underbond goods.

For more information about movement permissions refer to Chapter 5 - Movement permissions.

You should contact our Licensing staff on 1300 137 290 for advice about the forms and supporting documents that you will need to lodge.

To lodge your completed application form and supporting documents:

fax them to us on 1300 130 916, or
post them to

Excise Licensing Group

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

You must not manufacture or store excisable goods before your licence has been granted.[49]

2.4.3 HOW DO I CHANGE MY LICENCE DETAILS?

We can amend your licence for changes that do not involve a change of entity or physical location. This includes a change of:

business name (that is your trading name)
postal address, or
street name or property address made by a relevant authority.

A change in composition of a partnership does not affect the continuity of that partnership. Any one or more of the partners may act on behalf of the partnership in notifying changes.[50]

You must advise us of any of these changes within 30 days. We will then provide you with an amended licence.

2.4.4 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on licensing matters contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au ,or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

2.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO LICENCES?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products without a manufacturer licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[51]

If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units.[52]

If you manufacture excisable fuel products at premises that are not specified in your licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[53]

Keep or store

If you possess or have custody or control of excisable fuel products without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[54]

False or misleading statements

If you make a false or misleading statement, or an omission from a statement in respect of duty payable on particular goods, to us, a penalty not exceeding the sum of 50 penalty units and twice the amount of duty payable on those goods.[55]

Records

If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units.[56]

Facilities etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units.[57]

If you do not provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into, and all excisable fuel products manufactured in, your factory and for taking stock of all material and excisable fuel products contained in your factory, the maximum penalty is 10 penalty units.[58]

Marks and seals

If we mark or seal excisable fuel products or fasten, lock or seal any plant in your factory and you alter, open, break or erase the mark, seal, fastening or lock, the maximum penalty is 50 penalty units.[59]

2.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol, and
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG)
liquefied petroleum gas (CNG).

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into the home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Home Consumption[60]

'Home consumption' is the term used in the Excise Act and this guide to describe when excisable fuel products are released into the Australian domestic market for consumption. The term used in the legislation is 'deliver for home consumption'.

Normally this will be by delivering the goods away from licensed premises but includes using those goods within the licensed premises (for example using fuel to run equipment in your licensed premises). It does not include goods delivered for export or the movement of goods underbond (see definition below) to another licensed site.

The term 'home consumption' is not defined in the Excise Act and there is no definitive case law that looks at the issue in question. However there are several cases where issues closely related to it are considered.[61]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act and at the time of writing is $210.

Periodic settlement permission (PSP)

Permission granted by us for you to deliver excisable goods from a licensed place into home consumption prior to providing an excise return for the goods and prior to paying the duty. At the end of the period (usually 7 days) you need to give us an excise return specifying all of the excisable goods delivered for the period and you also need to pay the relevant duty.

Section 50 direction

This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, or proprietor of licensed premises, to keep specified records, furnish specified returns, retain records for a specified period and produce those records on demand by us.

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

home

2.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

2.7.1 Excise Act 1901

Section 4 - Definitions

Section 6A - How this Act applies to partnerships

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Part III Division 1 - Manufacturers

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 39 - Applications for licences

Section 39E - Duration of licences

Section 39O - Death of licence holder

Section 46 - Supervision by officers

Section 53 - Responsibility of manufacturers

Section 54 - Liability to pay duty

Section 60 - Persons to keep excisable goods safely etc.

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 62 - Deficiency in duty

Section 77HB - Liquefied petroleum gas and liquefied natural gas that is exempt from excise duty

Section 86 - Officers to have access to factories and approved places

Section 87 - Power to stop conveyances about to leave an excise place

Section 87AA - Searches of conveyances without warrant

Section 91 - Examine all goods

Section 117 - Unlawful possession of excisable goods

Section 106 - Samples

Section 159 - Protection of confidentiality of information

2.7.2 Excise Tariff Act 1921

Section 105B - Extinguishment of duty on excise-equivalent goods

2.7.3 Taxation of Alternative Fuels Legislation Amendment Act 2011

item 1 to 4

2.7.4 Customs Act 1901

2.7.5 Crimes Act 1914

Section 6 - Accessory after the fact

2.7.6 Criminal Code Act 1995

11.1 - Attempt

11.2 - Complicity and common purpose

11.5 - Conspiracy

03 LICENSING: Assessing applications

3.1 PURPOSE

3.2 INTRODUCTION

3.3 POLICY AND PRACTICE

3.3.1 LICENSING CRITERIA

(1) 'Fit And Proper' Person Or Company

(2) Skills And Experience

(3) Physical Security Of The Premises

(4) Suitability Of Plant And Equipment

(5) Market For The Goods

(6) Ability To Keep Proper Books Of Account

(7) Delay Liability For Duty (Storage Licence Only)

(8) Protect the Revenue

3.3.2 WHAT ARE LICENCE CONDITIONS?

Conditions imposed under the Excise Act

Special conditions

3.3.3 WHAT ARE SECURITIES?

3.3.4 ASSESSING YOUR APPLICATION TO RENEW YOUR LICENCE

3.4 PROCEDURES

3.4.1 WHAT HAPPENS IF MY LICENCE IS NOT GRANTED?

3.4.2 WHAT WILL HAPPEN IF MY LICENCE IS GRANTED?

3.4.3 HOW DO I RENEW MY LICENCE?

3.4.4 WHAT DO I DO IF I NEED MORE INFORMATION?

3.5 WHAT PENALTIES CAN APPLY FOR OFFENCES IN RELATION TO MAKING AN APPLICATION?

3.6 TERMS USED

3.7 LEGISLATION (quick reference guide)

3.7.1 Excise Act 1901

3.7.2 Excise Tariff Act 1921

3.7.3 Income Tax Assessment Act 1997

3.7.4 Income Tax Assessment Act 1936

3.7.5 Corporations Act 2001

3.7.6 Crimes Act 1914

3.1 PURPOSE

This chapter deals with:

licensing criteria
licence conditions
securities
assessing your application to renew your licence
what happens if your licence is not granted
what will happen if your licence is granted
how to renew your licence, and
penalties that can apply to offences in relation to making an application.

3.2 INTRODUCTION

The Excise Act 1901 (Excise Act) provides us with the discretion whether to grant or refuse a licence. We base the decision on the information you supply.

However subsection 39A(2) provides that if we consider certain criteria exist they can be the basis for refusal.

In summary those criteria are:

whether you or an associate are not 'fit and proper'
whether you do not have, or have available to you, the skills and experience required to carry out the activity that would be authorised by the licence
the physical security of the premises is not adequate
the plant and equipment to be used at the premises is not suitable
you will not have a market for the goods
you would not be able to keep proper books of account for audit purposes
the grant of a storage licence would delay liability for duty, or
it is necessary to refuse to grant the licence to protect the revenue.

These criteria are explained in more detail below.

How any of these criteria affects a particular licence application depends on the facts in each particular case. There are, however, some criteria that are critical, for instance:

you are not 'fit and proper'
existence of a market, and
protection of the revenue.

3.3 POLICY AND PRACTICE

3.3.1 LICENSING CRITERIA

(1) 'Fit And Proper' Person Or Company[62]

The nature of the entity applying for the licence will affect who is assessed as being fit and proper:

if an individual, the individual is assessed
if a partnership, each partner is assessed, and
if a company, the company is assessed.

Persons other than the applicant can also be assessed as to whether they are fit and proper. These persons are:

another person who would participate in the management or control of the premises that is the subject of the licence application
if the applicant is a company, then any director, officer, or shareholder of the company that would participate in the management or control of the company, and
certain associates of the applicant (associates can be people or companies).

What does fit and proper mean?

The term 'fit and proper' is not defined in the Excise Act or Excise Regulation 2015 (Excise Regulation). Fit and proper is dependant on the purpose of the legislation and the proposed activities of the person concerned. In general, qualities of diligence, honesty and the likelihood of observance of the law are pivotal characteristics to be taken into account in considering fitness and propriety. In an Excise context we are assessing the suitability of the person applying for a licence to have access and control over excisable fuel products.

The Excise Act provides a definitive list of factors that we will take into account in determining whether a person or company is fit and proper. These factors generally relate to:

any prosecution history
solvency
the honesty of information provided by the applicant
compliance with tax obligations, and
licensing history if applicable.

In assessing these factors we will consider whether your circumstances demonstrate that you will be diligent, honest, and likely to observe Excise laws.

A single factor will not necessarily be determinative on its own of whether a person or company is 'fit and proper'. It will depend on the facts and circumstances of each case.

The weight afforded to each factor in reaching a decision about whether a person or company is 'fit and proper' is a matter for us to decide. We are deciding whether the person or company is fit and proper, and will do so after considering all relevant information.

Some factors apply to both individuals and companies; others are specific to individuals or to companies.

Individual or company:

whether, within a year of lodging the application, the person or company has been charged with:
whether, within 10 years of lodging the application, the person or company has been convicted of:
the extent of the person's or company's compliance, within 4 years of lodging the application, with any law administered by us (e.g. income tax, GST)
whether the person has held an excise licence which has been cancelled, or
the person's or company's financial resources.

an offence under the excise legislation, or
an offence under Commonwealth, State or Territory law punishable by imprisonment for one year or longer (for an individual), or by a fine of 50 penalty units or more

an offence under excise legislation, or
an offence under Commonwealth, State or Territory law punishable by imprisonment for one year or longer (for an individual), or by a fine of 50 penalty units or more

Individual only

whether the person has participated in the management or control of a company that has had an excise licence cancelled
whether the person is an undischarged bankrupt
any misleading statement made in the application by the person, or
where any false statement was made in the application - whether the person knew it was false.

False and misleading statements are discussed below in 'Where a person makes false or misleading statements in their application'.

Company only

whether a receiver has been appointed over the property, or part of the property, of the company
whether the company is under administration under the Corporations Act 2001 (Corporations Act)
whether there is a current deed of company arrangement in place under Part 5.3A of the Corporations Act, or
whether the company is being wound up.

Where a person makes false or misleading statements in their application[63]

It is important that you provide information that is accurate and complete. If your application (i.e. your completed application form, any supporting documentation and any oral statements made), contains false or misleading statements we will take this into account.

Misleading statements.

With regard to this element, the term 'mislead' is not defined in the Excise Act. The Australian Oxford Dictionary, 2004, 2^nd edn, Oxford University Press, Melbourne defines 'mislead' as follows:

cause (a person) to go wrong, in conduct, belief, etc.
lead astray or in the wrong direction.

A misleading statement does not have to successfully mislead us, but it can be taken into account if it was reasonably foreseeable that we could have been misled when assessing the application.

Misleading may be by omission as well as what has been said.

Example 3A

You advise us that you have installed a state of the art security system at your premises. While true, you failed to advise us that a design fault has resulted in repeated false alarms to the point where you have switched off the security system and have no intention of re-engaging it. The design fault cannot be remedied. The only security actually in operation at the premises is a rusty padlock.

The information you provided, whilst not false, could lead us to believe that your premises are secure. This is misleading.

False statements

We can only take false statements into account if you knew they were false.[64]

In essence, a statement is false if it is not true. A false statement may be made expressly, or via omission. An example of the former is where you state you have no criminal convictions when in fact you have been convicted. An example of the latter would be to leave the question on your application form in relation to criminal convictions blank when in fact you have been convicted. In both instances, a false statement has been made.

Who are the associates that can be assessed under the fit and proper person test?[65]

To avoid situations where people with a high risk of non-compliance are able to exercise control over licence holders, certain associates can be assessed under the fit and proper person test.

The word associate effectively takes its meaning from the Income Tax Assessment Act 1936 and is summarised below:

An associate of a natural person (other than in the capacity of trustee) includes:

a relative[66]of the individual, for example, their spouse, parent, sibling, uncle or aunt
a partner of the individual or a partnership in which the individual is a partner
if a partner of the individual is a natural person otherwise than in the capacity of trustee, the spouse or child of the partner
a trustee of a trust under which the individual or their associate benefits, or
a company under the control of the individual or their associate.[67]

Although an associate includes a spouse, a legally married spouse of a person who lives separately and apart on a permanent basis is not an associate.[68]

An associate of a company includes:

a partner of the company or a partnership in which the company is a partner
if a partner of the company is an individual, the spouse or child of the partner
a trustee of a trust under which the company or their associate benefits
another entity (a company, partnership, trustee or an individual), or its associate(s) who controls the company, or
another company which is under the control of the company or the company's associate.[69]

The control of a company looks to whether another entity (including individuals):

has sufficient influence over the company, or
holds a majority voting interest in the company.

An associate of a trustee includes an entity or an associate of the entity that benefits or is capable of benefiting either directly or indirectly under the trust.[70]

For a partnership an associate includes each partner of the partnership or associate of the partner.[71]

(2) Skills And Experience[72]

The next criterion for licensing relates to skills and experience.

Skills and experience are not defined in the Excise Act or Excise Regulations. There is no Excise case law regarding skills and experience.

In forming an opinion as to whether you have the required skills and experience we will consider your ability to:

carry out the activity requiring a licence
conduct a business, and
comply with excise obligations.

It is important to note that you, as the applicant, do not necessarily need to possess the skills and experience yourself provided that you can demonstrate that you will use another person's skills and experience, for example by hiring them or using a consultant. Should that be the case, we will assess the other person's skills or experience.

Example 3B

Mr X, as a Director of Z Transport and Logistics Pty Ltd, applies for a storage licence.

Neither Mr X nor any of his staff have the skills and experience to comply with the company's excise obligations. This poses a risk that excisable fuel products may be sold without adequate record keeping, and may adversely affect revenue and compliance.

Therefore, when assessing this element of subsection 39A(2) in isolation, Z Transport and Logistics Pty Ltd would fail the requirements of skills and experience. However, a decision on granting a licence is made based on an assessment of all elements of subsection 39A(2).

Z Transport and Logistics Pty Ltd may choose to address the deficiency in skills and experience by such measures as appointing a Manager who has the relevant skills and experience.

(3) Physical Security Of The Premises[73]

Physical security relates to measures that prevent unauthorised access to excisable fuel products and thus protects against theft or loss of goods and excise revenue.

In forming an opinion about the physical security at the premises, we will consider:

the nature of the site
the kinds and quantities of goods to be kept, and
the procedures and methods adopted to ensure the security of goods .

Consideration of the nature of the site can include:

construction (for example floor, walls, ceiling, windows and doors) and whether material is difficult to penetrate or remove
barriers (for example fences or wire) to a standard that would prevent unauthorised access
locks and bars
alarms, security lighting, security guard patrols or closed-circuit TV cameras
physical security of all warehouse facilities within the site, and
fire alarms, smoke detectors, sprinklers etc.

Consideration of the kind and quantity of goods to be kept at the site can include:

the ease with which goods can be handled, for example, bottles of spirits are easier to move than fuel in a large refinery tank
the rate of excise duty applicable to the goods (goods that attract a greater rate of excise duty represent a greater revenue risk), and
the greater the quantity of excisable goods to be dealt with, the higher the level of physical security that would be required.

Consideration of the security procedures and methods can include:

gate security system that would identify all people entering and leaving the site, and confirm their right to do so
gate security system that would identify the type and quantity of all goods entering and leaving the site
surveillance system
procedures to handle and retain information from surveillance system (if there is one)
access control, for example by limited distribution of keys and access swipe cards or codes
security responses when breaches are detected, for example back to base system, and
an independent security audit function to oversee all of the above.

(4) Suitability Of Plant And Equipment[74]

Plant and equipment are considered suitable if they are capable of performing the intended tasks and will allow you to properly account for excisable fuel products and calculate the correct amount of excise duty.

Plant and equipment that are used in relation to goods at licensed premises include:

temperature measuring equipment
storage tanks
weighing equipment e.g. scales and weighbridges, and
volume measuring equipment.

(5) Market For The Goods[75]

In this criterion, we are primarily concerned with the presence of an available market within Australia. That market must be legal. Licensing is concerned with minimising the risk of excisable fuel products entering an illicit market in Australia and the resultant loss of revenue.

You must provide sufficient information to identify your proposed market.

You may be able to demonstrate that you have a market by, for example, supplying:

evidence of contracts (including 'in principle' contracts) you have negotiated, or
a business plan which outlines the market you have identified.

A legitimate market may exist overseas for locally manufactured excisable fuel products. Applications relating to overseas markets may be subject to additional scrutiny and you may be required to provide additional information or documentation as evidence of the legitimacy of your overseas market.

Therefore, market should be taken to mean that there exists a proven or demonstrated demand for a commodity, or an opportunity for (legally) buying or selling (trading in) a specified commodity. In such cases a market can be either in Australia or overseas.

If you intend to manufacture excisable goods and use them within the operation of your business, or entirely for personal (non-commercial)[76] use, you do not need to meet the market test.

Examples of this situation are:

a farmer who produces biodiesel to use in his farm equipment
a person who produces biodiesel for their personal non-commercial use.

(6) Ability To Keep Proper Books Of Account[77]

This criterion is whether you can keep 'proper books of accounts and records' that enable us to audit those records. It is your ability to keep the required records that must be determined.

You may be asked to demonstrate:

the recording systems you intend to use, whether they are manual or electronic
where an electronic record keeping system is used, systems documentation showing details such as screens, reports available and security controls, and
the internal documentation supporting the recording systems, ensuring that the recording systems will record sufficient detail.

(7) Delay Liability For Duty (Storage Licence Only)[78]

This criterion only relates to an application for a storage licence where the granting of the licence would delay liability for duty.

The liability for excise is imposed on goods at the time of manufacture.[79] However, it is not actually paid until a later point.

The wording in paragraph 39A(2)(k) "...delay the liability for duty" suggests that one is able to delay the point in time in which the liability arises. However, this is not possible as the imposition of excise, and therefore the time at which the liability arises, is not dependent on any further dealings or processes on those goods. It is only the payment of the liability, the duty, which can be delayed depending on how the goods are dealt with.

We consider that the only possible interpretation of section 39A(2)(k) is that it operates to delay the time the liability must be paid. A storage licence allows for the storage of excisable goods on which duty has not been paid. It effectively allows a manufacturer to defer the payment or transfer the liability to a storage licence holder. The question then arises as to how far down the distribution chain payment of an excise liability may be deferred.

It is our view that we may refuse to grant a storage licence where the grant of the licence would delay payment of duty beyond the point of storage occurring in the normal wholesale distribution of the goods. Using a different perspective, we may refuse to grant a storage licence when refusal is necessary to ensure that excise duty is paid before goods reach the retail level in the distribution chain.

In forming an opinion as to whether the granting of an excise storage licence would delay liability for duty, we will consider:

the purpose for which the goods are to be stored, and
whether the premises in question are for storage occurring in the normal wholesale distribution of the goods, or for storage beyond the normal wholesale distribution of the goods (for example, storage for a retail premises).

(8) Protect the Revenue[80]

The term 'necessary to protect the revenue' is not defined in the Excise Act.

The meaning of 'protect the revenue' was considered by Deputy President Forgie in Martino and Australian Taxation Office.[81] She said:

' 50. ... The expression "protect the revenue" is not defined in the Act and I am not aware of any authorities that have considered it. The word "revenue" has been considered in Stephens v Abrahams (1902) 27 VLR 753 by Hodges J. ...Hodges J took:

"... the 'revenue' to be moneys which belong to the Crown, or moneys to which the Crown has a right, or moneys which are due to the Crown,

The ordinary meanings of the word "protect" include "keep safe, take care of" ... and they would seem to be the senses in which the word is used in the expression "protect the revenue". Mr Martino's licence may only be cancelled if it is necessary to take care of the money belonging to the Crown in right of the Commonwealth. That has the aspect of ensuring that the Commonwealth receives all that it should in the form of any excise that is ultimately payable in respect of tobacco originally grown on Mr Martino's farm and keeps all that it receives. It also has the aspect of not spending more of the Commonwealth's money than need be spent in carrying out its supervisory duties and responsibilities under the Act and in ensuring that the tobacco is not marketed illegally in Australia, and so avoid the payment of excise duty, if it cannot be marketed legally.

What is meant by the word "necessary"? I have taken the view that the meaning adopted by Allen J in State Drug Crime Commission of NSW v Chapman (1987) 12 NSWLR 447:

"As to the word 'necessary' it does not have, in my judgment, the meaning of 'essential'. The word is to be subjected to the touchstone of reasonableness. The concept is one as to what reasonably is necessary in a commonsense way.'

While this case was in relation to tobacco, the finding is equally applicable to fuel. 'Protect the revenue' therefore means ensuring that the Commonwealth receives the full amount of excise duty that is ultimately payable and we do not spend more Commonwealth funds than necessary to carry out our responsibilities.

3.3.2 WHAT ARE LICENCE CONDITIONS?

Licence conditions form part of your licence. They are restrictions, limitations or modifying circumstances. They may define permissible activities and require you to take certain actions if defined circumstances arise. If you fail to comply with a condition, we may suspend or cancel your licence.[82]

For information about when we can suspend or cancel your licence refer to Chapter 4 - Licensing: Suspension & Cancellation.

All excise licences are subject to certain conditions imposed by:

the Excise Act, and
us ('special conditions').

We are able to add, vary or modify special conditions even after the licence has been granted. [83]We will notify you in writing if we do so and provide you with an amended licence that includes the amended conditions.

Conditions imposed under the Excise Act

You must advise us in writing within 30 days if:[84]

you or any person participating in the management or control of a licensed company or premises is charged with or convicted of:
you become bankrupt
a person not listed in the licence application starts to participate in the management or control of the licensed premises or company, as the case may be
there is a change in the membership of a partnership that holds a licence
a company that holds a licence comes under receivership, administration or begins to be wound up
there is a change that substantially affects the physical security of the licensed premises or plant and equipment used in relation to excisable goods at the premises
you hold a manufacturer licence and you cease to manufacture excisable goods at the licensed premises, or
you hold a storage licence and you cease to keep and store goods at the licensed premises.

an offence against a provision of the Excise Act, or
an offence against a law of the Commonwealth, a State or a Territory that is punishable by imprisonment for a period of one year or longer or by a fine of 50 penalty units or more

Special conditions

We can also impose special conditions on your licence if we find it necessary to protect the revenue or ensure compliance with the Excise Act.[85] Examples of conditions that have been imposed under this provision are:

the trustee for a trust to notify the Collector of the appointment of a new trustee in writing and prior to the appointment of the new trustee
restrict the storage of excisable goods (by a storage licence holder) to ship's stores and aircraft's stores, and/or
restrict the quantity of excisable goods that a licensed manufacturer may manufacture.

The examples of special conditions given above are only for illustrative purposes. The decision to impose special conditions is considered on a case by case basis.

You can apply to have these special conditions varied, revoked or added. We will consider and advise you of our decision.

If you are not satisfied with our decision, you can ask for a review by lodging an objection within 60 days of the day we notify you.[86]

For more information about your review rights refer to Chapter 8 - Reviews and objections.

3.3.3 WHAT ARE SECURITIES?

We can use special conditions as a mechanism to increase the level of protection of the revenue or to ensure compliance with the Excise Act. However, prior to granting the licence we may also require you to provide a security to achieve the same result. Even if we don't require a security prior to the granting of the licence, we may ask for a security at a later time. We can also ask you to increase the value of any security you may already have given.[87]

A security can be a bond, guarantee, cash deposit or similar financial product for an amount of money which may be forfeited if there is a failure to comply with the Excise Act. It is not necessary for a liability to arise as a result of the failure to comply, for the security to be forfeited. There is no statutory limit to the amount of a security but the amount is generally set by reference to the level of revenue at risk.

We cannot apply these securities against other tax debts.

We review securities every three years, at which time they may be extended, revised or cancelled.

The decision to require a security is not reviewable under the objection process. However, there may be other avenues for review, for example you may seek an informal review of our decision.

For information about your review rights refer to Chapter 8 - Reviews and objections.

3.3.4 ASSESSING YOUR APPLICATION TO RENEW YOUR LICENCE

Licences are only valid for a specified period. Renewal of a licence is not automatic and you must apply to renew your licence before it expires. In assessing an application to renew a licence we consider the same criteria that exist for cancelling a licence. That is, if reasons exist for us to cancel your licence (assuming that it had not expired) then we may decide not to renew your licence.

For more information about the criteria for cancelling a licence refer to Chapter 4 - Licensing: Suspension & cancellation.

If you have applied before the date of expiration on your licence but we have not made a decision by this date, the licence remains in force until such time as we do make a decision.

If we refuse your licence renewal, you may object to the decision.

For more information about your review rights refer to Chapter 8 - Reviews and objections.

As an alternative to non-renewal of a licence, we may:

alter existing conditions on your licence
impose new conditions, or
require you to provide a financial security.

If you have not applied to renew your licence when the licence expires on 30 September, you can no longer carry out excise related activities.

3.4 PROCEDURES

3.4.1 WHAT HAPPENS IF MY LICENCE IS NOT GRANTED?

If we do not grant a licence, we will notify you of the decision and provide you with an explanation for our decision.

If you are not satisfied with our decision, you can ask for a review by lodging an objection within 60 days of the day we notify you.[88]

For more information about your review rights refer to Chapter 8 - Reviews and objections.

3.4.2 WHAT WILL HAPPEN IF MY LICENCE IS GRANTED?

If we grant you a licence, we will post it to you. All special conditions will form part of the licence. We will also provide you with an establishment number for the premises specified on your licence. This will be needed in some of your dealings with us.

You may receive a visit or phone call from us to see whether you understand your obligations or need further assistance to comply.

3.4.3 HOW DO I RENEW MY LICENCE?

We will send you an invitation to renew your licence at least six weeks before the licence expires. We will also send an application form containing your details. You must verify the details on the application, provide any required information, sign and return it to us before your licence expires.

Your existing licence will remain valid until we make a decision about your application for renewal.[89]

Licences are renewed for a period of three years.

Example 3C

Your licence is due to expire on 30 September 2014 (the expiry day). On 1 September 2014 you apply to renew the licence. We have not decided the application by the end of 30 September 2014.

The licence continues in force automatically past 30 September 2014 until we decide the application.

On 15 October 2014 we decide to renew the licence. The renewed licence expires on 30 September 2017.

If you wish to renew your licence but you have not received an invitation to renew within four weeks of the date of expiry you need to contact us.

3.4.4 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on licensing matters contact us as follows:

phone 1300 137 292
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

3.5 WHAT PENALTIES CAN APPLY FOR OFFENCES IN RELATION TO MAKING AN APPLICATION?

The following are the penalties that may apply after conviction for an offence.

False or misleading statements

3.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG), and
liquefied petroleum gas (LPG).

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

3.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

Part 5.3A - Administration of a company's affairs with a view to executing a deed of company arrangement

3.7.6 Crimes Act 1914

4.3.1 WHAT HAPPENS IF I CEASE MY EXCISE BUSINESS?

04 LICENSING: Suspension & cancellation

4.1 PURPOSE

4.2 INTRODUCTION

4.3 POLICY AND PRACTICE

4.3.2 WHEN CAN YOU SUSPEND AND/OR CANCEL MY LICENCE?

4.4 PROCEDURES

4.4.1 SERVICE OF NOTICES

4.4.2 WHAT DO I DO IF I NEED MORE INFORMATION?

4.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO SUSPENSIONS AND CANCELLATIONS

4.6 TERMS USED

4.7 LEGISLATION (quick reference guide)

4.7.1 Excise Act 1901

4.7.2 Excise Tariff Act 1921

4.7.3 Crimes Act 1914

4.1 PURPOSE

This chapter deals with:

what happens when you cease your business
when your licence can be suspended or cancelled
service of notices, and
penalties that can apply to offences in relation to suspensions and cancellations.

4.2 INTRODUCTION

Your licence remains in force until it expires or is cancelled. However, activities approved under your licence may be restricted if we suspend your licence. Suspension may be a temporary measure or may lead to the cancellation of your licence.

We can cancel your licence if:

you ask us to do so (for example, where you intend to cease business), or
we make a decision to do so because one or more of the following criteria are present:
- you or an associate are not 'fit and proper' as an individual or company
- a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person
- a person who participates in the management or control of the premises is not a 'fit and proper' person
- you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence
- the physical security of the premises is inadequate
- the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises
- you have no market for the goods covered by the licence
- you are not keeping proper books of account for audit purposes
- you have breached a condition of your licence
- you have made a false or misleading statement to us[91]
- suspension is necessary for the protection of the revenue, or
- if you are the holder of a manufacturer licence or storage licence, suspension is necessary to ensure you comply with excise law.

4.3 POLICY AND PRACTICE

4.3.1 WHAT HAPPENS IF I CEASE MY EXCISE BUSINESS?

Your licence conditions require you to notify us within 30 days if you permanently cease activities that require an excise licence. To finalise your excise obligations you must request in writing a cancellation of your licence.

Before we can cancel your licence we must be satisfied that you no longer have any excisable fuel products. To be satisfied of this we may:

arrange a final audit of goods at the licensed premises, and
work out if you are liable to pay any excise duty.

Although your licence conditions require you to notify us within 30 days of cessation of activities, you are encouraged to notify us at the earliest opportunity. This will enable us to assist you to check your records and any stock on hand prior to closure of the site for excise purposes.

If you want to sell your business with the stock included, we can coordinate your licence cancellation with the licence approval for the new owner. (This does not mean that the new owner will automatically be granted a licence). This will ensure the premises and goods are covered by a licence at all times.

If you do not intend to sell the goods with your business, you can:

pay any outstanding excise duty on goods held at the licensed premises and then dispose of them as you wish, or
move the goods to another licence holder's premises, provided you have permission from us to move goods to those premises.[92]

We will cancel your licence by giving you written notice.[93]

4.3.2 WHEN CAN MY LICENCE BE SUSPENDED AND/OR CANCELLED?

What is the difference between suspension and cancellation?

Suspension of a licence is a temporary measure we may take that limits the activities you can undertake during the period of suspension. It could be followed by cancellation of the licence or revocation of the suspension. Cancellation is a permanent measure which has the effect of prohibiting you from undertaking the activities for which you were previously licensed.

When can my licence be suspended or cancelled?

We can suspend or cancel your licence if we have reasonable grounds for believing:[94]

you are not 'fit and proper' as an individual or company*
a director, officer or shareholder who participates in the management or control of the company is not a 'fit and proper' person*
a person who participates in the management or control of the premises is not a 'fit and proper' person*
you are an associate of a person or a company that is not 'fit and proper'*
you do not have, or have available to you, the skills and experience required to carry out the activity authorised by the licence*
the physical security of the premises is inadequate*
the plant and equipment used at the premises are such that there is inadequate protection of the revenue in relation to the goods at the premises*
you have no market for the goods covered by the licence*
you are not keeping proper books of account for audit purposes
you have breached a condition of your licence
you have made a false or misleading statement to us
suspension is necessary for the protection of the revenue*, or
if you are the holder of a manufacturer licence or storage licence, suspension is necessary to ensure that you comply with excise law.

* For an explanation of these criteria, please refer to section 3.3.1 - Licensing criteria in Chapter 3 - Licensing: Assessing applications.

The criteria which have not been the subject of previous considerations are covered below:

you are not keeping proper books of account for audit purposes. For this criterion, we are assessing your actual record keeping practices during the licence period and whether they are in an adequate state for an audit.

you have breached a condition of your licence. A breach means you have not complied with a condition. In deciding whether or not to suspend we will take into account the following:
1. the severity of the breach
2. the circumstances surrounding the breach, and
3. what the condition is (i.e. the risk it is addressing).

you have made a false or misleading statement to us. In considering your initial application the false or misleading statements we take into account are in your application. Once you have been granted a licence we can take into account any statements (including for example in a return, letter or response to a question) you have made in relation to your excise activities.

suspension is necessary to ensure you comply with excise law. Where we consider that you are not complying with your obligations under the Excise Act 1901 (Excise Act), for example, if you have been manufacturing excisable fuel products in contravention of your manufacturer licence.[95]

What happens if my licence is suspended?

If we believe your conduct warrants consideration of suspension of your licence we will generally advise you of our concerns and provide you with an opportunity to rectify the issues identified.

If we decide to suspend your licence, this will be done by serving a Notice of suspension. The notice may be served on you, or given to a person who appears to participate in the management or control of the licensed premises.

A Notice of suspension will state that, if you want to stop the cancellation of your licence, you must provide us with a written statement, within seven days of the notice being served, giving reasons why your licence should not be cancelled. We will include our reasons for deciding to suspend your licence with the Notice of suspension.

The notice will also state when the suspension takes affect, which could be immediately.

When your licence is suspended, unless you have written permission from us, it is against the law to:

if you are the holder of a manufacturer licence, manufacture excisable fuel products, or
if you are the holder of a storage licence, keep or store excisable fuel products at licensed premises.[96]

During the period of suspension we may give you written permission to:[97]

keep or store goods at your licensed premises
carry out a process at your premises, or
move goods from your premises to another place.

As a result of a suspension, we may:

require the owner (you or a third party) of excisable fuel products to move the goods from your premises to another place
require payment of any costs incurred by us as a result of the suspension
carry out a stocktake so that the total excise liability is known, and
take control of your licensed premises and any excisable fuel products stored at these premises.

If we suspend your licence we have 28 days to cancel your licence. During this period we can revoke the suspension if you satisfactorily address the issues which led to the suspension. If we revoke a licence suspension we will do so in writing. We may impose additional conditions or allow you to resume your excise activities under the existing conditions.

All decisions relating to the suspension of a licence are reviewable by lodging an objection.

For more information about your review rights refer to Chapter 8 - Reviews and objections.

What happens if my licence is cancelled?

We can cancel your licence for the same reasons we can suspend your licence.

We can cancel your licence without previously suspending your licence. This may occur where we consider the issues require immediate action. For example systemic delivery of excisable fuel products without payment of required duty.

If we cancel your licence we will serve you with a Notice of cancellation. If we cancel your licence, you are not permitted to manufacture or store excisable fuel products. You are also not permitted to move excisable fuel products without our permission.

The notice may be served on you, or given to a person who appears to participate in the management or control of the licensed premises. We will include our reasons for deciding to cancel your licence with the Notice of cancellation.

At the same time, we will serve the owner of the excisable fuel products (whether that is you or someone else) notice in writing to either:

pay the duty on the goods, or
move the goods to another place in accordance with our permission.

This notice is served in the same manner as the Notice of cancellation.

If the owner does not comply with the notice to pay duty or move the goods, we may remove them from the owner's control. If, after six months, the owner has not:

lodged a written claim for the goods, or
paid the duty and other movement and storage related expenses

then we may sell or dispose of the excisable fuel products.[98]

If we cancel your licence, you must retain all records that you have been directed to keep, for the period you have been directed.

If you are not satisfied with our decision to cancel your licence or dispose of your excisable goods, you can request a review of our decision by lodging an objection.[99]

For more information about your review rights refer to Chapter 8 - Reviews and objections.

Can I apply for another licence if I have had a licence cancelled?

Yes, you can apply for another licence. However we will take the reasons for the cancellation into account when considering any new application.

4.4 PROCEDURES

4.4.1 SERVICE OF NOTICES

Notices of suspension or cancellation and directions to deal with excisable fuel products will be served either:[100]

personally or by post[101] on you, or
personally on a person who, at the time the notice is served, appears to participate in the management or control of the licensed premises.

4.4.2 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on suspension or cancellation of a licence contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

4.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO SUSPENSIONS AND CANCELLATIONS

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products when your manufacturer licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[102]

Keep or store

If you store excisable fuel products when your storage licence is suspended, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[103]

Remove

If your licence has been cancelled or expired you must not remove excisable fuel products on which duty has not been paid. The penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[104]

4.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG), and
liquefied petroleum gas (LPG).

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

4.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

4.7.1 Excise Act 1901

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 39G - When the Collector may suspend a licence

Section 39J - Method of suspension

Section 39K - Activities that are prohibited during suspension

Section 39L - Cancellation of licences

Section 39M - Removal of goods on cancellation etc. of licence

Section 39N - Removal of goods by Collector on cancellation etc. of licence.

Section 39P - Service of notices

Section 39Q - Review of decisions

4.7.2 Excise Tariff Act 1921

4.7.3 Crimes Act 1914

5.3.1 WHAT DIFFERENT PERMISSION TYPES ARE THERE?

05 MOVEMENT PERMISSIONS

5.1 PURPOSE

5.2 INTRODUCTION

5.3 POLICY AND PRACTICE

5.3.2 CAN I GET A MOVEMENT PERMISSION?

5.3.3 WHAT IS INCLUDED IN A MOVEMENT PERMISSION?

5.3.4 DOES THE RECEIVING PREMISES HAVE TO BE LICENSED?

5.3.5 WILL I NEED TO PAY A SECURITY?

5.3.6 WHAT HAPPENS WHEN MY MOVEMENT PERMISSION IS GRANTED?

5.3.7 WHAT ARE MY RESPONSIBILITIES?

5.3.8 WHAT HAPPENS IF MY APPLICATION IS NOT APPROVED?

5.3.9 WHEN AND HOW CAN A MOVEMENT PERMISSION BE REVOKED OR CANCELLED?

5.4 PROCEDURES

5.4.1 HOW DO I APPLY FOR A MOVEMENT PERMISSION?

5.4.2 HOW DO I AMEND MY CONTINUING MOVEMENT PERMISSION?

5.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

5.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO MOVEMENT PERMISSIONS?

5.6 TERMS USED

5.7 LEGISLATION (quick reference guide)

5.7.1 Excise Act 1901

5.7.2 Excise Tariff Act 1921

5.7.3 Crimes Act 1914

5.7.4 Acts Interpretation Act 1901

5.1 PURPOSE

This chapter deals with:

why you need a movement permission
different movement permission types
whether you can get a movement permission
what is included in a movement permission
whether the receiving premises have to be licensed
whether you will need to pay a security
what happens when your movement permission is granted
your responsibilities
what happens if your application for a movement permission is not approved
when and how a movement permission can be revoked or cancelled
how to apply for a movement permission
how to amend a continuing movement permission, and
penalties that can apply to offences in relation to movement permissions.

5.2 INTRODUCTION

Under the excise system, control of goods from the time of creation to the point of authorised delivery of the goods into home consumption, or export, lies with the Commissioner. To maintain this control, the Excise Act 1901 (Excise Act) requires that excisable goods are not to be moved without permission.[105]

We refer to this form of permission as a movement permission. It is a permission we provide in writing that authorises you to move specified goods from a specified place to another specified place without excise duty being payable.[106] This permission may be subject to conditions.

The permission holder retains responsibility for any excise liability arising on the excisable fuel products until they are taken up into the stock of the new premises.

5.3 POLICY AND PRACTICE

5.3.1 WHAT DIFFERENT PERMISSION TYPES ARE THERE?

Depending on your circumstances, you may apply for a permission to move excisable fuel products once (single permission) or on a continuing basis (continuing permission). Continuing permissions are used where you have a need to move excisable fuel products in a regular pattern (for example, a delivery each week to the same premises). A single permission is used when movements are not to a continuing or regular pattern to the same premises.

There are four types of movement permission:

Single movement permission (non-export) - a permission to move excisable fuel products from one specified place to another specified place (effective for one movement)
Continuing movement permission (non-export) - a permission to move excisable fuel products of a kind specified from one specified place to another specified place on a continuing basis
Single movement permission (export) - a permission to move excisable fuel products to a place of export (effective for one movement), or
Continuing movement permission (export) - a permission to move excisable fuel products of a kind specified to a place of export on a continuing basis.

An export movement permission is not an authority to export. You must obtain this separately from Customs.

5.3.2 CAN I GET A MOVEMENT PERMISSION?

You can be granted a movement permission if you are the owner of:

the licensed place from where the goods are despatched or
the licensed place where the goods are received.

You can also be granted a movement permission if you are the owner of the goods even if you do not hold a current excise licence.

5.3.3 WHAT IS INCLUDED IN A MOVEMENT PERMISSION?

Each movement permission we approve contains three parts:

The permission

This specifies

the permission holder, and
the goods by tariff item or general description that can be moved under the permission.

The conditions

Movement permissions can be subject to conditions that are necessary to protect the revenue or ensure compliance with the Excise Act. In general, the conditions listed below are considered necessary to do that.

As a standard condition, you must provide to both the despatching and receiving premises a consecutively numbered document with each movement of goods that specifies:

the despatching premises and destination
the date of despatch
the number and type of packages
a description of the goods
a statement that the goods are underbond, and
any other information necessary to permit the goods to be dealt with at the destination.

A condition can also have a restriction limiting the volume of goods that can be moved within a specific period of time, or at any one time.

The schedule

This specifies:

the premises from which the goods can be removed
the premises to which the goods can be moved, and
for single movement permissions, the period or dates in which the goods may be moved.

If you own both the licensed premises between which goods are being moved, the schedule may not specify all these details but only that any movement of goods between premises licensed to you is approved.

The type of goods may be expressed generally (for example 'excisable goods', or 'excisable fuel products') or specifically, by tariff item number or description.

A single movement permission will specify the kind and quantity of the goods that can be moved, for example 100,000 litres of diesel classified to excise tariff subitem 10.10.

5.3.4 DOES THE RECEIVING PREMISES HAVE TO BE LICENSED?

Generally, the receiving premises should be licensed. However, we may authorise underbond movement of goods to an unlicensed 'specified place', for example a waste destruction facility.

5.3.5 WILL I NEED TO PAY A SECURITY?

Prior to granting a movement permission, we may also require you to provide a security to protect the revenue or ensure compliance with the Excise Act. Even if we don't require a security prior to the granting of the movement permission, we may ask for a security at a later time. We can also ask you to increase the value of any security you may already have given.[107]

A security can be a bond, guarantee, cash deposit or similar financial product for an amount of money which may be forfeited if there is a failure to comply with the Excise Act. It is not necessary for a liability to arise as a result of the failure to comply, for the security to be forfeit. There is no statutory limit to the amount of a security but the amount is generally set by reference to the level of revenue at risk.

As part of assessing your application for a movement permission, we will decide whether you must provide a security. We will take into account:

whether you currently hold an excise licence
whether the despatching and receiving premises are licensed
the type of goods involved
the amount of the liability on the goods
the tax compliance record of
- the applicant for the permission
- the despatching premises
- the receiving premises, and
the susceptibility of the goods to be lost or diverted into home consumption without the payment of duty.

We cannot apply these securities against other tax debts.

We review securities linked to continuous movement permissions every three years, at which time they may be extended, revised or cancelled. Compliance with a single movement permission is assessed on completion of the movement of the excisable goods covered by the permission.

The decision to require a security is not a reviewable decision under the objection process. However, there may be other avenues for review, for example you may seek an informal review of our decision.

For information about your review rights refer to Chapter 8 - Reviews and objections.

5.3.6 WHAT HAPPENS WHEN MY MOVEMENT PERMISSION IS GRANTED?

When your movement permission is granted, it will be sent to you. You can then move your goods in accordance with the schedule. You will need to keep appropriate records to track the movement of your goods.

5.3.7 WHAT ARE MY RESPONSIBILITIES?

Where you have had possession, custody or control of goods we may request you (the permission holder) to account for the goods. If you are able to demonstrate that the goods have been lawfully moved under a movement permission, this will be considered a satisfactory accounting. It is important that you keep good records of any movement of goods both to and from your premises.

If you cannot satisfactorily account for the goods or failed to keep them safe, we may demand an amount equal to the duty that would have been payable on the goods.[108]

The permission holder is accountable for the goods:

from the time they are removed from the despatching premises, and
until they are delivered to the receiving premises and taken up into stock.

Accountability then transfers to the receiving premises. If the permission holder is the owner of the receiving premises then transfer of accountability occurs when the goods leave despatching premises. If the permission holder owns the goods but is not licensed, then they would generally be accountable for the goods from the time they are removed from the despatching premises until they are delivered to the receiving premises and taken up into stock.

If there is a discrepancy between the quantity shown in the delivery documentation and the physical quantity received you should contact us.

In the exceptional case where the goods are moved to unlicensed premises, accountability for the goods remains with you, as the permission holder.

5.3.8 WHAT HAPPENS IF MY APPLICATION IS NOT APPROVED?

If we do not approve your application for a movement permission, or to amend your existing movement permission, we will notify you in writing. If you are not satisfied with our decision, you can ask us to review it. You will not be able to move the goods to the place nominated in the application without first paying the excise duty.

For information about your review rights refer to Chapter 8 - Reviews and objections.

5.3.9 WHEN AND HOW CAN A MOVEMENT PERMISSION BE REVOKED OR CANCELLED?

A continuing movement permission remains in effect until it is revoked or cancelled.[109]

We can cancel your movement permission if:

you ask us to do so
we consider that there is a risk to the revenue, or
we have cancelled the licence of the receiving or despatching premises and this is the only premises listed on the permission.

If we decide to cancel your movement permission, we will notify you in writing. The cancellation will take effect from the time:

you are served with the cancellation notice, or
specified on the cancellation notice.

A decision to revoke or cancel a movement permission is not a reviewable decision.

For information about your review rights refer to Chapter 8 - Reviews and objections.

5.4 PROCEDURES

5.4.1 HOW DO I APPLY FOR A MOVEMENT PERMISSION?

To apply for a movement permission, you should complete the relevant form, available on our website.

If you do not have control of the proposed receiving premises (licensed or unlicensed), we require you to obtain a letter from the operator of these premises stating that they will accept responsibility for the underbond goods when received. The application forms contain details of the statement required from the operator of the receiving premises.

If you need to deliver goods to new premises within specified periods please ensure that you allow sufficient time for your application to be determined. Generally, we will make a decision on your application within 28 days unless we need further information.

5.4.2 HOW DO I AMEND MY CONTINUING MOVEMENT PERMISSION?

If you wish to amend your existing continuing movement permission (for example, change the schedule of receiving premises), you must send us either:

a new application form with the amending details, or
a letter including the permission number and necessary changes.

If you wish to add new receiving premises to your existing permission, you must also provide us with a letter from the operator of the receiving premises accepting responsibility for the underbond goods when received. The application form contains details of the statement required from an operator of the receiving premises.

We will consider your request and send you a new or amended permission if approved. In the meantime you cannot move goods outside your current permission.

5.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on movement permissions contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

5.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO MOVEMENT PERMISSIONS?

The following are the penalties that may apply after conviction for an offence.

Move

If you move excisable fuel products without a movement permission[110], or contrary to your movement permission[111],the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.

5.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG), and
liquefied petroleum gas (LPG).

Home Consumption[112]

'Home consumption' is the term used in the Excise Act and this guide to describe when excisable fuel products are released into the Australian market for consumption. The term used in the legislation is 'deliver for home consumption'.

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

5.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

5.7.1 Excise Act 1901

Section 16 - Right to require security

Section 17 - Form of security

Section 18 - General security may be given

Section 19 - Cancellation of bonds

Section 20 - New sureties

Section 21 - Form of security

Section 22 - Effect of security

Section 60 - Persons to keep excisable goods safely

Section 61A - Permission to remove goods that are subject to the CEO's control

5.7.2 Excise Tariff Act 1921

5.7.3 Crimes Act 1914

Section 33 - Exercise of powers and duties

5.7.4 Acts Interpretation Act 1901

06 PAYMENT OF DUTY

6.1 PURPOSE

6.2 INTRODUCTION

6.3 POLICY AND PRACTICE

6.3.1 WHEN IS DUTY PAYABLE?

6.3.2 WHEN IS DUTY PAYABLE UNDER A PERIODIC SETTLEMENT PERMISSION?

6.3.3 WHEN IS DUTY PAYABLE UNDER PREPAYMENT OF EXCISE DUTY?

6.3.4 WHEN IS DUTY NOT PAYABLE?

6.3.5 HOW DO I WORK OUT THE AMOUNT OF DUTY TO PAY?

6.3.6 WHAT DO I DO IF I HAVE A DISPUTE AS TO THE DUTY?

6.3.7 DO I HAVE TO ACCOUNT FOR EXCISABLE FUEL PRODUCTS?

6.4 PROCEDURES

6.4.1 HOW DO I GET A PERIODIC SETTLEMENT PERMISSION (PSP)?

6.4.2 WHAT DOES MY PSP INCLUDE?

6.4.3 WHAT MUST I DO TO DELIVER FUEL PRODUCTS INTO THE AUSTRALIAN DOMESTIC MARKET?

6.4.4 HOW DO I LODGE EXCISE RETURNS AND PAY EXCISE DUTY?

6.4.5 WHAT DO I DO IF I HAVE MADE AN ERROR ON MY EXCISE RETURN?

6.4.6 WHAT DO I DO IF I NEED MORE INFORMATION?

6.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO PAYMENT OF DUTY?

6.6 TERMS USED

6.7 LEGISLATION (quick reference guide)

6.7.1 Excise Act 1901

6.7.2 Excise Tariff Act 1921

6.7.3 Crimes Act 1914

6.7.4 Income Tax Assessment Act 1997

6.7.5 Taxation Administration Act 1953

6.1 PURPOSE

This chapter deals with:

when duty is payable
when duty is payable under periodic settlement
when duty is payable under prepayment of excise duty
when duty is not payable
how to work out the amount of duty you're liable to pay, including tariff proposals and quotas
what to do if you have a dispute as to the duty
whether you have to account for excisable fuel products
how to get a Periodic Settlement Permission (PSP)
what your PSP will include
what to do to deliver fuel products into the home consumption
how to lodge excise returns and pay excise duty
what to do if you have made an error on your excise return, and
penalties that can apply to offences in relation to payment of duty.

6.2 INTRODUCTION

Excise duty is imposed at the time of manufacture of excisable fuel products.[114] However, the duty is not required to be paid at the time of manufacture.

This chapter focuses on the payment of duty and the factors that influence when and how much duty is payable.

To ensure the duty is ultimately acquitted, excisable fuel products remain subject to our control until they are delivered:

into home consumption, or
for export to a place outside Australia.[115]

The liability for duty, imposed at the time of manufacture, can be acquitted by:

payment of the duty
export of the goods
remission, or
use of the goods in the manufacture of other excisable goods.

Alternatively the liability can be transferred with the goods if they are sold while underbond.

6.3 POLICY AND PRACTICE

6.3.1 WHEN IS DUTY PAYABLE?

When the liability for duty becomes payable depends on how authority is given to deliver the excisable fuel products into home consumption. Authority to deliver excisable fuel products into home consumption can be given on a continuing basis, known as a PSP,[116] or on an ad hoc basis, known as prepayment of duty.[117]

6.3.2 WHEN IS DUTY PAYABLE UNDER A PSP?

Under a PSP the duty is paid after the excisable fuel products are delivered into home consumption.

To understand when the duty is paid in the case of periodic settlement requires an understanding of what the permission is and what your obligations are under such permission.

A PSP allows you to report deliveries and to pay duty on a periodic basis after the goods have been delivered into home consumption.[118] Periodic settlement is the most common arrangement for the delivery of goods into the home consumption.

You may apply for a PSP that covers any recurring seven-day reporting period.[119] You may specify in your application the 7 day period you wish to use, for example, Wednesday to Tuesday.[120] The application must be made on the approved form[121].

You may apply for a monthly PSP if you are either:

a small business entity;[122] or
included in a particular class of business or you deliver goods that are of a particular kind[123].

A 'small business entity' is a business with an aggregated turnover for the previous year of less than $2 million or is likely to have an aggregated turnover for the current year of less than $2 million.[124]

The class of business or particular kind of goods must be prescribed in the Excise Regulation 2015.

Stabilised crude oil and condensate are currently prescribed in the Excise Regulation as being goods for which a person may apply for a PSP in respect of a calendar month. If a person is granted a PSP in respect of a calendar month, they will be required to give the Collector a return, in an approved form, on the day of each month specified in the PSP. The return must contain details of goods that have been delivered into home consumption under the PSP in the preceding month.[125]

A PSP is given in writing and includes:

your name as the holder of the PSP
the kind of goods to which the PSP applies
the place from which the goods may be delivered
the start date of the PSP and whether it is for a seven-day or monthly period;
the seven-day period specified, and
any special requirements of the periodic settlement.[126]

In considering your application for a PSP we will take into account various issues including compliance with the law and the protection of the excise revenue. We will also consider whether you have complied with the requirements of any previous permission you have been given. If we refuse to give a PSP we will issue you a notice in writing setting out the reasons for the refusal.[127]

A decision we make in relation to the period of a PSP or any condition for a PSP is a reviewable decision.[128]

For information about your review rights refer to Chapter 8 - Reviews and objections.

If you have a seven-day PSP for a fuel that is other than CNG, LNG or LPG, you must:

lodge an excise return, on the first business day following the end of the seven-day period, specified in your PSP. The excise return details the goods you have delivered into home consumption during the settlement period, and
at the time you lodge your return, pay any duty at the rate applicable when the goods were delivered into home consumption.[129]

A 'business day' is a day that is not a Saturday or Sunday or a public holiday in the place where you lodge your return.

If you have a seven-day PSP for CNG, LPG or LNP the same requirements apply however you must give us a return and pay any excise duty on or before the 6^th business day following the end of the seven-day period.[130]

If you have a monthly PSP the same requirements apply however you must give your return and pay any excise duty on or before the 21^st day of month following the end of the monthly period.[131]

If you have a monthly permission because you are in a class of persons prescribed in the regulations of the Excise Act or because you deliver goods into home consumption of a kind prescribed, then the regulations of the Excise Act can impose alternative conditions.

We may also determine a different PSP period if:

you do not have any excise duty to pay[132]; or
you are a small business and have a PSP for a monthly period and have advised us in writing that the business has ceased to be a small business[133]; or
the business is included in a particular class of business and have a PSP for a monthly period and have advised us in writing that the business has ceased to be included in the class[134].

If we determine a different PSP period we will advise you in writing that your PSP is revoked from the day specified in the notice. We will give you another PSP for a seven-day period[135].

If you advise us in writing that you wish to change the period of your PSP, we may, in writing, revoke your current PSP and give you another permission for the preferred period. We will notify you of the day the change comes into effect.[136]

You do not need to have an excise licence to have a PSP.

Example 6A

Buy Me Pty Ltd (Buy Me) does not hold an excise licence and does not qualify as a small business entity. A licensed manufacturer manufactures excisable fuel products for Buy Me under contract. The fuel products are not of a particular class of goods prescribed in the Excise Regulation. Buy me is also not included in a class of person prescribed in the Excise Regulation.

Under the terms of the contract, Buy Me has title to the goods from the time of manufacture and will pay the excise duty.

Buy Me applied for, and was granted, a seven-day PSP for the period Tuesday to Monday.

Therefore, Buy Me is able to arrange delivery of the excisable fuel products into home consumption and defer payment of excise duty, on those goods, until after the end of period. On the first working day after the end of the period (i.e. Tuesday, unless it is a public holiday in which case it will be due on Wednesday) Buy Me must lodge an excise return for any excisable fuel products delivered during the period and pay the excise duty owing on those goods.

We will send Buy Me written confirmation, after the excise return has been processed.

6.3.3 WHEN IS DUTY PAYABLE UNDER PREPAYMENT OF EXCISE DUTY?

Under prepayment, the duty is paid before the excisable fuel products are delivered into home consumption.

If you do not hold a PSP, you must receive a Delivery authority from us before you are allowed to deliver the excisable fuel products into home consumption. We require you to pay any applicable duty before we give you a Delivery authority. To request a Delivery authority you need to lodge an excise return (NAT4285).

That is, you must:

lodge an excise return
pay the relevant duty, and
receive a Delivery authority from us.[137]

You must not deliver excisable fuel products into home consumption before receiving the Delivery authority.

6.3.4 WHEN IS DUTY NOT PAYABLE?

There are circumstances in which no duty will be payable. These include where:

goods are classified to an item or subitem with a FREE rate of duty
goods are exported
an exemption circumstance applies
a remission circumstance applies, or
excisable fuel products that are subject to our control are used in the manufacture of other excisable fuel products.

6.3.5 HOW DO I WORK OUT THE AMOUNT OF DUTY TO PAY?

To work out how much duty you need to pay you will need to:

(i) check whether your fuel products are excisable fuel products according to the Schedule to the Excise Tariff Act 1921 (Excise Tariff Act)[138] and identify the correct duty rate

(ii) work out the quantity of fuel products subject to duty, in each tariff subitem, that you deliver into home consumption

(iii) multiply the quantity of fuel products by the rate of duty on the excisable fuel products, and

(iv) add up the total for each subitem to work out total duty to be paid.

(i) Classifying excisable fuel products

The Schedule to the Excise Tariff Act (Schedule) lists those goods that, if manufactured or produced in Australia, are subject to excise. The Schedule also contains the rate of duty applicable to the goods. For excisable fuel products the relevant part of the Schedule is as follows:

Tariff Item	Subitem	Description of Goods	Rate*
10		Goods as follows: (a) petroleum condensate and stabilised crude petroleum oil for use otherwise than: (i) in the recovery, production, pipeline transportation or refining of petroleum condensate or stabilised crude petroleum oil; or (ii) as feedstock at a factory specified in a licence granted under Part IV of the Excise Act 1901; (b) topped crude petroleum oil; (c) refined or semi-refined liquid products derived from petroleum, other than such products for use (other than in an internal combustion engine) in refining petroleum condensate or stabilised crude petroleum oil; (d) liquid hydrocarbon products derived through a recycling, manufacturing or other process; (da) liquefied petroleum gas (db) liquefied natural gas (dc) compressed natural gas (e) denatured ethanol for use as fuel in an internal combustion engine; (f) biodiesel *(g) blends of 1 or more of the above goods (with or without other substances), other than blends covered by subsection 77H (1), (2A), (2B) or (3) of the Excise Act* 1901 ; but not including the following: (h) goods classified to item 15; (i) waxes,and bitumen** (j) good covered by section 77HA or 77HB or the Excise Act 1901
	10.1	Petroleum condensate	$0.389 per litre
	10.2	Stabilised crude petroleum oil	$0.389 per litre
	10.3	Topped crude petroleum oil	$0.389 per litre
	10.5	Gasoline (other than for use as fuel in aircraft)	$0.389 per litre
	10.6	Gasoline for use as fuel in aircraft	$0.03556 per litre
	10.7	Blends of gasoline and ethanol	The amount of duty worked out under section 6G
	10.10	Diesel (other than biodiesel)	$0.389 per litre
	10.11	Blends of diesel and ethanol	The amount of duty worked out under section 6G
	10.12	Blends of diesel and biodiesel	The amount of duty worked out under section 6G
	10.15	Heating oil	$0.389 per litre
	10.16	Kerosene (other than for use as fuel in aircraft)	$0.389 per litre
	10.17	Kerosene for use as fuel in aircraft	$0.03556per litre
	10.18	Fuel oil	$0.389 per litre
	10.19A	Liquefied petroleum gas, other than liquefied petroleum gas exempted from excise duty by section 77HB of the Excise Act 1901	$0.102 per litre
	10.19B	Liquefied natural gas, other than liquefied natural gas exempted fro excise duty by section 77HB of the Excise Act 1901	$0.213 per kilogram
	10.19C	Compressed natural gas, other than compressed natural gas exempted from excise duty by section 77HA of the Excise Act 1901	$0.213 per kilogram
	10.20	Denatured ethanol for use as fuel in an internal combustion engine	$0.389 per litre
	10.21	Biodiesel	$0.389 per litre
	10.25	Liquid aromatic hydrocarbons consisting principally of benzene, toluene or xylene or mixtures of them (other than goods covered by section 77J of the Excise Act 1901)	$0.389 per litre
	10.26	Mineral turpentine (other than goods covered by section 77J of the Excise Act 1901)	$0.389 per litre
	10.27	White spirit (other than goods covered by section 77J of the Excise Act 1901)	$0.389 per litre
	10.28	Petroleum products (other than blends) not elsewhere included (other than goods covered by section 77J of the Excise Act 1901)	$0.389 per litre
	10.30	Blends of 1 or more of the above goods (with or without other substances) not elsewhere included that can be used as fuel in an internal combustion engine (other than goods covered by section 77J of the Excise Act 1901)	The amount of duty worked out under section 6G
15		Goods as follows, other than: (a) goods for use as a fuel; and (b) exempt oils and hydraulic fluids
	15.1	Petroleum-based oils (including lubricant/fluid/oil products) and their synthetic equivalents but not greases	$0.085 per litre
	15.2	Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as oils (including lubricant/fluid/oil products) but not greases	$0.085per litre
	15.3	Petroleum-based greases and their synthetic equivalents	$0.085 per kilogram
	15.4	Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as greases	$0.085 per kilogram

*Rate of duty as at 1 April 2015. Rates for fuel and petroleum products (other than aviation fuels) were increased on 10 November 2014 and 2 February 2015 by a Tariff proposal that requires ratification prior to 30 October 2015 to give full effect for future years. If ratified, the indexation provisions impose biannual indexation of excise rates for fuel and petroleum products (other than aviation fuels) in line with the consumer price index - generally on 1 February and 1 August each year.

For the current rates of duty, refer to the Schedule under Excise Tariff Working Pages on our website at www.ato.gov.au

(ii) Working out quantities of excisable fuel products

We measure fuel quantity in litres or, in some cases, kilograms. However, the volume of fuel varies with temperature.

To work out your fuel quantity for excise duty purposes, volume is generally used and must be measured at a temperature of 15 degrees Celsius, which is an industry standard, and the quantity rounded to the nearest whole litre.

The method used to calculate the litres figure is the standard conversion of a weight measurement, which is to take the weight and divide it by the density corrected to 15 degrees Celsius.

For more information on measuring the volume of liquid fuels please refer to Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No 1).

If you are dealing with LPG there are other factors to be considered when determining volume. These factors can include the density and vapour pressure.

For more information on measuring the volume of LPG please refer to Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1).

The fuel quantity of CNG is measured in kilograms for excise purpose. If you are dealing with CNG which is measured via a different method (either volume or energy value), there are factors to be considered when determining the mass.

For more information on determining the mass of CNG please refer to Excise (Mass of CNG) Determination 2012 (No. 1).

You may have instances when product is invoiced in kilograms and you then need to convert the quantity to litres to:

record it in your stock records, and
include on an excise return, when delivered into home consumption.

The method used to calculate the litres figure is the standard conversion of a weight measurement to a liquid measurement, which is to take the weight and divide it by the density corrected to 15 degrees Celsius.

Example 6B

100 kilograms of fuel oil having a density of 0.94 at 15 degrees Celsius converts to 106 litres:

100 / 0.94 = 106.38 rounded to 106 litres

(iii) Calculating duty payable on each excisable fuel product

The rate of duty is set out in the Schedule to the Excise Tariff Act.

The rate of duty you use is the rate contained in the working tariff for the subitem. It will also depend on whether you have a PSP. If you do it is the rate applicable at the time you deliver the excisable fuel products into home consumption. If you do not have a PSP, then it is the rate applicable at the time you make the pre-payment.[139]

The excise duty rates used were current at the time of publication.

For the current rates of duty, refer to the Schedule under Excise Tariff Working Pages on our website at www.ato.gov.au

Example 6C

When goods are delivered into home consumption under a PSP, the rate of duty that applies is the rate in force at the time the goods are delivered.

On 3 August 2014 a manufacturer delivers lubricating oil under its PSP.

The lubricating oil is classified to subitem 15.1 of the Excise tariff.

The rate of duty that applies is the rate in force on 3 August 2014- $0.085 per litre.

Example 6D

When goods are delivered into home consumption under a prepayment, the rate that applies is the rate in force at the time payment is made.

On 8 June 2014 a manufacturer that does not hold a PSP prepays duty for a delivery of lubricating oil. The lubricating oil is delivered on 8 June 2014.

The lubricating oil is classified to subitem 15.1 of the Excise tariff.

The rate of duty that applies is the rate in force on 8 June 2014 - $0.05449 per litre.

The amount of duty payable is then calculated by multiplying the quantity of excisable fuel products by the applicable rate of duty.

Example 6E

10,000 litres of diesel are delivered into home consumption on 10 March 2015.

The diesel is classified to subitem 10.10 of the Excise tariff and has a duty rate of $0.389 per litre.

Therefore, the duty payable is 10,000 litres x $0.389 = $3,890.00

(iv) Calculating total duty payable

Duty payments are notified to us by including details on your excise return. Excisable fuel products classified to different items or subitems of the Excise tariff must be shown separately on your excise return on what are referred to as lines.

Example 6F

My Fuel Sales needs to report deliveries of fuel and grease for the period ended 10 March 2015.

On their excise return, My Fuel Sales reports their deliveries and duty liability as:

Line	Tariff item	Quantity	Units	Duty rate	Excise amount
1	10.5	100,000	L	$0.389	$38,900.00
2	15.3	15,000	Kg	$0.085	$1,275.00
TOTAL					$40,175.00

What happens if the rate changes during my settlement period?

If the rates of duty change within your settlement period, you may lodge two excise returns or, alternatively, include separate lines for the same product on one return; that is:

one return or line for goods delivered under the old rates, and
one return or line for goods delivered under the new rates.

How can the rate change?

The applicable rate of excise duty can also be affected by:

changes to the Excise Tariff Act (including tariff proposals), or
quotas.

Changes to the Excise Tariff Act

Where the Government decides to change the rate of excise applying to excisable goods, or to apply excise to new goods or stop applying excise to certain goods this requires an amendment to the Excise Tariff Act. The Government normally notifies the intention to do this with a tariff proposal.

Tariff proposals

Tariff proposals are a means of changing the Excise Tariff (rates can be adjusted up or down; products can be added or removed). There are specific provisions in the Excise Act that provide for tariff proposals when Parliament is not sitting.

Effectively changes to the Excise Tariff can be notified in the Parliament or, if the Parliament is not sitting, by notice in the Gazette.

The tariff proposal is required to be validated by an Act within12 months giving retrospective effect to the date of the proposal.

You cannot commence proceedings against us for any action taken to collect the amount set by the tariff proposal during the periods specified in section 114 of the Excise Act.[140]

If an amending Act validating the changes outlined within the tariff proposal is not passed within the prescribed periods, then any additional amounts will be refunded.

On 30 October 2014 the Government introduced Excise Tariff Proposal (No. 1) 2014 (and Customs Tariff Proposal (No. 1) 2014) into Parliament. The result was an increase in the excise (and excise equivalent customs) duty rates for all fuels (other than aviation fuel) from 10 November 2014 and the application of indexation increases to fuel in February and August 2015. For the rates increases to continue (and those already imposed remain) the tariff proposals must be ratified by Parliament within 12 months of introduction.

Quotas

Quotas are a means of ensuring that people cannot gain an advantage by anticipating rises in excise rates and then delivering more excisable fuel products than they would normally. Effectively quotas restrict the quantity of excisable fuel products you can deliver into home consumotion at the existing excise rate. If you exceed your quota for the period you will need to pay the duty at the new rate.

Where we believe that persons are anticipating an increase in the rate of duty, and as a result clearances of excisable fuel products in a particular period, is likely to be greater than it otherwise would be, we will publish a notice in the Commonwealth Gazette. This notice will state that a particular period is a 'declared period'.[141]

The 'declared period' is the period during which quotas will operate. To establish what your quota is we will consider the amounts of your past deliveries.[142]

Once we have established your quota we will give you a written quota order that specifies the maximum level (which can be nil)[143] of excisable fuel products that you can deliver into home consumption at the applicable excise rate in force during the declared period.

If at anytime during the declared period you exceed your quota you are required to pay the duty on the excess goods at the existing rate, and in addition we may require you to pay a security, by cash deposit, equal to the duty on the excess goods.[144]

At the end of the declared period we will reconcile your deliveries with your quota. If you delivered into home consumption more than your quota allowed, then the duty for the amount in excess of the quota is calculated at the rate in force the day after the declared period ends. Therefore if the rate has gone up you will pay the higher rate of duty on the amount in excess of your quota.

We can vary or revoke a quota order any time before the end of the declared period or 60 days after the making of the quota order whichever occurs last.

For more information about our role in determining and applying quotas refer to Practice Statement Law Administration 2012/3: The ATO role in determining and applying quotas under the Excise Act 1901.

6.3.6 WHAT DO I DO IF I HAVE A DISPUTE AS TO THE DUTY?

If you dispute:[145]

the amount of duty
the rate of duty, or
the liability of goods to duty (for example, whether the goods are excisable)

you may deposit with us the amount of duty demanded.

The deposit of this duty is to be made on an excise return. The excise return should be accompanied by a letter which sets out the details of the dispute. Upon receipt of the amount deposited we will authorise delivery of the goods. You have 6 months after making the deposit to commence court action. If that action is decided in your favour we are obliged to refund you the deposit along with interest of 5% p.a. If the action is not commenced within 6 months or the court does not find in your favour the amount deposited is taken to be the correct amount of duty.

However, you may not commence court action if you have a taxation objection under Part IVC of the Taxation Administration Act 1953 against a private ruling and the matter of the objections:

relates to the amount or rate of duty; or
the liability of the goods to duty; and
the matter of the objection is also in dispute[146].

Example: 6G

A licensed manufacturer anticipates manufacturing a new type of excisable good. They seek a private ruling as to the rate of duty that would be payable on the good. They do not accept the rate of duty advised by us in a private ruling and they lodge an objection. Subsequently, they commenced manufacture of the excisable goods. They pay the amount of duty at the rate that we claimed was payable in the private ruling, and commence an action against us under section 154 of the Excise Act. Their ability to commence an action under section 154 is limited to matters that are not covered under the objection to the private ruling.

For more information on private rulings see section 8.5.1 - Private Rulings

These disputes do not apply to changes brought about by a tariff proposal.

For more information on tariff proposals see section 6.3.5 - How do I work out the amount of duty to pay?

As authority to deliver the goods is a consequence of making the deposit we consider that this means that section 154 does not apply to goods delivered under a PSP.

Delivery of the goods and payment of interest under Section 154 of the Excise Act do not apply in cases where we are of the opinion that any evasion under the Excise Act has been committed or attempted.

6.3.7 DO I HAVE TO ACCOUNT FOR EXCISABLE FUEL PRODUCTS?

Where you have or had possession, custody or control of any excisable fuel products[147] (subject to excise control), you have to be able to satisfactorily account for them.

If we ask you to account for excisable fuel products, and you cannot satisfactorily do so, then you may be required to pay an amount equal to the duty. If we require this payment you will be given a written demand. The amount you are required to pay is calculated using the rate of duty in force on the day the demand is made.

When requested to account for excisable fuel products you must be able to show that:

the goods are still at your premises
duty has been paid
duty was not payable (for example, where a remission applied), or
the goods have otherwise been dealt with in accordance with the excise law (for example, moved under a movement permission or included on an excise return at a concessional rate).

Excisable fuel products will not have been accounted for satisfactorily just because they were:

given away for promotional purposes[148]
stolen from licensed premises,[149] or
delivered into home consumption under the mistaken belief that they were not excisable.

We may also demand payment from you if you have failed to keep excisable fuel products safely (for example, if you have a break-in and a theft occurs, you will be required to pay an amount equal to the duty that would have applied to the excisable fuel products that have been stolen).

Our decision to demand payment is a reviewable decision.[150]

For information about your review rights refer to Chapter 8 - Reviews and objections.

In determining whether you have accounted for the excisable fuel products, we may allow you to offset any stock shortages and surpluses.

Example 6H

My Petroleum Wholesalers is asked to account for their excisable fuel products. They carry out a stocktake and find there is a surplus of 100,000 litres of ULP and a shortage of 200,000 litres of diesel.

We will allow them to offset the surplus and shortage. Therefore, there are 100,000 litres of diesel that have not been accounted for.

A demand will be issued for an amount equal to the excise duty payable on the 100,000 litres.

My Petroleum Wholesalers corrects its book stock to take up the surplus stock of 100,000 litres of ULP and, when the demand is paid, write off the shortage of 200,000 litres of diesel.

Example 6I

Continuing from example 6G, a couple of months later, My Petroleum Wholesalers decides to conduct another stocktake. They find a surplus of 250,000 litres of heating oil and a shortage of 200,000 litres of fuel oil.

They decide to offset the surplus and shortage. Therefore, there are no litres that have not been accounted for but there is a surplus of 50,000 litres.

My Petroleum Wholesalers corrects its book stock to take up the surplus stock of 250,000 litres of heating oil and write off the shortage of 200,000 litres of fuel oil. They do not need to notify us as there has been no shortage in the payment of the duty. If a shortfall had occurred they would need to contact us before the offsetting could occur.

What is the out of period adjustment arrangement?

There are circumstances in which you may make "out of period" adjustments to your excise liability on your excise return without our prior approval.

For example, a periodic settlement permission holder who is eligible for refunds or drawbacks or has underpaid duty in a previous settlement period may be able to use the out of period adjustment arrangement to account for the variations within the current settlement period.

Adjustments covered include refund claims, drawback claims and underpayments of duty. An out of period adjustment report must be lodged with the relevant excise return.

Before you can use the out of period adjustment system you must obtain approval from us.

For more information about the out of period adjustment system, refer to PS LA 2003/1: Excise Duty - Reporting and accounting for debit and credit adjustments outside the current reporting period.

What happens if I return fuel products to underbond stock?

Fuel products that have been delivered into home consumption but returned before the end of the settlement period are not required to be included on the excise return for that period. The product can be returned to underbond stock and treated as though they have never left excise control. Fuel that has been returned to a licensed place during a settlement period that is after the settlement period in which the fuel was delivered, can be included in the out of period adjustment as described above.

6.4 PROCEDURES

6.4.1 HOW DO I GET A PERIODIC SETTLEMENT PERMISSION (PSP)?

If you apply for a manufacturer or storage licence, you can use your application form to indicate whether you intend to pay excise duty either periodically or prior to delivery. You do not need to complete a separate PSP application.

If you do not have a licence, or you originally chose not to pay excise duty periodically, then you should complete an Application for a continuing movement permission (non-export) (NAT 73712) and forward it to us for assessment.

If we approve your PSP, we will notify you in writing within seven days of receiving your request.

A PSP is not transferable to another person and remains in force until revoked.

A request to add or delete delivery establishments from a PSP is treated as if it were a request for a new permission. However, your PSP number will remain unchanged.

We may also:

refuse to grant a PSP
impose conditions on a PSP, or
revoke a PSP.

Failure to comply with a condition may result in the revocation of the PSP.[151] In such an instance, we would take into account a variety of factors, including your payment history.

A decision to refuse or to revoke a PSP is not a reviewable decision. However, there may be other avenues for review, for example you may seek an informal review of our decision.

For information about your review rights refer to Chapter 8 - Reviews and objections.

For more information about PSPs, contact us by phoning 1300 137 290.

6.4.2 WHAT DOES MY PSP INCLUDE?

Your PSP in relation to excisable fuel products will include:

permission to deliver excisable fuel products into home consumption
conditions, such as:

settlement period - the period specified during which goods can be delivered[152]
the type of goods that may be delivered from each premises,
quantity limits (if any)
when you must pay the duty
how you must pay - permitted methods (e.g. EFT, cheque, at a Post Office)
when and how to lodge your excise return
whether nil returns are required,[153] and
record-keeping requirements

a schedule listing:

one or more premises from which deliveries may be made.

Example 6J

A PSP specifies a settlement period starting on Saturday and ending on Friday. It states that excise returns must be lodged by 4 pm on the first business day after the end of the settlement period. It also says that the duty on deliveries made during the settlement period must be paid at the same time as the excise return is required to be lodged.

An excise return must be lodged and the duty paid by 4 pm on Monday for all goods delivered during the settlement period.

When a public holiday falls on a Monday, the excise return is due for lodgement and duty is to be paid by 4 pm on Tuesday, the next business day.

Where you have deliveries in different states of Australia there may be different public holidays in those states. If your returns are prepared by an office in a state different from that in which the delivery into the Australian domestic market occurs, lodgement is due on the next business day in the state where the return is prepared.[154]

6.4.3 WHAT MUST I DO TO DELIVER FUEL PRODUCTS INTO HOME CONSUMPTION?

Delivery under periodic settlement permission

If we provide you with a PSP, you must take the following steps to deliver excisable fuel products home consumption:

deliver the fuel products into home consumption: (where delivered in accordance with the permission the products are now no longer subject to excise control)
complete and submit your excise return in accordance with the timeframes in the permission, and
pay the duty to us in accordance with the timeframes in the permission.

Delivery after prepaying the excise duty

If you do not have a PSP, you must take the following steps to deliver excisable fuel products home consumption:

complete and submit your excise return
pay the duty to us
obtain a Delivery authority from us, and
deliver the fuel products into home consumption.

6.4.4 HOW DO I LODGE EXCISE RETURNS AND PAY EXCISE DUTY?

To lodge your excise return (NAT 4285):

fax it to us on 1300 131 456, or
post it to

Australian Taxation Office
Excise Returns Processing Unit

PO Box 3007

PENRITH NSW 2740.

You can pay excise duties:

by electronic funds transfer, including direct credit and BPAY
in person at a Post Office, or
by mail (cheque or money order), The payment must be received by the day and time stated in your PSP.

If you are required to pay your other tax debts electronically, you must also make your payment for excise duty by electronic funds transfer.

We do not accept credit card payments.

If you pay the excise duty at a Post Office, you must use a payment advice. To obtain a payment advice booklet, phone us on 13 72 26 or 1800 815 886 and supply us with your Australian Business Number (or Excise Identification Number) and client account number.

Lodgment of an excise return and payment of any duty must be made by the day and time stated on your PSP.[155]

Failure to pay on time may result in the revocation of your PSP.

To obtain an excise return (NAT 4285):

visit our website at ato.gov.au, or
phone 1300 137 290.

For more information about completing your excise return refer to the Excise return instructions (NAT 15436).

6.4.5 WHAT DO I DO IF I HAVE MADE AN ERROR ON MY EXCISE RETURN?

You may correct errors in your excise return or add new lines by lodging an amending excise return and referencing the number of your original return.

If your amendment results in a shortfall in excise duty paid, you must pay the additional duty when you lodge the amending return.

If your amendment results in an overpayment of excise duty, you may apply for a refund or treat the amount as a credit and offset it against the duty you are liable to pay in your next excise return. In this situation, time limits may apply in which to lodge your amended return.

Time limits apply for making an application for a refund of excise duty. In most cases an application must be submitted within 12 months of the date on which the excise duty was paid.

An amending return can only be used to change product details.

If you wish to change other information in your original excise return (for example your individual details or the settlement period) you must lodge a new excise return form as the amending excise return form does not cater for changes to these sections. The new return must contain the amended details and refer to the original return. You should also request cancellation of the original return.

To obtain an Amending excise return (NAT 4286):

visit our website at ato.gov.au, or
phone 1300 137 290.

For more information about completing your Amending excise return refer to the

Amending excise return instructions (NAT 15772).

6.4.6 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on payment of duty contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

6.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO PAYMENT OF DUTY?

The following are the penalties that may apply after conviction for an offence.

Move, alter or interfere

If you move, alter or interfere with excisable fuel products that are subject to excise control, without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[156]

Deliver

If you deliver excisable fuel products into the Australian domestic market contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[157]

Evade

If you evade payment of any duty which is payable, the maximum penalty is 5 times the amount of duty on the excisable fuel products, or where a court cannot determine the amount of that duty the penalty is a maximum of 500 penalty units .[158]

False or misleading statements

6.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG); and
liquefied petroleum gas (LPG).

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[160] is the document that you use to advise us:

the volume or mass of excisable fuel products that you have delivered into home consumption during the period designated on your PSP, or
the volume or mass of excisable fuel products that you wish to deliver into home consumption following approval.

Home Consumption[161]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Remission

A remission of excise duty extinguishes the liability for duty that was created at the point of manufacture, in prescribed circumstances.

For more information about remissions see Chapter 7 - Remissions, refunds, drawbacks and exemptions.

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

6.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

6.7.1 Excise Act 1901

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 59 - Payment of duty

Section 59A - Declared period quotas - effect on rates of Excise duty

Section 60 - Persons to keep excisable goods safely etc.

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 114 - Time for commencing action

Section 154 - Deposit of duty

Section 155 - Limited dispute rights because of objection against private ruling

Section 162C - Review of decisions

6.7.2 Excise Tariff Act 1921

Section 5 - Duties of excise

6.7.3 Crimes Act 1914

Section 328-110 - Meaning of small business entity

6.7.4 Income Tax Assessment Act 1997

6.7.5 Taxation Administration Act 1953

Section 359-60 - Objections, review and appeals relating to private rulings

07 REMISSIONS, REFUNDS, DRAWBACKS & EXEMPTIONS

7.1 PURPOSE

7.2 INTRODUCTION

7.3 POLICY AND PRACTICE

7.3.1 WHEN CAN I APPLY FOR A REMISSION OF EXCISE DUTY?

7.3.1.1 WHEN ARE EXCISABLE FUEL PRODCUTS SUBJECT TO REMISSION WITHOUT APPLICATION?

7.3.1.2 REMISSION OF EXCISE DUTY ON LPG AND LNG

7.3.1.3 NOTICE REQUIREMENTS FOR LPG DELIVERED UNDER REMISSION

7.3.1.4 PENALTY OR OFFENCE RELATING TO LPG DELIVERED UNDER REMISSION

7.3.2 WHEN CAN I APPLY FOR A REFUND OF EXCISE DUTY?

7.3.3 WHEN CAN I APPLY FOR A DRAWBACK OF EXCISE DUTY?

7.3.4 WHAT HAPPENS IF I AM OVERPAID A REFUND OR DRAWBACK?

7.3.5 WHEN ARE EXCISABLE FUEL PRODUCTS EXEMPT FROM EXCISE DUTY?

7.3.5.1 WHEN IS CNG, LPG AND LNG EXEMPT FROM EXCISE DUTY?

7.4 PROCEDURES

7.4.1 HOW DO I APPLY FOR A REMISSION OR REFUND?

7.4.2 HOW DO I APPLY FOR A DRAWBACK?

7.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

7.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO REMISSIONS, REFUNDS, DRAWBACKS AND EXEMPTIONS?

7.6 TERMS USED

7.7 LEGISLATION (quick reference guide)

7.7.1 Excise Act 1901

7.7.2 Excise Regulations 2015

7.7.3 Excise Tariff Act 1921

7.7.4 Crimes Act 1914

7.1 PURPOSE

This chapter deals with:

when you can apply for a remission, refund or drawback
what happens if you are overpaid a refund or drawback
when fuel products are exempt from excise duty
how to apply for a remission, refund or drawback, and
penalties that can apply to offences in relation to remissions, refunds, drawbacks and exemptions.

7.2 INTRODUCTION

A remission of excise duty extinguishes the liability for duty that was imposed at the point of manufacture.

A refund is the repayment of duty that has already been paid.

A drawback is a repayment of duty already paid. It is similar to a refund, but applies where duty-paid goods are exported.

In some circumstances the duty you pay on goods may be subject to a complete or partial refund or drawback.[163]

7.3 POLICY AND PRACTICE

7.3.1 WHEN CAN I APPLY FOR A REMISSION OF EXCISE DUTY?

You can apply for a remission of excise duty payable on your excisable fuel products if the following circumstances apply while the goods are subject to excise control:

Where the fuel products have deteriorated or been damaged, pillaged, lost or destroyed,[164]

'Pillaged' means to strip of money or goods by open violence, as in war; plunder.[165] This does not cover simple cases of theft.

'Lost' in this context does not simply mean can not be found. For example a tank may spring a leak and it is known that the fuel has drained away. The fuel has been lost and cannot be used by anyone as a fuel.

For more information about payment of duty see Chapter 6 - Payment of duty.

Example 7A

Fuel which is under bond is accidentally destroyed by fire. The owner applies for a remission of duty on the destroyed fuel. If approved this would extinguish the duty liability.

Where goods are not worth the amount of excise duty that would be payable on the goods if delivered into home consumption.[166]

Example 7B

A holder of a manufacturer's licence packages special formula fuel products in 200 litre drums. Before the fuel products are delivered into home consumption they become unsaleable, due to changed packaging requirements resulting from legislative changes made by the State Government relating to the labelling of hazardous goods, and they cannot be sold as it is uneconomical to repackage.

As the fuel products are still subject to excise control when they became unsaleable, the licence holder can apply for a remission of duty on the fuel products. Upon receipt of this application and satisfactory documentary evidence of the destruction of the products or their disposal to, for example, refinery feedstock, the remission will be payable.

Recycled hydraulic oil, brake fluid, transmission oil, transformer oil or heat transfer oil (classified to ETA 15.2), delivered in accordance with your PSP, for which no benefit is payable under the Product Stewardship (Oil) Regulations 2000 and that has been used for the same purpose for which it was used before being recycled.[167]

The fuel is used in the manufacture of goods that are not excisable and is chemically transformed (other than by combustion) in that manufacture. [168]

This circumstance applies where a fuel product is transformed through a chemical reaction (other than combustion) to produce an entirely different substance that is no longer an excisable product, as in some large-scale petrochemical manufacturing processes.

The remission does not apply where fuel is merely mixed with other substances to make products such as solvents, cleaning agents or paint.

7.3.1.1 WHEN ARE EXCISABLE FUEL PRODCUTS SUBJECT TO REMISSION WITHOUT APPLICATION?

Excisable fuel products, to which items 10 and 15 of the excise tariff apply, may be subject to remission without application (this effectively means they are exempt from duty) when they are for official use but not for trade by:[169]

the Governor-General or any member of the Governor-General's family and State Governors or any member of a State Governor's family[170]
the Australian American Foundation and the ANZAC Agency for the Pacific Region of the Commonwealth War Graves Commission[171]
the Government of another country, under an agreement between that Government and the Australian Government [172]
a foreign country under a Status of Forces agreement with the Australian Government [173]; or
a diplomatic or consular mission and the goods are delivered under your PSP. The fuel in this circumstance can also be for personal use.[174]

Example 7C

A manufacturer receives an order from a diplomatic mission for fuel, for official use. The manufacturer delivers the fuel, into home consumption (to the diplomatic mission), under the terms of their PSP. (The terms of the PSP may require the manufacturer to submit an Excise remission (NAT 4289) to us, after delivery of the fuel.)

If you are uncertain whether a circumstance falls into one of these categories, you should contact us by phone on 1300 137 290.

To supply fuel products under these circumstances, you must first ensure the receiver meets the relevant criteria. For example, you should only accept orders, stating that the goods are for official use, on the official stationery, or official order, of eligible people or organisations. You must keep a copy of this documentation.

You do not have to apply for a remission and you do not have to include these products on your excise return.

7.3.1.2 REMISSION OF EXCISE DUTY ON LPG AND LNG

An automatic remission of duty is available without application where you are a licensed person and/or a holder of a PSP and deliver LPG or LNG into home consumption (this includes own use) that is not for use, or intended for use, in an internal combustion engine in either a motor vehicle or vessel.[175]

If the LPG or LNG is delivered for mixed use (both non-transport and transport) and is delivered into the same tank then a remission cannot apply. This is also the case if you do not know the end use of the LPG or LNG.

The remission applies at the time the LPG or LNG is delivered.

For more information about Periodic settlement permissions refer to Chapter 6 - Payment of duty.

Example 7D: LPG delivered under settlement permission

Elizabeth's business is licensed for excise purposes. It supplies LPG to Kathleen's business for the purposes of heating during the 2014-2015 financial year. As Kathleen will not be using the LPG for transport purpose the remission applies and Elizabeth will not need to pay duty on the LPG.

Example 7E: LPG delivered for mixed use

Aaron manufactures LPG. Aaron delivers the LPG to Christopher in a bulk tank for transport and non-transport use. The LPG is excisable. As Aaron supplies the LPG to Christopher for mixed use he cannot apply a remission to the LPG.

This means that Aaron must pay excise duty at the transport rate in relation to all the LPG supplied to Christopher. Christopher may be entitled to a fuel tax credit depending on his use of the fuel.

Example 7F: LPG delivered for transport use by a distributor

Huey's business is licensed for excise purposes and supplies LPG to a site specified in a manufacturers licence held by Daisy's Distributors. Daisy holds a movement permission that allows the LPG to move from Huey's licensed site without duty being paid. Daisy's business distributes the LPG to both transport and non-transport customers. Where Daisy distributes the LPG to service stations and trucking companies for transport purposes, Daisy will be required to pay duty on the fuel and no remission will be available.

For more information about movement permissions refer to Chapter 5 - Movement permissions.

7.3.1.3 NOTICE REQUIREMENTS FOR LPG DELIVERED UNDER REMISSION

If you hold a manufacturer or storage licence and you supply or sell LPG to which a remission applies at the time of supply or sale you must give a notice to your customer.[176]

If you on-sell or on-supply LPG on which a remission applied, and at the time of the on-sale or on-supply a remission continues to apply, you must give a notice to your customer that a remission applied to the LPG.[177]

The notice must include the words:

'Not to be used, or supplied, for transport use. Penalties apply'. [178]

The phrase 'excisable LPG use' means to use LPG in a system for supplying fuel to an internal combustion engine of either a motor vehicle or a vessel, either directly or by filling another tank connected to such an engine.

The phrase 'excisable LPG use' does not include the use of LPG for a vehicle that is designed to move goods with a forklift and is for use primarily off public roads.

You are not required to give notice for LPG you supply:

in, or into, a 210 kilogram container; or
to a residential premises and some or all of the LPG is not supplied for the purpose of carrying on an enterprise.[179]

7.3.1.4 PENALTY OR OFFENCE RELATING TO LPG DELIVERED UNDER REMISSION

You may be subject to a penalty of 1 penalty unit if you do not give the notice when required.[180]

Penalty for using LPG subject to remission for an excisable LPG use

You may be subject to a demand for payment from us if:

LPG is sold or supplied to you; and
you use the LPG for an excisable LPG use; and
an LPG remission applied to the LPG at the time of the use.[181]

The amount demanded will be equal to 2 times the amount of excise duty that would be payable on the LGP when used for an excisable LPG use.[182]

Penalty for unlawfully selling LPG subject to remission that is used for an excisable LPG use

You commit an offence if:

you intentionally sell LPG; and
you know that, or are reckless as to whether, the LPG will be used for an excisable LPG use, and
the LPG is used for an excisable LPG use; and
you did not pay excise duty on the LPG as a remission applied to the LPG at the time of the use.[183]

The penalty is 2 years imprisonment or the greater of:

500 penalty units; and
5 times the amount of duty that would be payable on the LPG at the rate of duty payable on excisable LPG on the day the LGP was used.[184]

For more information about offences and penalties refer to Chapter 9 - Offences.

7.3.2 WHEN CAN I APPLY FOR A REFUND OF EXCISE DUTY?

You can apply for a refund of excise duty paid on excisable fuel products if the following circumstances apply:

Duty has been paid on fuel that was lost or destroyed.

Duty has been paid on excisable fuel products, however it is later found that, while the goods were subject to excise control (i.e. while they were at the licensed site), they deteriorated or had been damaged, pillaged, lost or destroyed,[185]

Duty-paid fuel products, while the goods are subject to excise control, are not worth the amount of excise duty paid.[186]

Example 7G

A holder of a manufacturer licence who does not have a PSP pays the excise duty on fuel products, being 200 litre drums of solvent, in accordance with a pre-payment return. They receive a delivery authority. Before the fuel products are removed from the licensed premises they become unsaleable, due to changed packaging requirements resulting from legislative changes made by the State Government relating to the labelling of hazardous goods, and the fuel cannot be sold as it is uneconomical to repackage.

As the fuel products were still subject to excise control when they became unsaleable, the licence holder can apply for a refund of duty on the fuel products. As a consequence an application for a remission would be required to allow the licence holder to destroy the goods and remove from their stock records. Upon receipt of this application and satisfactory documentary evidence of the destruction of the fuel products the refund will be paid.

Duty has been paid on LPG for non-transport use through manifest error of fact or patent misconception of the law

LPG that is sold for non-transport use is incorrectly duty paid as the distributor did not apply the remission. This only applies if the LPG was sold to a person for a price that excluded the excise duty amount. If it included an amount for excise duty a refund would only be payable if an amount equal to the excise duty has been refunded or credited to the person.[187]

This is to avoid the end user claiming a fuel tax credit on the LPG in addition to a refund claim being made by the supplier.

Duty has been paid on goods (other than gaseous fuel) through manifest error of fact or patent misconception of the law.[188]

This circumstance applies to an error that is evident, obvious or apparent and also in situations where duty has been paid for goods entering home consumption that are not in fact excisable. In both cases a refund of the duty paid would be payable.

Example 7H

The system used by an entity to record deliveries into home consumption and calculate their duty liability on a weekly basis, incorrectly identifies a sale of kerosene for aviation use as tariff item 10.16 and pays excise duty at a rate of $0.389 per litre rather than the applicable rate of $0.03556 per litre. The entity identifies the error after the end of the settlement period. It is eligible to apply for a refund for the difference between the duty paid and the duty payable.

Duty-paid goods have been taken up as ship's stores or aircraft's stores.[189]

Ship's stores on ships undertaking an international voyage and aircraft stores on aircraft undertaking international flights are not subject to excise duty. Where duty has been paid and the excisable fuel products are subsequently re-directed for use on ships or aircraft travelling overseas (for example bunker fuel), this refund circumstance may apply. As fuel that is used to power a ship or aircraft falls within the definition of ship's and aircraft's stores, a refund is payable on excise duty paid on fuel that is subsequently used in overseas ships and international aircraft. This circumstance does not apply where a fuel tax credit entitlement exists.

After duty has been paid on fuel, a bylaw is made under Part XV of the Excise Act and the effect is that duty is not payable or is payable at a reduced rate, on those goods. A refund of the duty or the difference in the duty rates is payable.[190]

Goods including fuel, gaseous fuel, oil and grease that are returned to a manufacturer or to a warehouse.[191]

All goods classified to item 10 or 15 of the excise tariff, other than goods that have been used.

The circumstance applies to petrol that is returned to a licensed petroleum terminal. Duty may be refunded when the petrol returns to underbond stock holdings. It does not have to be returned to the original manufacturer.

Returns can occur for a number of reasons, including:

contamination
over delivery, or
vapour recovery. This relates to vapour that is pumped out of a tank at a service station and captured within tanks on the delivery truck when fuel is delivered. The vapour is extracted from the tanker back at the licensed premises and is converted back to a liquid form and will eventually form part of another delivery.

Duty has been paid on excisable fuel products to which items 10 and 15 of the excise tariff apply, and they are sold in the following circumstances:

for the official or personal use of diplomatic or consular staff of foreign countries [192]
for use by the Government of another country, under an agreement between that Government and the Australian Government and not for trade [193]
for the official use of a foreign country under a Status of Forces agreement with the Australian Government and not for resale,[194] or
for the official of an international organisation or personal use of the holder of a high office of an international organisation to which the International Organisations (Privileges and Immunities) Act 1963[195]

7.3.3 WHEN CAN I APPLY FOR A DRAWBACK OF EXCISE DUTY?

You can apply for a drawback if you export fuel products that have had excise duty paid on them.[197]

Drawback of duty is not payable in the following circumstances:

the goods are stabilized crude petroleum oil or condensate there is no drawback of duty paid under items 20 or 21 of the Schedule to the Excise Tariff (Schedule)[198]
the goods are liquid petroleum obtained from naturally occurring petroleum gas[199]
if the excise duty has been refunded on the exported fuel products[200]
if after exportation the fuel products are re-landed in Australia,[201] or
the exported goods are relevant fuel which an entity has or had an entitlement to a fuel tax credit under the Fuel Tax Act 2006, or does or did not have an increasing fuel tax adjustment for the fuel. [202]

We will only pay a drawback if:[203]

prior to the exportation, you advise us via notice that you intend to claim a drawback (We can exempt you from this requirement, in writing, either on all claims for drawback or any particular claim.[204])
before exportation of the excisable fuel products on which duty has been paid, the goods are available for inspection by us, and
you keep records including those that show:
- that duty was paid on the fuel products (for example invoice), and
- the fuel products were exported (for example, an export declaration number or bill of lading)
you lodge a drawback claim in the approved form no later than 12 months after the fuel products were exported,
the claim sets out the amount of drawback and a statement that the goods have not been, or are not intended to be re-landed in Australia, and
the amount of the claim or an aggregate of claims is at least $50.

The amount of the drawback will not exceed the amount of excise duty that was paid.[205]

Example 7I

A fuel contractor arranges for duty-paid diesel to be sent to researchers studying porpoises on a remote Fijian island. The diesel is stored in 208 litre (55 US gallon) drums and stowed in the cargo hold of a ship. The contractor buys 20,000 litres of duty-paid diesel fuel from a fuel depot and arranges the shipping. The amount of excise duty on the fuel is $7,780.00 (20,000 x $0.389).

The contractor applies for a drawback of the duty paid on the fuel. To support the application, they provide the Tax Office with a copy of the invoice for the fuel purchase, and a copy of the Certificate of Clearance stamped and issued by the Australian Customs and Border Protection Service.

Fuel used in an overseas ship and international aircraft that meets the definition of ship's stores and aircraft's stores (fuel bunkers) is not considered to be exported. In a situation where these fuels are delivered duty paid to overseas ships or international aircraft an entitlement to a fuel tax credit or a refund of the excise duty may arise.

For more information about fuel bunkers refer to the Bunker fuel and commercial shipping guide.

7.3.4 WHAT HAPPENS IF I AM OVERPAID A REFUND OR DRAWBACK?

If we overpay you by way of a refund or drawback then you must pay the overpaid amount back. We can demand that you pay back the amount and if you do not repay the amount within the time we specify in the demand we can recover the amount through the courts as a debt due to the Commonwealth.[206]

7.3.5 WHEN ARE EXCISABLE FUEL PRODUCTS EXEMPT FROM EXCISE DUTY?

Excisable fuel products are exempt from duty if they are:

exported
sold for use as ship's or aircraft's stores[207]
with our approval, delivered as small samples,[208] or
subject to remission without application.[209]

What are ship's and aircraft's stores?

Ship's and aircraft's stores are goods for the use of passengers or crew on an international journey or for the service of ships or aircraft on an international journey.It includes fuel used to power the overseas ship and international aircraft.[210]

If you supply ship's or aircraft's stores underbond, you must obtain a movement permission to move the goods from the licensed premises to the place of export.

Can I deliver samples without payment of duty?

Yes, you may be able to deliver small samples without payment of duty and without entry. You must apply to us for approval and your application must:

be in writing
specify who the sample is for
specify the quantity for approval, and
specify the purpose of the sample.

In determining what constitutes a sample we would consider each application on a case by case basis, but as a guide the sample volume would need to be less than 10 litres.

You do not include approved samples in your excise return; however, you must keep records of any samples you deliver.

To apply for approval, send your application to us by:

faxing to 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
posting to

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

7.3.5.1 WHEN IS CNG, LPG and LNG EXEMPT FROM EXCISE DUTY?

CNG

CNG is exempt from duty if it was compressed:

for use other than as a fuel for a motor vehicle; or[211]
other than in the course of carrying on an enterprise; or[212]
for use as a fuel for a forklift vehicle that is used primarily off public roads; or[213]
- at a residential premises; and
- the rate at which the gas was compressed at those premises is not more than 10 kilograms of compressed natural gas per hour; and
- the gas is not sold or otherwise supplied in the course of carrying on an enterprise. This gas can be used as a fuel for a motor vehicle.[214]

The phrase 'in the course of carrying on an enterprise' has the same meaning as when it is used in the A New Tax System (Goods and Services Tax) Act 1999.

A 'residential premises' has the same meaning as given in the A New Tax System (Goods and Services Tax) Act 1999.

LPG and LNG

LPG and LNG are exempt from duty if you are a licensed manufacturer and you use the fuel at the premises specified in the licence in the process of manufacturing:

petroleum condensate or stabilised crude petroleum oil; or
liquefied petroleum gas, liquefied natural gas or other hydrocarbons.[215]

7.4 PROCEDURES

7.4.1 HOW DO I APPLY FOR A REMISSION OR REFUND?

An application for a remission (excluding automatic remissions[216]) or refund must be submitted in the approved form and state the nature and particulars of the claim. Records to substantiate your claims must be maintained and produced when requested.[217]

You must lodge your refund application within 12 months after the day when the excise duty was paid for the following refund circumstances:[218]

fuel while subject to the CEO's control that has deteriorated, been damaged, pillaged, lost or destroyed, or become unfit for human consumption
fuel while subject to the CEO's control that is not worth the amount of duty paid on it
duty was paid on goods (other than gaseous fuels) through manifest error or fact or patent misconception of the law.
LPG and LNG that is sold for non-transport use is incorrectly duty paid as the distributor did not apply the remission. This only applies if the LPG was sold to a person for a price that excluded the excise duty amount. If it included an amount for excise duty a refund would only be payable if an amount equal to the excise duty has been refunded or credited to the person
fuel supplied as bunker fuel to a vessel or aircraft that undertakes an international voyage or flight that does not create an entitlement to a fuel tax credit.

For all other items listed in the table at Clause 1 of Schedule 1 (excluding those dealing specifically with stabilized crude oil and condensate) there is no time limit for lodging your application for refund.

To ensure the excisable fuel products that are the subject of a remission due to deterioration or contamination, do not find their way into home consumption we may wish to inspect or supervise the disposal of the goods. If underbond goods must be destroyed off site, you must apply for a movement permission to move them from the licensed premises to the place of destruction. With permission you may be able to move goods that have been delivered into home consumption and then the subject of a refund and remission claim, directly to a non-licensed premise for destruction. [219]

Unless fuel products have been accidentally destroyed, you should contact us before moving or destroying any that are subject to remission or refund. We will provide you with direction and advise if the goods are to be inspected or the destruction supervised.

For more information about movement permissions refer to Chapter 5 - Movement permissions.

You can elect to have a refund credited to your excise account or paid directly into your bank account.

To apply for a remission, send us a completed Excise remission (NAT 4289). You can use the Excise remission instructions (NAT 15769) to help you complete this form.

To apply for a refund, send us a completed Excise refund (NAT 4288). You can use the Excise refund instructions (NAT 15771) to help you complete this form. Applications can also be made on company letterhead as long as all the relevant information is provided.

If you are not satisfied with our decision to refuse your refund or remission, you can request a review of our decision by lodging an objection within 60 days.

For more information about your review rights refer to Chapter 8 - Reviews and objections.

7.4.2 HOW DO I APPLY FOR A DRAWBACK?

To apply for a drawback of duty, send us a completed Excise drawback (NAT 4287). You can use the Excise drawback instructions (NAT 15688) to help you complete this form. Applications can also be made on company letterhead as long as all the relevant information is provided.

Your drawback application must be received not later than 12 months after the day on which the goods were exported.[220]

If we refuse to pay your drawback and you are not satisfied with our decision you can request a review of our decision by lodging an objection within 60 days.

For more information about your review rights refer to Chapter 8 - Reviews and objections.

7.4.3 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on remissions, refunds, drawbacks and exemptions contact us as follows:

phone 1300 137 290
fax 1300 130 916,
email us at ATO-EXC-Petroleum@ato.gov.au or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

7.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO REMISSIONS, REFUNDS, DRAWBACKS AND EXEMPTIONS?

The following are the penalties that may apply after conviction for an offence.

Evade

If you evade payment of any duty which is payable, the maximum penalty is 5 times the amount of duty on the excisable fuel products or where a court cannot determine the amount of that duty the penalty is a maximum of 500 units.[221]

False or misleading statements

7.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol,
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG); and
liquefied petroleum gas (LPG).

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[223] is the document that you use to advise us:

the volume of excisable fuel products that you have delivered into home consumption during the period designated on your PSP, or
the volume of excisable fuel products that you wish to deliver into home consumption following approval.

Home Consumption[224]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

7.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

7.7.1 Excise Act 1901

Subsection 4(1) - Definitions

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 61A - Permission to remove goods that are subject to CEO's control

Section 64 - Delivery of samples free of duty

Section 77HA - Compressed natural gas that is exempt from excise duty

Section 77HB - Liquefied petroleum gas and liquefied natural gas that is exempt from excise duty

Section 77L - Notice requirements for sales or supplies of LPG to which an LPG remission applies

Section 77M - Penalty for using LPG for excisable LPG use

Section 78 - Remissions, rebates and refunds

Section 79 - Drawbacks

Section 80 - Recovery of overpayments of refunds, rebates, and drawbacks

Section 117BA - Unlawfully selling LPG that is used for an excisable LPG use

Section 160A - Ship's stores and aircraft's stores

7.7.2 Excise Regulations 2015

Section 10 - Application for remission, rebate or refund of excise duty

Section 11 - Period for making an application for refund or rebate of excise duty

Section 14 - Drawback of excise duty on goods

Section 15 - When drawback of excise duty is not payable

Section 16 - Conditions relating to drawback of excise duty - general

Section 22 - Sales or supplies of LPG to which LPG remission applies - contents of notice

Section 23 - Sales or supplies of LPG to which LPG remission applies - circumstances when notice not required

Clause 1 of Schedule 1- Circumstances in which remission, rebate or refund may be made on application

Clause 2 of Schedule 1 - Circumstances in which remission, rebate or refundmay be made without application

7.7.3 Excise Tariff Act 1921

7.7.4 Crimes Act 1914

8.3.1 WHAT ARE INFORMAL REVIEWS?

08 REVIEWS & OBJECTIONS

8.1 PURPOSE

8.2 INTRODUCTION

8.3 POLICY AND PRACTICE

8.3.2 CAN I OBJECT AGAINST ANY DECISION?

8.3.3 WHEN CAN I SEEK AN EXTERNAL REVIEW?

8.4 PROCEDURES

8.4.1 HOW DO I REQUEST AN INFORMAL REVIEW?

8.4.2 FACILITATION PROCESS

8.4.3 HOW DO I LODGE AN OBJECTION?

8.4.4 HOW DO I REQUEST AN EXTERNAL REVIEW?

8.4.5 WHAT DO I DO IF I NEED MORE INFORMATION?

8.5 PRIVATE RULINGS

8.5.1 HOW DO I APPLY FOR A PRIVATE RULING?

8.5.2 CAN I RELY ON A PRIVATE RULING?

8.5.3 FOR WHAT PERIOD CAN I RELY ON A PRIVATE RULING

8.5.4 CAN I OBJECT TO A PRIVATE RULING?

8.6 LEGISLATION (quick reference guide)

8.6.1 Excise Act 1901

8.6.2 Taxation Administration Act 1953

8.1 PURPOSE

This chapter deals with:

the types of review you can ask for
what decisions you can object to
when you can seek an external review
how to request an informal review
how to lodge an objection, and
how to request an external review.

8.2 INTRODUCTION

We will provide you with a clear explanation of any decision we make about your excise affairs. If you need more information about our decisions, contact us using the details we provide when we advise you of our decision.

If you're not satisfied with a decision we've made, you can ask for it to be reviewed by:

informal review[226]
objection,[227] or
external review.[228]

Where there is more than one review option, we will explain how these differ. For example, some reviews look at questions of law and others involve checking that we followed the correct process in reaching our decision. Which review option is best will depend on your situation.

8.3 POLICY AND PRACTICE

8.3.1 WHAT ARE INFORMAL REVIEWS?

Under the Taxpayers' Charter, you can seek an informal (internal) review where you believe that we have made a mistake, not complied with the law, or interpreted or applied the law incorrectly.

Your dissatisfaction with our decision may be treated as an informal review, both prior to or after receiving notification of the decision in writing.

An informal review does not waive or defer your rights to object to the decision.

However, if you choose to pursue an informal review, awaiting the outcome of the informal review may prejudice your right to object to the decision and, ultimately, your right for external review. For example, the time allowed to lodge an objection may have expired by the time an informal review is finalised.

This is particularly crucial if the original decision attracts only a 60-day objection period.

8.3.2 CAN I OBJECT AGAINST ANY DECISION?

No, you can only lodge an objection against those decisions set out in sections 39Q and 162C of the Excise Act. These include decisions:

made under the licensing provisions of the Excise Act[229] such as:
- refusal to grant a licence
- imposing and varying conditions on a licence, or
- suspension, cancellation or refusal to renew a licence
to demand an amount in relation to goods not satisfactorily accounted for,[230] or
relating to a drawback, refund or remission of duty.[231]

However, if you informally ask us to review a decision we will try to resolve any problems as quickly as possible. If we have made a mistake, we want to fix it at the least cost to both of us.

8.3.3 WHEN CAN I SEEK AN EXTERNAL REVIEW?

For decisions in relation to an objection, or where there is no right of objection, you may be able to apply to the Federal Court or Federal Magistrates Court under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act).

8.4 PROCEDURES

8.4.1 HOW DO I REQUEST AN INFORMAL REVIEW?

To request an informal review, use the contact details we provide to contact the person or area of the Tax Office handling your case. The review will be conducted by a tax officer who was not involved in making the original decision.

We will advise you of the outcome of our review within 28 days of receiving all the information we need. If we cannot finalise the review within 28 days or we need more information from you, we will contact you within 14 days to obtain the information we need or negotiate an extended reply date.

8.4.2 FACILITATION PROCESS

Facilitation is a process where an impartial ATO facilitator meets with you (and/or your representative) and the ATO case officer/s to identify the issues in dispute, develop options, consider alternatives and attempt to reach a resolution. The ATO facilitator will be an officer that has not been involved in the dispute and who is independent and impartial.

A facilitator will not establish facts, take sides, give advice, make a decision or decide who is 'right or wrong'. The facilitator guides the parties through the process and ensures open lines of communication.

You can make a request for facilitation (including via your representative) by emailing facilitation@ato.gov.au. Alternatively the ATO may offer you facilitation to help resolve a dispute.

8.4.3 HOW DO I LODGE AN OBJECTION?

You can lodge an objection by completing an objection form or writing your own objection document. Your objection must:

be in writing
lodged within 60 days after you receive the notice of the decision, and
set out a full and detailed account of the grounds for the objection.[232]

If you are a registered user you can lodge your objection through the business portal at www.bp.ato.gov.au.

You can also lodge your objection:

by faxing it to 1300 650 128
by e-mailing it to ExcAdvice@ato.gov.au
in person, at your nearest Tax Office, or
by posting it to

Australian Taxation Office

PO Box 3524

ALBURY NSW 2640

If you do not lodge your objection within 60 days we will not consider your objection, unless you provide the reasons for late lodgement. We will consider these reasons before continuing with the objection process.

If we refuse additional time to lodge an objection, you may have this decision reviewed by the Administrative Appeals Tribunal (AAT).

We will make a decision about your objection within 56 days of receiving all the necessary information. If we need more information or we cannot make a decision within 56 days, we will contact you within 14 days to obtain the information we need or to negotiate an extended reply date.

If you are dissatisfied with the objection decision, there are further review rights available to you. You can:

apply to the AAT for a review of the decision, or
appeal against the decision to the Federal Court.

To obtain a copy of our objection forms and for more information about how to lodge an objection, refer to How to lodge an objection on our website at www.ato.gov.au

For more information about what to do if you believe your legal rights or the standards outlined in the Taxpayers' Charter have not been met, refer to If you're not satisfied (NAT 2556).

8.4.4 HOW DO I REQUEST AN EXTERNAL REVIEW?

We suggest you obtain legal advice if you are considering using external review options provided by the AAT or Federal Court.

8.4.5 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on reviews and objections contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

8.5 PRIVATE RULINGS

A ruling is an expression of our opinion of the way a relevant provision applies or would apply to you in the administration or collection of excise duty.

We may, on application by you, make a written ruling on the way we consider a particular provision applies or would apply to in relation to a stipulated set of facts and in a particular circumstance.[233]

8.5.1 HOW DO I APPLY FOR A PRIVATE RULING?

You, your agent or legal personal representative may apply in the approved form for a private ruling. You, your agent or legal personal representative may also withdraw the application at any time before the private ruling is made.

We must confirm in writing of the withdrawal.[234]

To obtain a copy of our Private ruling application form and for more information about how to lodge an application, refer to How to apply for a private ruling on our website at www.ato.gov.au

8.5.2 CAN I RELY ON A PRIVATE RULING?

A private ruling binds us if it applies to you and you act in accordance with it. If you act in accordance with the private ruling and the law turns out to be less favourable to you than the ruling provides, you are protected by the ruling from any adverse consequences.[235]

8.5.3 FOR WHAT PERIOD CAN I RELY ON A PRIVATE RULING?

Unless we specify in the private ruling when it begins and ceases to apply, you may rely on the private ruling from the time it is made.[236]

We may revise a private ruling we issue to you. The revised rules will apply from the date it is issued or such later time that we specify in the ruling. The original ruling will cease to apply from that time.[237]

8.5.4 CAN I OBJECT TO A PRIVATE RULING?

You can object to a private ruling that applies to you if you are dissatisfied with it.

However you cannot object against a private ruling if:

the ruling relates to excise duty, or another amount, payable in relation to the goods; and
we have made a decision about the excise duty, or other amount, payable in relation to those goods; and
the decision is reviewable.[238]

Example: 8A

A licensed manufacturer anticipates manufacturing a new type of excisable good. They seek a private ruling as to the amount of duty that would be payable on the good. They do not accept the amount advised by us in a private ruling and they lodge an objection.

Subsequently, they commenced manufacture of the excisable goods. They pay the amount of duty that we claimed was payable in the private ruling, and wish to commence an action against us under section 154 of the Excise Act. Their ability to commence an action under section 154 is limited to matters that were not dealt with in the private ruling to which they have lodged an objection.

If the decision on the private ruling is not yet made, the manufacturer may withdraw the objection to the private ruling and commence an action under section 154 of the Excise Act in relation to all matters.

8.6 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

8.6.1 Excise Act 1901

Section 39Q - Review of decisions

Section 61A - Permission to remove goods that are subject to CEO's control

Section 154 - Deposit of duty

Section 155 - Limited dispute rights because of objection against private ruling

Section 162C - Review of decisions

8.6.3 Taxation Administration Act 1953

Section 14ZU - How taxation objections are to be made

Part IVC - Taxation objections, reviews and appeals

Section 357-60 - When rulings are binding on the Commissioner

Section 359-5 - Private rulings

Section 359-10 - applying for a private ruling

Section 359-25 - Time of application of private rulings

Section 359-55 - Revised private rulings

Section 359-60 - Objections, reviews and appeals relating to private rulings

09 OFFENCES

9.5 INFRINGEMENT NOTICES

9.6 APPLICATION OF THE CRIMINAL CODE

9.7 TERMS USED

9.8 LEGISLATION (quick reference guide)

9.8.1 Excise Act 1901

9.8.2 Crimes Act 1914

9.8.3 Criminal Code Act 1995

9.1 PURPOSE

This chapter deals with:

offences under the Excise Act
penalties
infringement notices, and
application of the Criminal Code.

9.2 INTRODUCTION

This chapter is a general discussion on offences. It is not meant as legal advice and you are encouraged to seek independent legal advice in relation to your own individual circumstances.

There are a number of acts or omissions under the Excise Act that are offences.

A conviction for an offence may result in a penalty as provided for within the Excise Act. The penalty provided may be in the form of penalty units, a term of imprisonment or an amount of money calculated by a set formula.

9.3 OFFENCES

Certain acts or omissions are offences under the Excise Act for which penalties are prescribed.

For penalties to apply to an offence (except where an infringement notice has been issued), you must first be convicted of the offence in a court of law following prosecution.

Certain offences under the excise legislation are strict liability offences as defined in section 6.1 of the Criminal Code (Schedule to the Criminal Code Act 1995). Essentially, strict liability means that the offence consists of the physical act or omission only. It is not necessary for the court to find that you knowingly committed, or were reckless or negligent in relation to the act or omission.

Some sections of the Excise Act prescribe the following two levels of offence for similar conduct:

a higher penalty applies to an act or omission intentionally or recklessly committed,(i.e. where there is a 'fault' element), and
a lower penalty applies to the same act or omission on a strict liability basis, (i.e. where no 'fault' element needs to be proven).

Example 9A

Section 26 of the Excise Act prescribes that licensed manufacturers are to manufacture in accordance with the Act and their licence.

(1) A licensed manufacturer must not intentionally manufacture excisable goods knowing, or being reckless as to whether, the manufacture contravenes this Act or the manufacturer licence.

Penalty: 2 years imprisonment or 500 penalty units.

(2) A licensed manufacturer must not manufacture excisable goods in contravention of this Act or the manufacturer licence.

Penalty: 100 penalty units.

(3) Strict liability applies to subsection (2).

9.4 PENALTIES

The Excise Act contains many provisions that include a penalty at the foot of the section or subsection. This means that if you are convicted of an offence against the particular provision then you can receive a penalty not exceeding the penalty mentioned.[239] The penalty listed is thus the maximum penalty but the courts can impose a lesser penalty.

Example 9B

A person manufactures excisable fuel products without a manufacturer licence. This is a contravention of subsection 25(2) of the Excise Act which says that a person shall not manufacture excisable goods without a manufacturer licence. The penalty at the foot of subsection 25(2) of the Excise act is 100 penalty units. We bring a court action against the person and the court convicts the person. The penalty cannot exceed 100 penalty units but it can be less.

As indicated above certain offences provide for alternative penalties, for example subsection 25(1) of the Excise Act provides for a penalty of 2 years imprisonment or 500 penalty units.

For some offences if a person is convicted of that offence then the courts can impose both penalties.[240]

Where an offence also causes goods to be forfeited,[241] conviction by the courts results in the forfeited goods being condemned.[242] This means they are no longer your property and we can dispose of the goods as we see fit.

9.5 INFRINGEMENT NOTICES

We may issue an infringement notice[243] as an alternative to prosecution for unlawfully possessing, or unlawfully selling excisable goods.[244] An infringement notice imposes a penalty of 20 penalty units.

To issue an infringement notice, we must have a reasonable belief that you have committed the offence. Notices must be issued within 12 months of the commission of the offence.[245]

In the event of non-payment, prosecution action may be brought against you.

You cannot be prosecuted for the same offence where an infringement notice has been issued unless the infringement notice is withdrawn.

We can withdraw an infringement notice and if we do so after you have paid the penalty we must refund that to you.[246]

9.6 APPLICATION OF THE CRIMINAL CODE

Chapter 2 of the Criminal Code applies to offences against the Excise Act. However, Parts 2.5 and 2.6, which are in Chapter 2, do not apply.[247] In some courts, Excise prosecutions are able to be treated as criminal matters while in other courts they are treated as civil matters.

9.7 TERMS USED

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

9.8 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

9.8.1 Excise Act 1901

Section 5 - Penalty at foot of sections

Section 6B - Application of the Criminal Code

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 116 - Forfeiture

Section 117 - Unlawful possession of excisable goods

Section 127A - Alternative penalties

Section 129A - Purpose and effect of this Part (Part XA - penalty instead of prosecution)

Section 129B - When an infringement notice may be issued

Section 129C - Matters to be included in an infringement notice

Section 129D - Due date for penalty

Section 129E - Effect of payment of penalty

Section 129F - Withdrawal of infringement notice

Section 151 - Conviction to operate as a condemnation

9.8.2 Crimes Act 1914

Chapter 2 - General principles of criminal responsibility

Section 4D - Penalties

9.8.3 Criminal Code Act 1995

Section 6.1 - Strict liability

10 FUEL IN THE EXCISE TARIFF

10.1 PURPOSE

10.2 INTRODUCTION

10.2.1 WHAT IS FUEL IN THE SCHEDULE TO THE EXCISE TARIFF ACT?

TEMPERATURE CORRECTION OF VOLUME

CONVERSION OF WEIGHT TO VOLUME

10.3 POLICY AND PRACTICE

10.3.1 WHAT IS CLASSIFIED TO ITEM 10?

10.3.2 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 10

GASOLINE - LEADED AND UNLEADED PETROL

DIESEL

10.3.3 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 15

10.4 PROCEDURES

10.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

10.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO THE EXCISE TARIFF?

10.6 TERMS USED

10.7 LEGISLATION (quick reference guide)

10.7.1 Excise Act 1901

10.7.2 Excise Tariff Act 1921

10.7.3 Excise Regulations 2015

10.7.4 Crimes Act 1914

10.1 PURPOSE

This chapter deals with:

the items in the Schedule to the Excise Tariff Act (Schedule) that apply to fuels (including biofuels) and other petroleum products, oils, greases and hydraulic fluids
what kinds of goods manufactured or produced in Australia are subject to excise
the classifications of these products
the rates of excise that apply
in what circumstances these classifications and rates apply, and
penalties that can apply to offences in relation to the Excise Tariff.

10.2 INTRODUCTION

10.2.1 WHAT IS FUEL IN THE SCHEDULE TO THE EXCISE TARIFF ACT?

Fuel is covered by items 10, 15, 20 and 21 (however we are not discussing items 20 stabilised crude oil or 21 condensate in this guide) of the Schedule.

All excisable fuel products are classifiable to an item of the Schedule, which uses a two-tiered numbering system of items and then subitems.

Items in the Schedule have a general description (which is also referred to as the preamble) which describes the goods classified to the item. Under this general description are listed specific descriptions (subitems) to include or exclude particular products. For goods to be classified to a subitem, they must first be goods of the kind described in one of the relevant items.

Example 10A

Bitumen is excluded from item 10 by paragraph (i) of the item 10 of the Schedule Bitumen is therefore not a 'petroleum product not elsewhere included' under subitem 10.28 of the Schedule.

The scope of the subitems may narrow the application of a tariff item in the Schedule.

Example 10B

Paragraph 10(g) of the Schedule refers to blends other than blends covered by subsections 77H(1), 2A, 2B or (3) of the Excise Act.

Subitem 10.30 of the Schedule (which covers all blends other than 3 specific biofuel blends) applies only to blends that can be used as fuel in an internal combustion engine. This further restricts the application of excise to certain blends.

Using imported products

Imported products come under Australian Customs and Border Protection Services (ACBPS) administration and attract customs duty. Imported fuel products can, in certain circumstances, be used in the manufacture of excisable products. This includes blending. The result of this is the creation of an excise liability and, provided the correct Customs requirements and procedures are followed, the extinguishment of the customs duty liability.

It is common practice for fuel importers to blend imported goods with excisable goods. Blending results in the manufacture of an excisable fuel product.

You should refer to ACBPS for the import related requirements, however if you wish to use imported fuel in the manufacture of excisable goods you should speak to us. In these circumstances you would need an excise manufacturer licence and a warehouse licence issued under section 79 of the Customs Act 1901 (Customs Act).

Imported fuel is an excise equivalent good (EEG) and the ATO administers EEG's under delegation from ACBPS. We therefore assess applications for warehouse licences for EEG's issued under section 79 of the Customs Act.

For more information on excise manufacture refer to Chapter 2 - Licensing: Applications.

Product names and descriptions

Some product names in the Schedule are defined in the legislation. The definitions are found in:

section 3 of the Excise Tariff Act (e.g. 'biodiesel')
the preamble to the Schedule to the Excise Tariff Act ('lubricant/fluid/oil products'), and
section 4 of the Excise Act
- condensate.
- LPG

Most products however are not specifically defined, and take their meaning according to ordinary usage. Ordinary usage may be determined by physical characteristics, how the products are used or current industry practice. For example:

common names for products or product types including 'gasoline', 'diesel', 'white spirit', 'kerosene', 'heating oil' and 'transmission oil'
common names for chemical compounds including 'benzene' and 'toluene'
descriptive expressions used in the legislation, including 'denatured ethanol', 'liquid aromatic hydrocarbons' and 'stabilised crude petroleum oil'.

Products to which a fuel quality standard applies are excisable even if they do not meet the applicable standard. For example biodiesel made through chemically altering vegetable oils to form mono-alkyl esters is excisable even if it does not meet the fuel quality standard for biodiesel.

Fuel quality standards are made by the Commonwealth department responsible for the administration of the Fuel Quality Standards Act 2000, which provides a legislative framework for setting national fuel quality and fuel quality information standards. [248]The requirements are in place to reduce the adverse effects of motor vehicle emissions on air quality and human health, and to enable Australia to effectively adopt new vehicle engine and emission control technologies.

Fuels to which fuel quality standards apply include petrol, diesel and biodiesel.

'For use'

A number of item classifications in the Schedule are dependent on the intended use of the goods.

The expression 'for use' means the intended end-use of the product at the time the goods were delivered from excise control in Australia.

Example 10C

Examples of 'for use' in the Schedule:

Subitem 10.6 Gasoline for use as fuel in aircraft

Item 15 Goods...other than (a) goods for use as a fuel...

Items on your excise return

When you enter a product on your excise return under a classification from the Schedule that stipulates a particular use, you must have reasonable grounds for believing the product will be used for that purpose. Where a classification excludes a particular use, you must have reasonable grounds for believing the product will not be used for that purpose.

If you deliver goods into home consumption you need to satisfy yourself that the goods will not be used contrary to the tariff item classification you have entered on your return.

You need to keep documentation to substantiate the information you include on your excise return.

For more information about keeping records refer to Chapter 3 - Licensing: Assessing applications (see Section 3.4.3 - What records do I need to keep?).

Rates of duty when the item is measured by volume

Temperature correction of volume

The volume of fuel products is affected by density and temperature (i.e. the volume changes due to temperature changes). In most instances, where rates of duty refer to volume in litres, you should use the volume of the product as if it was measured at 15°C.

For more information on measuring the volume of liquids please refer to Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No. 1).

*Standardised calculations of measured quantities of petroleum fluids, regardless of point of origin, destination or units of measure used by custom or statute, have been adopted by petroleum companies through an international agreement. The result is the Petroleum Measurement Tables Volume Correction Factors, Volume VIII[249].

Conversion of weight to volume

There are instances when product is invoiced in kilograms and needs to be converted to litres, such as to:

record it in stock records, and
include it in your excise return.

The method used to calculate litres of fuel is the standard conversion of a weight measurement to a liquid measurement which is to divide the weight of the fuel product by its density (corrected to 15°C), e.g. 100 kilograms of fuel oil, with a corrected density of 0.94, converts to 106 litres (100 / 0.94 = 106.38).

Conversion of measurement of LPG

If you have a liability for excise duty on LPG which was measured in kilograms you can convert the unit of measurement from kilograms to litres by using the conversion rate contained in the Excise Regulation 2015 (Excise Regulation).[250]

You may also, under certain circumstances, use a conversion method determined by the Commissioner in the Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1).

Conversion of unit of measurement in the Excise Regulations

LPG that is measured in kilograms may be converted to litres at the rate of 1 kilogram to 1.885 litres. You may only use this conversion factor when the LPG has not been measured using volumetric measurement equipment.

If you decide to apply a particular unit of measurement for LPG which is used for a particular purpose, you are required to apply that unit of measurement throughout the financial year for all LPG used for that purpose. You may however, seek our permission to use a different unit of measurement during the financial year for that LPG.

The conversion rate is subject to periodic review to ensure it continues to accurately reflect the physical characteristics of LPG supplied in the Australian market.

Example 10D

John's business is licensed for excise purposes. John supplies LPG to wholesale customers who collect the product from John's LPG refinery ('wholesale sales'). In these circumstances, the LPG supplied is measured in tonnes by weighbridge measurement and is not measured using temperature and pressure corrected volumetric measurement equipment.

John also separately delivers LPG from his refinery in his own tankers ('tanker deliveries to customers'). In these circumstances, measurement occurs in litres when delivered to clients.

John is able to determine duty liability for wholesale sales in kilograms and then convert to litres using the conversion factor. John can measure LPG for duty liability purposes in litres for the tanker deliveries to customers.

John is not able to change the measurement unit from kilograms to litres for wholesale sales, or from litres to kilograms for deliveries to customers. If John wishes to change measurement units he can obtain permission from us or wait until the end of the financial year.

Conversion of unit of measurement in the Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1)

The Determination prescribes methods that can be used to determine the volume of excisable LPG delivered into home consumption from an excise licensed establishment.

There are three methods for converting the measurement of transport LPG to litres. The method you may use is dependent on the amount of transport LPG you deliver or reasonably expect to deliver into home consumption in an accounting period.

You are required to use the same method of conversion for the transport LPG you deliver in the accounting period unless we have given you the authority, in writing, to use a different method during the period.

The accounting period is the same period you use for income tax purposes which generally is from 1 July to 30 June of the following year. You may use a different period which we have approved in writing.

Method 1 - based on density

This method is used where:

the total amount of transport LPG you deliver, or reasonably expect to deliver, into home consumption from all of your Excise licensed premises exceeds 150,000 litres in the accounting period; and
is measured in kilograms not using volumetric measurement equipment.

The amount of kilograms is converted to litres by either:

the use of a factor based on the measured density of the LPG at ambient temperature corrected to 15^o Celsius using the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables for Light Hydrocarbon Liquids - Density range 0.500 to 0.653 Kg/L at 15^oC; or
the use of the conversion factor stipulated in section 24 of the Excise Regulation.

Example 10E

If a quantity of transport LPG delivered into home consumption has been weighed as having 15.682 tonnes, then the volume of the LPG would be determined by applying the conversion factor 1.885 as stipulated in the Excise Regulation for every kilogram of transport LPG (unless the person elects to measure the density of the quantity of transport LPG and apply a specific conversion factor). Application of the Excise Regulation factor 1.885 would result in a volume of 29,561 litres. Excise duty is then calculated on 29,561 litres for a person who has delivered, or reasonably expects to deliver transport LPG exceeding 150,000 litres per accounting period.

Method 2 - based on equilibrium vapour pressure

This method is used where;

the total amount of transport LPG you deliver, or reasonably expect to deliver, into home consumption from all of your Excise licensed premises exceeds 150,000 litres in the accounting period; and
is measured using uncorrected volumetric measurement equipment.

This method applies two correction factors.

The first correction factor uses the American Petroleum Institute Manual of Petroleum Measurement Standards at Chapter 11.2.2M - Compressibility Factors for Hydrocarbons: 350-637 kg/m ³ Density (15° C) and -46° C to 60° C Metering Temperature, to correct the volume that was metered under operating pressure to the corresponding volume at the equilibrium vapour pressure to account for pressure effects.

The second correction factor uses the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables for Light Hydrocarbon Liquids - Density Range 0.500 to 0.653 Kg/L at 15º C, to correct the volume to 15º C to account for temperature effects.

Example 10F

A quantity of transport LPG is dispensed from an LPG tanker which meters an uncorrected volume of 30,000 litres under a pressure of 3000 kilopascals at a temperature of 27.5° C. During the delivery, the density and equilibrium vapour pressure of the LPG is also measured (at 27.5° C) and shown to be 515 kg/m³ and 510 kilopascals respectively. To determine the corrected volume of LPG delivered, the metered volume would need to be adjusted by the pressure correction factor 1.0121 (as per the API Petroleum Measurement Compressibility Factor Tables for Hydrocarbons: 350-637 kg/m³) to determine the volume at equilibrium vapour pressure and the volume temperature correction factor 0.9675 (as per the ASTM Petroleum Measurement Tables for Light Hydrocarbon Liquids) to determine the volume at 15° C. Application of the relevant factors would result in an adjusted volume of 29,367 litres. Excise duty is then calculated on 29,367 litres for a person who has aggregated clearances of transport LPG exceeding 150,000 litres per accounting period.

Method 3 - based on ambient temperature and operating pressure

This method may be used where:

the total amount delivered, or reasonably expected to be delivered into home consumption from all your Excise licensed premises in the accounting period is less than 150,000 litres; and
there is no requirement on your PSP to correct to 15° C and equilibrium vapour pressure.

Under this method you may either correct the volume of transport LPG using either Method 1 or 2 or use the measured volume of transport LPG at ambient temperature and operating pressure.

Example 10G:

Following on from Example 10F, if a person's aggregated clearances of transport LPG are less than 150,000 litres per accounting period, and that person delivers transport LPG into home consumption using uncorrected volumetric measuring equipment, that person may either apply Method 2 and correct the volume of fuel to 15° Celsius and equilibrium vapour pressure (i.e. 29,367 litres) or use the uncorrected measured volume of fuel at ambient temperature and operating pressure (i.e. 30,000 litres). If the uncorrected measured volume is used, excise duty is then calculated on 30,000 litres for a person who has aggregated clearances of transport LPG not exceeding 150,000 litres per accounting period.

The Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1) is available on our website

Conversion of measurement of Compressed Natural Gas (CNG)

If you have a liability of duty for excisable CNG and the quantity of CNG is measured in megajoules you are required to use the conversion rate contained in the Excise Regulation. The conversion rate, as at 1 April 2015, is 1 megajoule of CNG to 0.01893 kilograms of CNG.[251]

The conversion rate is subject to periodic review to ensure it continues to accurately reflect the physical characteristics of CNG supplied in the domestic market.

Conversion of unit of measurement in the Excise (Mass of CNG) Determination 2012 (No. 1)

The Determination prescribes methods that can be used to determine the mass of excisable CNG delivered into home consumption from an excise licensed establishment where the CNG is measured in units other than kilogram or megajoules.

The Excise (Mass of CNG) Determination 2012 (No. 1) is available on our website

10.3 POLICY AND PRACTICE

10.3.1 WHAT IS CLASSIFIED TO ITEM 10?

Fuel products and some products which may not generally be considered as fuel are classified to item 10 of the Schedule.

For example, paragraph 10(d) of the Schedule refers to 'liquid hydrocarbon products derived through a recycling, manufacturing or other process'.

Hydrocarbons are any of a class of compounds containing only hydrogen and carbon atoms in varying ratios, such as methane(CH₄); ethylene(C₂H₄); acetylene(C₂H₂); and benzene(C₆H₆)

Most hydrocarbon products are derived from petroleum, that is, almost exclusively from crude oil or natural gas production and refining. However, hydrocarbon products can also be derived from non-petroleum sources.

For hydrocarbon products derived from non-petroleum sources to be classified to a specific product subitem of the Schedule, the product must:

have the characteristics of gasoline, kerosene, diesel, liquefied natural gas, CNG, heating oil, mineral turpentine or white spirit,
have the physical characteristics of 'fuel oil' set out in subsection 3(4) of the Excise Tariff Act,
have the physical characteristics of 'LPG' set out in section 4 of the Excise Act; or
be a liquid aromatic hydrocarbon consisting principally of benzene, toluene or xylene or a mixture of them.

Liquid hydrocarbon products may contain minor amounts of other elements and still be classified as a liquid hydrocarbon product.

"Liquid" hydrocarbons are those that are liquid when they come into existence as a discrete product.

Item 10 of the Schedule captures all liquid hydrocarbon fuel products[252], regardless of the feedstock or process of manufacture. Gaseous fuels (CNG, LPG and LNG) are also included at item 10.

Example 10H

Diesel can be produced from used tyres or waste plastic.

Though not derived from petroleum, the diesel is classifiable to subitem 10.10 of the Schedule.

In addition to these hydrocarbon products, item 10 also captures two non-hydrocarbon based products which can be used as transport fuels. Like any other fuel product, for these non-hydrocarbon to be classified to item 10 they must be specified at both an item and sub-item level. Currently, the following are the two non-hydrocarbon products classified to item 10, goods that:

have the physical characteristics of 'biodiesel' set out in section 3 of the Excise Tariff Act;
are denatured ethanol for use as a fuel in an internal combustion engine.

What is not classified to item 10?

Item 10 of the Schedule contains a number of exclusions. These apply to:

certain uses of fuel in oil production and refining, including:
stabilised crude petroleum oil and condensate for use in the recovery, production, pipeline transportation or refining of petroleum, or as refinery feedstock, and
refined or semi-refined liquid petroleum products for use in refining petroleum at a licensed refinery, apart from use as fuel in internal combustion engines
goods classified to item 15 of the Schedule; and
waxes and bitumen.

Other exclusions from item 10 of the Schedule are referred to under relevant subitems.

10.3.2 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 10

The information below provides some context around items and subitems included in item 10 of the Schedule, grouped according to product type. All excise duty rates listed are current as at 1 April 2015.

For the most up to date excise duty rates please refer to the link below.

Rates of duty on fuel (excluding aviation fuels) are subject to change. The Excise Tariff working Pages include the current duty rates and are available our website

Major road transport fuels

Gasoline (other than for use as fuel in aircraft)

The primary use of gasoline is in spark ignition internal combustion engines.

Technology is currently available to produce gasoline from natural gas using the gas to liquids (GTL) method. Gasoline produced in this manner would be classified to item 10(d), subitem 10.5 of the Schedule. Gasoline refined from crude oil and condensate would similarly be would be classified to, subitem 10.5 of the Schedule via item 10(c).

Subitem	Description of goods	Rate of Duty
10.5	Gasoline (other than for use as fuel in aircraft)	$0.389 per litre

Diesel

Diesel is primarily used as the fuel for compression ignition internal combustion engines (diesel engines). Diesel is not specifically defined in the Excise Tariff Act; therefore, we look to the physical characteristics, how the products are used and current industry practice to determine whether a particular product is diesel.

Recent developments in technology have meant that hydrocarbon fuels can be manufactured from sources other than crude oil or waste oil. Technology now exists that allows fuel to be manufactured from feed-stocks such as waste plastic, used tyres and general household waste or from the hydrogenation of animal fats or vegetable oils.

Renewable diesel is defined in section 4A of the Energy Grants (Cleaner Fuels) Scheme Act 2004 as a liquid fuel manufactured by chemically altering vegetable oils or animal fats through a process of hydrogenation, which complies with the diesel fuel standard. However, this definition is not directly relevant from an excise perspective. The Schedule merely includes subitem 10.10 which pertains to diesel in general. Renewable diesel would be classified to the Schedule under this subitem via item 10(d).

If the fuel produced from these alternative feedstock can be used to run a diesel engine and its characteristics are generally in line with diesel then it would be classified to item 10(d), subitem 10.10 of the Schedule.

As with gasoline, diesel can also be produced using GTL technology.

Subitem	Description of goods	Rate of Duty
10.10	Diesel (other than biodiesel)	$0.389 per litre

Aviation fuels

The major aviation fuels are:

aviation gasoline (AVGAS), and
aviation kerosene (also known as aviation turbine fuel, AVTUR or Jet A1).

AVGAS is primarily used in small piston-engine aircraft. It is classified to subitem 10.6 of the Schedule.[253]

AVTUR is primarily used in large turbine-powered aircraft. It is classified to subitem 10.17 of the Schedule.[254]

The excise duty imposed on aviation gasoline and aviation kerosene is used to fund CASA.[255]

Biofuels

Bio-fuels are fuels made from renewable and/or organic feedstock. Denatured ethanol for use in an internal combustion engine (commonly referred to as 'fuel ethanol'), biodiesel and renewable diesel are biofuels currently in commercial use in Australia.

Fuel ethanol

Denatured ethanol for use as fuel in an internal combustion engine is classified to subitem 10.20 of the Schedule. Ethanol is another term for ethyl alcohol.

Manufacturing fuel ethanol

If you produce ethanol for any purpose you must hold an excise manufacturer licence. If you produce ethanol for fuel and non-fuel applications, your licence must specify this.

For further information on licensing, see Chapter 2 -- Licensing: Applications.

Denaturing

Fuel ethanol is usually denatured by the addition of 1% or more of unleaded petrol. However, we will accept other denaturants, provided that they meet the requirements of Excise (Denatured spirits) Determination 2006 (No. 2) which deals specifically with alcoholic beverages. The Explanatory Statement provides information about the background, purpose and operation of this determination.

Subitem	Description of goods	Rate of Duty
10.20	Denatured ethanol for use as fuel in an internal combustion engine	$0.389 per litre

Fuel ethanol blends

Fuel ethanol is usually blended (primarily with petrol) for use as a fuel in spark ignition engines.

In other limited cases denatured ethanol can be used in compression ignition engines. Although rare, blends of diesel and ethanol are sometimes referred to as 'Diesohol'.

In the Schedule there are specific subitems for ethanol blends:

Subitem	Description of goods	Rate of Duty
10.7	Blends of gasoline and ethanol	The amount of duty worked out under section 6G
10.11	Blends of diesel and ethanol	The amount of duty worked out under section 6G.

For further information see discussion on "Calculating duty according to section 6G" of the Excise Tariff Act below.

Blending fuel ethanol with products such as petrol or diesel is excise manufacture, even if all the components of the blend are duty-paid fuels.[256] The only exception to this rule is where fuel ethanol is incidentally blended with other fuel and there is no intention to manufacture a further fuel ethanol blend.

Biodiesel

Biodiesel is defined in subsection 3(1) of the Excise Tariff Act as:

'fuel manufactured by chemically altering vegetable oils or animal fats (including recycled oils from these sources) to form mono-alkyl esters.'

Subitem 10.21 of the Schedule applies only to products that meet this definition. Therefore, fuel produced from animal fats or vegetable oils by hydrogenation (renewable diesel) is not biodiesel for the purposes of the Schedule. Fuel made from other feedstock, such as waste plastics, is also not biodiesel.

Subitem	Description of goods	Rate of Duty
10.21	Biodiesel	$0.389 per litre

Biodiesel manufacture

Biodiesel can be made from the following feedstock:

new or used vegetable oils (e.g. soybean oil, rapeseed/canola oil, cotton seed and mustard seed oils)
oils from oil bearing trees (e.g. palm & coconut oil)
animal fats (e.g. beef tallow), and
waste cooking oils (e.g. used frying oil, grease trap waste).

In general, biodiesel can be manufactured by the following processes:

alkali-catalysed transesterification of the feedstock with alcohol
direct acid-catalysed esterification of the feedstock with alcohol, or
the conversion of the feedstock to fatty acids and then to alkyl esters with acid catalysis.

To make biodiesel, you must be licensed as an excise manufacturer. There is no threshold, or own use exemption from this requirement.

For further information on licensing, see Chapter 2 - Licensing: Applications.

Biodiesel is excisable whether or not it meets the fuel quality standard for biodiesel developed by the Department of Environment who are responsible for the administration of the Fuel Quality Standards Act 2000. Information on the standard may be obtained from that department.

Biodiesel manufacturers may be eligible to claim the cleaner fuels grant. The biodiesel you manufacture must meet the fuel quality standard to be eligible for the cleaner fuels grant.

More information on the Cleaner fuels grants scheme is available on our website at www.ato.gov.au, refer to Fuel schemes essentials.

Biodiesel blends

Biodiesel is often blended with other fuel (primarily diesel) prior to being used by consumers.

Blending biodiesel with products such as diesel is excise manufacture, even if all the components of the blend are duty-paid fuels.[257]

The only exception to this rule is where biodiesel is incidentally blended with other fuel and there is no intention to manufacture a biodiesel blend.

The exception is provided by Excise (Blending exemptions) Determination 2014 (No. 1). The Explanatory Statement explains the purpose and operation of this determination.

Example 10I

A non licensed fuel supplier makes a commercial decision to stop supplying biodiesel and to use the tank to expand their diesel storage capability. When the last sale of biodiesel is made the fuel supplier orders a bulk quantity of diesel from their distributor which is discharged into the tank. The tank contained remnants of the biodiesel as it's impractical to completely empty the biodiesel from the tank. There is no intention to make a diesel/biodiesel blend.

This circumstance is incidental blending as covered by the determination. It is not excise manufacture.

Diesel and biodiesel blends

Blends of diesel and biodiesel are covered by subitem 10.12 of the Schedule.

Subitem

Description of goods

Rate of Duty

10.12

Blends of diesel and

biodiesel

The amount of duty worked out under section 6G

For further information see discussion on section 6G of the Excise Tariff Act below.

Diesel/biodiesel blends are usually named by reference to the percentage of biodiesel in the blend. For example, a blend containing 10% biodiesel is referred to as 'B10'. A blend containing 5% biodiesel is referred to as 'B5'.

Other fuel blends

Fuel blends that do not have their own specific classification are classified to subitem 10.30 of the Schedule. For a blend to be classified to this subitem, it must be able to be used as fuel in an internal combustion engine. This is accepted as meaning the blend can be used in an internal combustion engine without causing material damage to an engine within a short period (for example, a day or within 100 kilometres).

Subitem	Description of goods	Rate of Duty
10.30	Blends of 1 or more of the above goods (with or without other substances) not elsewhere included that can be used as fuel in an internal combustion engine (other than goods covered by section 77J of the Excise Act 1901)	The amount of duty worked out under section 6G

Example 10J

Diesel and base oil can be blended together to produce a mould release agent that is used in brick manufacture.

The blend can be used in internal combustion engines and is therefore classified to subitem 10.30 of the Schedule.

A blend which is not a biofuel blend is not classified to subitem 10.30 of the Schedule if:

it has been used as a solvent and recycled for use again as a solvent by the user[258]. (This is further discussed in Chapter 11 - Blending.)
all the components are duty-paid at the same rate (but not where an entity is eligible to claim a fuel tax credit on any of the components)[259]
the blend is not marketed or sold for use as fuel in an internal combustion engine and it contains products listed in the Schedule in the Fuel Tax (Fuel Blends) Determination 2006 (No. 3) at a concentration equal to or greater than the specified minimum, or
it is covered by Excise (Blending exemptions) Determination 2014 (No. 1).

There are other blend circumstances that are not classified to subitem 10.30 and these involve blends that include fuels that are subject to changes in duty rates. For example the duty rate for LPG increases on 1 July for the period 2011 to 2015 and as a result if you blend LPG pre and post 1 July it would not satisfy the circumstance where all the components are duty-paid at the same rate. These blends are not considered to be the result of excise manufacture.[260]

Calculating duty according to Section 6G of the Excise Tariff Act

The rate of duty applicable to these specified blends is determined in accordance with the method statement in section 6G of the Excise Tariff Act. This method takes account of any duty already paid on the components of the blend.

The method for working out the duty payable on these blends is:

Step 1	Add up the amount of duty that would be payable on each constituent of the blend that is classified to item 10 of the Schedule
Step 2	Work out the volume, in litres, of any other constituent of the blend (excluding any water added to the manufacture of the blended goods).[261]
Step 3	Multiply the result of step 2 by $0.389.
Step 4	Total the results of steps 1 and 3.
Step 5	Subtract from the total any duty paid on a constituent of the blended goods that is classified to item 10 or 15 of the Schedule.

If a constituent of the blended goods was imported, and customs duty was paid or payable on the goods, treat that customs duty as if it were excise duty in working out the duty payable. In the unlikely situation where the rate of excise duty on a constituent of the blended goods would be less than the customs duty paid, use the lesser amount in working out the duty payable.[262]

For more information about fuel blends refer to Chapter 11 - Blending.

Example 10K

Marvin's Fuel manufactures a B20 blend (20% biodiesel / 80% diesel) using 16,000 litres of underbond diesel and 4,000 litres of duty-paid biodiesel.

Marvin's Fuel works out the duty payable on the blend under section 6G as follows:

Step 1	16,000 litres of diesel @ $0.389 per litre 4,000 litres of biodiesel @ $0.389 per litre	$ 6,224.00 $ 1,556.00
	Total of step 1	$ 7,780.00
Step 2	Nil
Step 3	Nil
Step 4	Total of step 1 and 3	$ 7,780.00
Step 5	Less duty paid	-$ 1,556.00
Duty payable on the blend (to nearest $)		$ 6,224.00

Example 10L

Esther's Fuels manufactures an E10 blend from 18,000 litres of duty-paid gasoline and 2000 litres of duty-paid fuel ethanol.

Step 1	18,000 litres of diesel @ $0.389 per litre 2,000 litres of fuel ethanol @ $0.389 per litre	$ 7,002.00 $ 778.00
	Total of step 1	$ 7,780.00
Step 2	Nil
Step 3	Nil
Step 4	Total of step 1 and 3	$ 7,780.00
Step 5	Less duty paid	-$ 7,780.00
Duty payable on the blend (to nearest $)		$ 0

Although there is no duty payable on the blend, Esther's Fuels must enter the E10 blend on the excise return (or returns) for the period (or periods) when the blend is delivered into home consumption as it has used fuel ethanol in the blend.

Burner fuels

Kerosene, heating oil and fuel oil[263] are often described as burner fuels because these products are mainly used in burner applications (e.g. as fuel for heating appliances). They are also capable of being used in other applications, for example, as solvents.

Subitem	Description of goods	Rate of Duty
10.15	Heating oil	$0.389 per litre
10.16	Kerosene (other than for use as fuel in aircraft)	$0.389 per litre
10.18	Fuel oil	$0.389 per litre

Crude oil and condensate used as fuel

Condensate, stabilised crude oil and topped crude oil are included in item 10 of the Schedule when these products are used directly as fuel.

Condensate or stabilised crude oil is excluded from item 10 of the Schedule when used:

in the recovery, production, pipeline transportation or refining of crude oil or condensate, or
as refinery feedstock.

Stabilised crude oil and condensate can attract duty under items 20 and 21 respectively of the Schedule and item 10 of the Schedule.[264]

Condensate is a defined term meaning:

(a) liquid petroleum; or

(b) a substance:

that is derived from gas associated with oil production; and
that is liquid at standard temperature and pressure.[265]

Subitem	Description of goods	Rate of Duty
10.1	Petroleum condensate	$0.389 per litre

Stabilised crude petroleum oil (stabilised crude oil) is produced when crude oil from a well is extracted in, or converted to, a state in which it can be safely stored, transported and further dealt with.

Subitem	Description of goods	Rate of Duty
10.2	Stabilised crude petroleum oil	$0.389 per litre

Topped crude petroleum oil (topped crude oil) is produced when the more valuable light fractions are removed from crude oil.

Subitem	Description of goods	Rate of Duty
10.3	Topped crude petroleum oil	$0.389 per litre

Liquefied petroleum gas (LPG)

LPG is defined to include:[266]

liquid propane; or
liquid mixture of propane and butane
liquid mixture of propane and other hydrocarbons that consists mainly of propane; or
a liquid mixture of propane, butane and other hydrocarbons that consists mainly of propane and butane.

LPG is the generic name for mixtures of light hydrocarbon gas, consisting of mainly propane or propane and butane that have been liquefied through cooling or compression. These gases are produced either directly through the processing of crude oil and natural gas or as a by-product of the petroleum refining process.

LPG is generally supplied as a mixture of propane and butane but it can also be supplied as 100 per cent propane. It may also include a small proportion of other hydrocarbons.

In addition to being used as a transport fuel, LPG containing propane only is used for a variety of purposes including commercial and domestic cooking, drying and heating.

A remission of duty is available where the LPG is supplied for non-transport use.[267]

Although this means that no duty is payable on non-transport LPG you still need an excise licence to manufacture the goods.

LPG is exempt duty when it is used at the premises specified in a manufacture licence in the process of manufacturing:

petroleum condensate or stabilised crude petroleum oil; or
liquefied petroleum gas, liquefied natural gas or other hydrocarbons.[268]

This is provided the manufacture of the goods is done in accordance with the manufacturer licence.

For more information about the remission of excise duty on LPG supplied for non-transport use refer to Chapter 7 - Remissions, Refunds, Drawbacks & Exemptions

Subitem	Description of goods	*Rate of Duty
10.19A	Liquefied petroleum gas, other than liquefied petroleum gas exempted from excise duty by section 77HB of the Excise Act 1901	$0.102 per litre

*LPG duty rates have increased annually from 1 July 2012with the last scheduled increase under the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011, occurring 1 July 2015. This is in addition to any changes resulting from the tariff proposals introduced in October 2014 and any subsequent indexation changes.

Liquefied natural gas (LNG)

LNG is produced from natural gas that is cooled to the point that it condenses to a liquid. The majority of LNG manufactured in Australia is exported although some is used as a transport fuel, generally in heavy-duty long range road transport.

Duty on LNG is imposed at the point of manufacture. Excise is calculated as a rate of cents per kilogram, rather than cents per litre as with other fuels.

A remission of duty is available where the LNG is supplied for non-transport use.[269]

Although this means that no duty is payable on non-transport LNG you still need an excise licence to manufacture the goods.

LNG is exempt of duty when it is used at the premises specified in a manufacture licence in the process of manufacturing:

petroleum condensate or stabilised crude petroleum oil; or
liquefied petroleum gas, liquefied natural gas or other hydrocarbons.[270]

This is provided the manufacture of the goods is done in accordance to the manufacturer licence.

For more information about the remission of excise duty on LNG supplied for non-transport use refer to Chapter 7 - Remissions, Refunds, Drawbacks & Exemptions

Subitem	Description of goods	*Rate of Duty
10.19B	Liquefied natural gas, other than liquefied natural gas exempted from excise duty by section 77HB of the Excise Act 1901	$0.213 per kilogram

* LNG duty rates have increased annually from 1 July 2012with the last scheduled increase under the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011, occurring 1 July 2015. This is in addition to any changes resulting from the tariff proposals introduced in October 2014 and any subsequent indexation changes.

Compressed natural gas (CNG)

CNG is produced from natural gas, which is compressed. CNG is used in some bus fleets, street sweepers and garbage collection vehicles. There is no significant use of CNG in cars in Australia at this stage.

CNG is exempt from duty if it was compressed:

for use other than as a fuel for a motor vehicle; or[271]
other than in the course of carrying on an enterprise; or[272]
for use as a fuel for a forklift vehicle that is used primarily off public roads; or[273]
at a residential premises; and
the rate at which the gas was compressed at those premises is not more than 10 kilograms of compressed natural gas per hour; and
the gas is not sold or otherwise supplied in the course of carrying on an enterprise.[274]

The phrase 'in the course of carrying on an enterprise' has the same meaning a when it is used in the A New Tax System (Goods and Services Tax) Act 1999.

A 'residential premises' has the same meaning as given in the Goods and Services Tax Act.

In most instances, the ultimate use of CNG will be known at the time of compression. For instance, compression will commonly occur directly before delivery into the motor vehicle or into storage tanks for other uses. Hence, it will be readily established whether CNG is eligible for exemption. If the CNG you manufacture is exempt, then you do not need to hold a license under the Excise Act to undertake that activity.

Subitem	Description of goods	*Rate of Duty
10.19C	Compressed natural gas, other than compressed natural gas exempted from excise duty by section 77HB of the Excise Act 1901	$0.213 per kilogram

* CNG duty rates have increased annually from 1 July 2012 with the last scheduled increase under the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011, occurring 1 July 2015. This is in addition to any changes resulting from the tariff proposals introduced in October 2014 and any subsequent indexation changes.

Liquid aromatic hydrocarbons

Some industrial processes, such as coal coking, waste incineration and some plastics production, results in by-products consisting principally of the aromatic hydrocarbons benzene, toluene and xylene, or mixtures of them. These can be used as fuels.

Other substances may be present in these products, but these aromatics must be the principal constituents to be classified to subitem 10.25 of the.

Subitem	Description of goods	Rate of Duty
10.25	Liquid aromatic hydrocarbons consisting principally of benzene, toluene or xylene or mixtures of them	$0.389 per litre

Mineral turpentine & white spirit

Mineral turpentine and white spirit are very similar and are predominantly used as solvents.

Subitem	Description of goods	Rate of Duty
10.26	Mineral turpentine	$0.389 per litre
10.27	White spirit	$0.389 per litre

Petroleum products not elsewhere included

Subitem 10.28 of the Schedule includes all unblended petroleum products not elsewhere included that fall within the general description of item 10 of the Schedule. Products classified to this subitem can be as diverse as lighter fluid, naphtha and recycled waste oil, including waste oil recycled by filtering, dewatering and demineralisation. Waste oil that is only subjected to a filtering and dewatering process is not an excisable good captured by the Schedule as the process is not considered to be excise manufacture.[275]

Recycled waste oil is only classified to this subitem if it cannot be classified elsewhere (e.g. diesel to subitem 10.12 of the Schedule; re-refined base oil not for fuel use to subitem 15.2 of the Schedule).

Subitem	Description of goods	Rate of Duty
10.28	Petroleum products (other than blends) not elsewhere included (other than goods covered by section 77J of the Excise Act 1901)	$0.389 per litre

Products derived from non-petroleum sources cannot be classified to subitem 10.28 of the Schedule.

10.3.3 PRODUCTS CLASSIFIED TO ITEM 15

Lubricating oils and greases, hydraulic fluids and oils used for heat transfer applications in machinery are classified to item 15 of the Schedule, including:

lubricant base oils
prepared lubricant additives containing carrier oils
lubricants for engines, gear sets, pumps and bearings
hydraulic fluids
brake fluids
transmission oils
transformer and heat transfer oils, and
synthetic equivalents of petroleum-based oil and grease products.

Item Description of goods

15 Goods as follows, other than:

(a) goods for use as a fuel; and

(b) exempt oils and hydraulic fluids

Exempt oils and hydraulic fluids are:

food grade white mineral oil
polyglycol brake fluids, and
aromatic process oils

that meets the specified industry standards or criteria specified in the Excise Tariff Act[276].

Goods for use as a fuel may be excisable under item 10 of the Schedule.

Example 10M

An oil recycler produces re-refined base oil which can be manufactured into lubricating oil by the addition of suitable additives but can also be used as fuel.

The base oil is delivered for use as a fuel. It does not meet industry standards for diesel or another specified product under item 10 of the Schedule.

The base oil is not classified to item 15 of the Schedule to the Excise Tariff Act. It is classified to subitem 10.28 of the Schedule. Duty is payable at $0.389 per litre.

Subitem	Description of goods	Rate of Duty
15	Goods as follows, other than: (a)goods for use as a fuel; and (b)exempt oils and hydraulic fluids
15.1	Petroleum-based oils (including lubricant/fluid/oil products) and their synthetic equivalents but not greases	$0.085 per litre
15.2	Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as oils (including lubricant/fluid/oil products) but not greases	$0.085 per litre
15.3	Petroleum-based greases and their synthetic equivalents	$0.085 per kilogram
15.4	Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as greases	$0.085 per kilogram

Synthetic equivalents

A synthetic product is equivalent to a petroleum-based (lubricant/fluid/oil) product where it performs the equivalent function of the petroleum based oil. Factors to consider include indicated use and marketing.

Example 10N

Synthetic lubricating oil is designed to be used as lubricating oil in an engine. It performs the same function as petroleum based lubricating oil. It is therefore the equivalent of petroleum based lubricating oil.

If you are unsure whether the products you produce are subject to excise duty under item 15 of the Schedule you can seek specific advice from us.

For further information, refer to Chapter 8 - Reviews and objections.

10.4 PROCEDURES

10.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on fuel in the excise tariff contact us as follows:

phone 1300 137 290
fax 1300 130 916,
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

10.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO THE EXCISE TARIFF?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products without a manufacturer licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[277]

If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units.[278]

Move, alter or interfere

If you move underbond excisable fuel products without approval, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[280]

Note:

This includes moving underbond excisable fuel products from your premises to any other location or for export.

If your movement of underbond excisable fuel products does not comply with the permission to move the underbond excisable fuel products, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[281]

If you move, alter or interfere with excisable fuel products that are subject to excise control, without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[282]

Deliver

If you deliver excisable fuel products home consumption contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[283]

Records

If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units.[284]

False or misleading statements

If you make a false or misleading statement, or an omission from a statement in respect of duty payable on particular goods, to us, the penalty is a maximum of 50 penalty units and twice the amount of duty payable on those goods.[285]

Evade

Facilities etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units.[287]

If you do not provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into and all excisable fuel products manufactured in your factory and for taking stock of all material and excisable fuel products contained in your factory, the maximum penalty is 10 penalty units.[288]

10.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods listed in the Schedule and that are manufactured or produced in Australia and listed in the Schedule.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG); and
liquefied petroleum gas (LPG).

While oils and grease classified to item 15 are not technically fuel we have included them in this generic term in this guide.

This manual does not cover stabilised crude petroleum oil or condensate classified to items 20 and 21 respectively in the Schedule.

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[290] is the document that you use to advise us:

the volume of excisable fuel products that you have delivered into home consumption during the period designated on your PSP, or
the volume of excisable fuel products that you wish to deliver into home consumption following approval.

Home Consumption[291]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Section 50 direction

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

10.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

10.7.1 Excise Act 1901

Section 4 - Definitions

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 77HA - Compressed natural gas that is exempt from excise duty

Section 77HB - Liquefied petroleum gas and liquefied natural gas that is exempt from excise duty

Section 77J - Goods that are not covered by subitem 10.25, 10.26, 10.27, 10.28 or 10.30

Section 77K - Crude oil and condensate may attract more than one excise duty

Section 6G - Duty payable on blended goods

10.7.2 Excise Tariff Act 1921

Section 3 - Definitions

Schedule item 10(j) - - Goods covered by 77HA or 77HB of the Excise Act 1901

10.7.3 Excise Regulations 2015

Section 24 - Conversion of measurements of LPG and compressed natural gas

Clause 2 of Schedule 1

10.7.4 Crimes Act 1914

11.3.2 WHAT IS EXEMPT BLENDING?

11 BLENDING

11.1 PURPOSE

11.2 INTRODUCTION

11.3 POLICY AND PRACTICE

11.3.1 WHAT IS BLENDING?

11.3.3 WHAT IF I WANT TO BLEND IMPORTED FUEL?

11.3.4 HOW DO I CALCULATE THE DUTY PAYABLE ON MY EXCISABLE BLENDED PRODUCTS?

11.3.5 HOW DO I ACCOUNT FOR FUEL USED IN THE MANUFACTURE OF NON-EXCISABLE GOODS?

11.4 PROCEDURES

11.4.1 WHERE CAN I FIND COPIES OF THE DETERMINATIONS?

11.4.2 WHAT DO I DO IF I NEED MORE INFORMATION?

11.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO BLENDING?

11.6 TERMS USED

11.7 LEGISLATION (quick reference guide)

11.7.1 Excise Act 1901

11.7.2 Excise Tariff Act 1921

11.7.3 Customs Act 1901

11.7.4 Fuel Tax Act 2006

11.7.5 Crimes Act 1914

11.1 PURPOSE

This chapter deals with:

what a blended product is
how it is classified
the rates of excise that apply, and
penalties that can apply to offences in relation to blending.

11.2 INTRODUCTION

Fuel is commonly blended with other fuel or other substances to make products suitable for a particular purpose. The excise treatment of blends is quite complex and may vary. The correct excise treatment may depend on what components and proportions are in the blend and whether duty paid products are used. The provisions relating to blends are aimed at ensuring the correct amount of revenue is collected and that the application of excise duty on blends and the operation of the Fuel Tax Credit Scheme are appropriate

11.3 POLICY AND PRACTICE

11.3.1 WHAT IS BLENDING?

Although the term 'blend' is not defined in the Excise Act or the Excise Tariff Act, section 77G of the Excise Act specifically provides that fuel blending which produces goods covered by paragraph 10(g) in the Schedule to the Excise Tariff Act (Schedule) constitutes the manufacture of those goods. Given that it is taken to be the manufacture of those goods, it follows that the blends are excisable.

Some limited exemptions apply (for further information, see the "Exempt Blending" section below)

In general, blends of any one or more of the following (with or without other substances) are excisable, (unless there is an exclusion that covers the blend):

Gasoline (petrol)

Kerosene

Diesel

Heating oil

Fuel oil [as defined in subsection 3(1)]

Biodiesel

Fuel ethanol

Liquid aromatic hydrocarbon products (e.g. toluene, benzene or xylene)

Mineral turpentine

White spirit

Petroleum condensate

Stabilised crude petroleum oil

Topped crude petroleum oil

Example 11A

Examples of blended fuel:

An importer mixes imported diesel with locally produced diesel. This is regarded as blending covered by section 77G of the Excise Act, and is therefore manufacture for excise purposes.
A licensed manufacturer mixes duty-paid benzene with underbond benzene. This is regarded as blending for excise purposes.

Example 11B

A manufacturer produces white spirit by means of blending various petroleum products.

The product, though a blend of other products that fall within item 10 in the Schedule, is classified as white spirit, subitem 10.26 in the Schedule.

11.3.2 WHAT IS EXEMPT BLENDING?

Exempt blending occurs where the blending process results in a product that is classifiable to paragraph 10(g) of the Schedule but the Excise Act or related determinations specify that this is not an act of excise manufacture.

In some cases the exemptions relate to the blend and the constituents of the blend while in other cases the exemptions arise due to the circumstances in which the blending occurs.

The following flowchart sets out the process for deciding whether production of a particular blend is excise manufacture.

The logic behind this process is:-

Does the blend fall under section 77G of the Excise Act?

The answer will be yes if

The blend components are classifiable to Items 10, 15, 20 or 21 of the Schedule; and
The blend is covered by paragraph 10(g) of the Excise Tariff.

Are the circumstances covered by a determination made under sections 77H(3) and (4)?

The answer will be "yes" if the product meets any of the tests described in (a) to (g) below.

Is the blend a blend of the same 'relevant fuel' that is not subject to remission, and, excise or customs duty has been paid on the fuel which is blended?

If the answer is "yes" then the blended product is not covered by paragraph 10(g) of the Excise Act.

Is the blend a blend of LPG or a blend of LNG and for each amount of the blend either:
- a remission of excise or customs duty applied; or
- each amount of the blend was manufactured, produced or imported before 1 December 2011?

If the answer is "yes" to either situation, then the blended product is not covered by paragraph 10(g) of the Excise Act.

Is the blend a blend of components that have been duty paid at the same rate or is the blend covered by a determination under section 95-5 of the Fuel Tax Act that the blend does not constitute a fuel?

The answer will be "yes" if only duty paid products with the same duty rate have been used or the blend is covered by a determination under section 95-5.

Is a constituent of the blend denatured ethanol or biodiesel; or a constituent is a taxable fuel that an entity has been entitled to a fuel tax credit?

The answer will be "yes" if either biofuels have been used in the blend or the blender is entitled to a fuel tax credit (this generally applies to packaged product meeting certain criteria or the supply of heating oil for domestic purposes)

The following is a summary of the legislative provisions that result in these blends not being excisable and the source of the exemption.

Subsection 77H(3) and (4) of the Excise Act

Excise (Blending exemptions) Determination 2014 (No. 1) is a legislative instrument created under these sections of the Excise Act. Blends covered by this Determination are generally of an incidental or trivial nature:

(a) Oil and gasoline are blended for use as two stroke gasoline where duty has been paid both constituents;

(b) An incidental blend occurs where the constituents are placed in a tank containing remnants of those fuels listed above or another substance;

(d) Fuel on which duty has been paid is blended with a dye;

(e) Fuel on which duty has been paid is blended with prepared additives that enhance the performance of an internal combustion engine or assist in its maintenance (the prepared additives cannot be methanol or other fuel) and the blend is packaged into containers of not more than 10 litres capacity;

(f) Fuel on which duty has been paid is blended with one or more of the following additives, being additives that are packaged into containers of at least 10 litres capacity, the prepared additives cannot be methanol or other fuel and the total amount of all prepared additives in the resultant blend does not exceed 0.5 % v/v.

goods that are the product of the blending of amounts of liquefied petroleum gas (LPG) without other substances if the following apply:
- any applicable excise duty or an excise equivalent duty of Customs that is payable on each quantity of the LPG has been paid;

and

(ii) the blending occurs:

in a container that is capable of containing not more than 210 kilograms of LPG; or

(b) in a tank at residential premises and the resultant blend is not for use in carrying on an enterprise; or

(c) in a tank that is for use in a system for supplying LPG to at least 2 residential premises (whether or not the system also supplies fuel to premises other than residential premises)

and

(iii) the tank in which the blending occurs is not for use in a system for supplying fuel to an internal combustion engine of either a motor vehicle or a vessel, either directly or by filling another tank connected to such an engine.

Subsection 77H(1) of the Excise Act

This section provides that where the constituents of the blend have all had duty (customs or excise) paid at the same rate, excise manufacture has not occurred. The same exemption also applies where goods are covered by a determination in force under section 95-5 of the Fuel Tax Act.

Example 11C

A fuel retailer mixes duty-paid diesel with duty-paid kerosene to make winter mix, for use in diesel engines in cold climatic conditions. No one has been entitled to claim a fuel tax credit on the diesel or on the heating oil.

The blend is not excisable, as both components have been duty-paid at the same rate.

Fuel Tax (Fuel Blends) Determination 2006 (No. 3) has been created under section 95-5. This determination is largely directed at the solvents industry where various formulations could be used in internal combustion engines but are not marketed as such.

Blends covered by this determination are blends that are not marketed or sold as fuel for an internal combustion engine. The blend must consist of a taxable fuel classified to subitem 10.25, 10.26, 10.27 or 10.28 of the Schedule; and either

The blend contains one of the substance in the minimum concentration listed below; or

The blend contains more than one of the substances listed below so that the total concentration of these substances is at least 10% by volume.

Product	Minimum concentration for % v/v
Tertiary butyl alcohol	0.5
Other alcohols (other than methanol, ethanol and isopropyl alcohol)	10.0
Ketones	10.0
Methyl tertiary butyl ether	1.0
Di-isopropyl ether	1.0
Other ethers	10.0
Esters	10.0
Surfactants	1.0
Silicone Oils	2.0
Oleic Acid	2.0
Water	5.0

Example 11D

An entity makes a range of solvent formulations which it does not market as being for use as fuel in an internal combustion engine.

Blend 1 90% toluene with 10% methyl ethyl ketone

This does not constitute a fuel for FTC purposes since the minimum concentration for ketones is 10%

Blend 2 90% toluene with 8% methyl ethyl ketone and 2% butanol

This does not constitute a fuel for FTC purposes since the total of ketones and other alcohols is greater than10%

Blend 3 90% toluene with 4% methyl ethyl ketone, 4% butanol and 2% benzene. This constitutes a fuel for FTC purposes since the total of ketones and other alcohols is less than 10%

Subsection 77H(2) of the Excise Act

This subsection provides an exception to the exemptions provided for in subsection 77H(1) where any of the constituents of the blend are biodiesel or fuel ethanol or a taxable fuel for which an entity has been entitled to claim a fuel tax credit (for example kerosene that has been packaged in 20 litre containers).

If you are unsure whether the products you produce are subject to excise duty under item 10 of the Schedule you can seek specific advice from us.

Section 77H(2A) of the Excise Act

This subsection applies to the blending of the following fuels.[293]

gasoline for use in aircraft
kerosene for use in aircraft
LPG
LNG
CNG that is classified to subitem 10.19C of the Schedule

The blending of these fuels is not excise manufacture if the blended fuels:

are not subject to a remission of excise or customs duty, either in full or in part; and
any excise or customs duty payable on the fuels has been paid.

Example 11E

A quantity of LPG was duty paid on 3 March 2015 at a rate of $0.102 per litre (with no remission available because it was intended for use in transport), and it is added to a tank containing a quantity of LPG that was duty paid prior to 1 February July 2015 at a rate of $0.101 (also with no remission available because it was intended for a transport use).

The blending does not constitute manufacture.

For more information on the remissions refer to Chapter 7 - Remissions, refunds, drawback and exemptions

Section 77H(2B) of the Excise Act

This subsection applies to the blending of LPG or LNG where the fuel has been eligible for an excise or customs remission, regardless of the level of remission.

The blending of LPG or LNG is not excise manufacture if:

the fuel is subject to a remission, either in full or in part, of excise or customs duty because it is not used, or intended for use, in an internal combustion engine in either a motor vehicle or a vessel; or
the fuel is not subject to excise or customs duty because it was manufactured, produced or imported before 1 December 2011.

Example 11F

Evan's BBQ Bonanza Gas receives a delivery of 10,000 litres of LPG on 15 July 2012 that his supplier has applied the partial remission to as he knows that Evan's BBQ Bonanza only supplies LPG in 9 kilogram barbeque bottles. The LPG is delivered into Evan's bulk tank that already contains 4,000 litres of LPG delivered on 20 June 2012 that was the subject of the full remission. The blending of these two quantities of LPG, although subject to different duty rates does not constitute excise manufacture and therefore the blend is not subject to duty.

The exemption only applies where each quantity of LPG or LNG that is blended are subject to a remission, either in full or in part. This exemption was in effect during the period that the carbon charge was applied to non-transport LPG and LNG via a partial remission under the excise regime (1 July 2012 to 30 June 2013).

For more information on the remissions refer to Chapter 7 - Remissions, refunds, drawback and exemptions

11.3.3 WHAT IF I WANT TO BLEND IMPORTED FUEL?

The Commissioner acknowledges that long standing practice in the fuel industry in relation to imported fuels has been to mix imported fuel with local fuel and then deal with the resulting fuel through the excise system. We accept that mixing of imported fuel with local fuel, in premises covered by an excise manufacturer licence and a Customs warehouse licence, is blending covered by section 77G of the Excise Act and is therefore manufacture.

This position is supported by section 24 of the Excise Act. Section 24 provides that:

'Excisable goods and goods liable to duties of customs may be used in manufacturing excisable goods. Goods liable to duties of Customs may, while subject to control of the Customs, be used in the manufacture of excisable goods in accordance with this Act. The regulations may prescribe conditions on the use of goods liable to duties of Customs, while subject to the control of the Customs, in the manufacture of excisable goods.'

The Customs Act 1901 provides for the extinguishment of customs duty on fuel where certain imported goods (including fuel) are used in the manufacture of excisable goods[294]. The manufacture must occur at premises covered by both an excise manufacturer licence and a Customs warehouse licence.

11.3.4 HOW DO I CALCULATE THE DUTY PAYABLE ON MY EXCISABLE BLENDED PRODUCTS?

In the Schedule, there are three specific biofuel blends with separate subitems and a general subitem for other blends.

If you are blending fuels of the same type (eg petrol with petrol) or where a blend has the characteristics accepted in the industry for a particular product mentioned in the Schedule (eg see example 11B above) it is classified to the specific subitem and not as a blend.

Subitem		Description of goods	Rate of Duty
10.7		Blends of gasoline and ethanol	The amount of duty worked out under section 6G
10.11		Blends of diesel and ethanol	The amount of duty worked out under section 6G
10.12		Blends of diesel and biodiesel	The amount of duty worked out under section 6G
10.30	Blends of 1 or more of the above goods (with or without other substances) not elsewhere included that can be used as fuel in an internal combustion engine (other than goods covered by section 77J of the Excise Act 1901)		The amount of duty worked out under section 6G

Section 6G of the Excise Act sets out the method statement for working out the duty payable on blends as follows:

Step 1	Add up the amount of duty that would be payable on each constituent of the blend that is classified to item 10 of the Schedule
Step 2	Work out the volume, in litres, of any other constituent of the blend (excluding any water) that was added to the blended goods.[295]

Step 3	Multiply the result of step 2 by the 'CPI Indexed rate' as defined in Excise Tariff Proposal (No. 1) 2014 that applies on the day the goods are delivered into home consumption or when payment of duty is made, whichever is the earlier.
Step 4	Total the results of steps 1 and 3.
Step 5	Subtract from the total any duty paid on a constituent of the blended goods that is classified to item 10 or 15 of the Schedule.

If a constituent of the blended goods was imported, and customs duty was paid or payable on the goods, treat that customs duty as if it were excise duty in working out the duty payable.

If the rate of excise duty on a constituent of the blended goods would be less than the customs duty paid, use the lesser amount in working out the duty payable.

Example 11G

A manufacturer makes a solvent blend to a customer's specification from 10,000 litres of underbond toluene (classified to subitem 10.25 of the Schedule) and 5,000 litres of a duty-paid product classified to 10.28 of the Schedule. The blend is capable of being used as fuel in an internal combustion engine.

The resulting blend is classified to subitem 10.30 of the Schedule and is delivered into home consumption on 1 March 2015. Duty is payable on the blend as follows:

Step 1	10,000 litres of toluene @ $0.389 per litre	$3,890.00
Step 2	5,000 litres of petroleum product
Step 3	5,000 litres x $0.389	$1,945.00
Step 4	Total of steps 1 and 3	$5,835.00
Step 5	Less duty paid	-$1,945.00
	Duty payable on the blend (to nearest $)	$3,890.00

11.3.5 HOW DO I ACCOUNT FOR FUEL USED IN THE MANUFACTURE OF NON-EXCISABLE GOODS?

Before underbond excisable fuel products can be blended as part of the manufacture of non-excisable goods (eg when they are used in the manufacture of paint), they must be 'delivered' into home consumption. If you have a PSP, the underbond product is deemed to be delivered into home consumption at the point the blend is made and would be included in the next excise return. If you do not have a PSP you need to enter the product on an excise return, pay the duty and receive an Authority to deliver excisable goods before you make the blend.

Example 11H

Lionel's Solvents is licensed to manufacture toluene and has a PSP. On 25 February 2015 Lionel's Solvents uses some underbond toluene to make a blend that cannot be used as fuel in an internal combustion engine.

Lionel's Solvents must include the toluene used in the blend on its next excise return as subitem 10.25 of the Schedule and pay duty at the rate of $0.389 per litre.

The toluene is delivered into home consumption at the time the blend is made.

Example 11I

Barry's Blenders wants to make a blend of 90% toluene and 10% methyl ethyl ketone (MEK). They have 9,000 litres of underbond toluene.

The blend is covered by Fuel Tax (Fuel blends) Determination 2006 (No. 3), and is not excisable.

The act of blending the toluene into the final product that can't be used in an internal combustion engine is the point where the toluene is considered to be delivered into home consumption. Barry's Blenders don't hold a PSP and therefore must include the 9,000 litres of toluene in an excise return, prior to undertaking the blending process. The toluene is entered on the return under subitem 10.25 of the Schedule and duty is payable at the rate inforce on the day the payment is made.

The blend itself is not included in an excise return.

You may make blends that are not excisable using duty-paid components even if you do not hold an excise manufacturer licence.

As these blends are not excisable, they are not subject to excise control. Excise duty has been paid on any excisable component before the blend is made.

11.4 PROCEDURES

11.4.1 WHERE CAN I FIND COPIES OF THE DETERMINATIONS?

You can access copies of the determinations on our website at www.ato.gov.au

11.4.2 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on blending contact us as follows:

phone 1300 137 290
fax 1300 130 916,
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

11.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO BLENDING?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units.[297]

Move, alter or interfere

Note:

This includes moving underbond excisable fuel products from your premises to any other location or for export.

If you move, alter or interfere with excisable fuel products that are subject to excise control, without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[301]

Deliver

If you deliver excisable fuel products into home consumption contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[302]

Sell

If you sell excisable fuel products on which duty has not been paid (unless it is an underbond sale or a sale for export), the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products.[303]

Records

If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units.[304]

False or misleading statements

If you make a false or misleading statement or an omission from a statement in respect of duty payable on particular goods, to us, the penalty is a maximum of 50 penalty units and twice the amount of duty payable on those goods.[305]

Evade

Facilities etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units.[307]

If you do not provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into and all excisable fuel products manufactured in your factory, and for taking stock of all material and excisable fuel products contained in your factory, the maximum penalty is 10 penalty units.[308]

11.6 TERMS USED

Excisable goods

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewal diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol, and
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG)
liquefied petroleum gas ((LPG).

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[310] is the document that you use to advise us:

the volume of excisable fuel products that you have delivered into home consumption during the period designated on your PSP, or
the volume of excisable fuel products that you wish to deliver into home consumption following approval.

Home Consumption[311]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210

Section 50 direction

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

11.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

11.7.1 Excise Act 1901

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 77G - Fuel blending is to be treated as manufacture

Section 77HB - Liquefied petroleum gas and liquefied natural gas that is exempt from excise duty

Section 77J - Goods that are not covered by subitem 10.25, 10.26, 10.27, 10.28 or 10.30

Section 6G - Duty payable on blended goods

11.7.2 Excise Tariff Act 1921

Part VAA - Special provisions relating to excise-equivalent goods

11.7.3 Customs Act 1901

11.7.4 Fuel Tax Act 2006

Section 95-5 - Determination of blends that no longer constitute fuels

11.7.5 Crimes Act 1914

12.2.1 WHAT IS A SOLVENT?

12 SOLVENTS

12.1 PURPOSE

12.2 INTRODUCTION

12.3 POLICY AND PRACTICE

12.3.1 WHAT ARE MY OPTIONS?

12.3.2 BLENDING SOLVENTS

12.3.3 WHAT IS THE SOLVENT RECYCLING EXEMPTION?

12.3.4 REMISSION OF DUTY FOR CHEMICAL TRANSFORMATION

12.4 PROCEDURES

12.4.1 WHAT DO I DO IF I AM MANUFACTURING A PRODUCT THAT I WANT ADDED TO THE FUEL BLENDS DETERMINATION?

If you want to enquire about amending the fuel blends determination you will need to contact us.

WHAT DO I DO IF I NEED MORE INFORMATION?

12.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO SOLVENTS?

12.6 TERMS USED

12.7 LEGISLATION (quick reference guide)

12.7.1 Excise Act 1901

12.7.2 Crimes Act 1914

12.1 PURPOSE

This chapter deals with:

what a solvent is
obligations that arise with the blending of solvents
obligations associated with dealing with underbond and duty-paid product
packaging concessions for solvent suppliers
the recycling concession for solvent users
remissions of duty where solvents are chemically transformed
entitlement to fuel tax credits for excise paid on solvents, and
penalties that can apply to offences in relation to solvents.

12.2 INTRODUCTION

12.2.1 WHAT IS A SOLVENT?

Most fuels used in a non-fuel application are used as solvents. When referring to solvents we are referring to fuels used to dissolve or form solutions with other substances. Solvents are used in a wide range of industrial processes, for example cleaning. They can also be blended into other products such as paints and adhesives.

Most solvents are classified to subitems 10.16, 10.25, 10.26, 10.27, 10.28 or 10.30 of the Schedule to the Excise Tariff Act 1921 (Excise Tariff Act).

How much excise do I have to pay on solvents?

For more information about excise rates refer to Chapter 10 - Fuel in the excise tariff.

Am I entitled to a fuel tax credit for excise paid on solvents?

If you acquire, manufacture, or import into Australia, solvents that are subject to fuel tax[314] for use in your business, you may be entitled to a fuel tax credit.

If you package certain solvents into small packages you may be entitled to a fuel tax credit.

For more information on packaging rules and fuel tax credits visit our website at www.ato.gov.au and refer to Fuel schemes essentials.

12.3 POLICY AND PRACTICE

12.3.1 WHAT ARE MY OPTIONS?

The options available to you depend upon what you intend to do with the solvents. If you intend to manufacture other excisable goods then you need to be licensed as a manufacturer. If you are licensed you will be able to receive fuel underbond (without the duty having been paid).

If you intend to use the solvents other than to manufacture excisable goods you will need to use duty paid solvents. There is one exception to this. If you intend to use solvents to manufacture non excisable goods and the solvents are chemically transformed (other than by combustion) during the manufacturing process then you may be able to have a storage licence and receive the solvent underbond.[315]

Underbond solvents

To receive underbond solvents:

you will need to hold an excise licence, and
you or your supplier will need to hold a movement permission (Continuing or Single) that allows the product to move underbond between the licensed premises.

If you do receive underbond solvents then:

you do not have to pay excise duty until it is delivered into home consumption (this includes consumption by an excise licence holder on licensed premises), and
if you hold a periodic settlement permission (PSP), you must enter the amount used or delivered in your settlement period on your weekly excise return and pay the relevant duty, or
If you do not hold a PSP then you will need to lodge an excise return prior to using or delivering the solvent, pay the relevant duty and wait until you receive a Delivery Authority from us.

For more information about periodic settlement permissions and payment of duty see Chapter 6 - Payment of duty.

Duty-paid solvents

Duty-paid solvents are outside the excise system and therefore no reporting requirements apply and you do not need an excise licence to receive them. However, if you are unlicensed you cannot use a duty-paid solvent to create another excisable fuel product, as this is excise manufacture and requires a licence.

For more information about whether a particular process involves excise manufacture you should seek advice from us. See section 13.4.1 - What do I do if I need more information?

12.3.2 BLENDING SOLVENTS

A blended solvent is produced by blending an excisable fuel with:

another excisable fuel, or
another substance.

Excisable blends

You must hold an excise manufacturer licence to make an excisable blend. An excisable blend is a blend that can be a used as a fuel in an internal combustion engine even if it is to be used as a solvent.

You must pay excise on an excisable blend when it is delivered into home consumption.

The amount of excise is calculated under section 6G of the Excise Tariff Act, and takes into account any excise already paid on any of the constituents of the blend.

For more information about Section 6G refer to 11.2.1 in Chapter 11 - Blending.

Excisable blends are classified to subitem 10.30 of the Schedule to the Excise Tariff Act (Schedule) unless it is a distinct product as described in the Schedule, such as:

Blends of gasoline and ethanol (subitem 10.7 )
A liquid aromatic hydrocarbon mixture of benzene, toluene or xylene (subitem 10.25)
Mineral turpentine (subitem 10.26Act), or
White spirit (subitem 10.27).

Non-excisable blends

You do not need an excise manufacturer licence to make a non-excisable blend.

There are four circumstances when a blend is not excisable:

all the components of the blend are duty-paid at the same rate (this does not include blends containing ethanol, biodiesel or fuel on which a person is entitled to a fuel tax credit)
any excisable component is duty-paid and the blend falls within a determination made under section 95-5 of the Fuel Tax Act 2006[316]
any excisable component is duty-paid and the blend is a product that would otherwise be classified to subitem 10.30 of the Schedule but cannot be used as fuel in an internal combustion engine, or
the user of the solvent recycles the solvent for further use by them as a solvent (see Section 12.3.3 - What is the solvent recycling exemption?).

You do not have to pay further excise if excise has already been paid on all components of the blend. If you use underbond product in the blend, excise is payable at the time the product is blended and must be included in your next excise return, if you have a PSP. If you don't, it must be delivered into home consumption, and duty paid, before being used in the blend.

For more information about excise rates refer to Chapter 11 - Blending

12.3.3 WHAT IS THE SOLVENT RECYCLING EXEMPTION?

For a user of a duty-paid solvent who recycles the solvent for reuse to be exempt from excise, the solvent must be used in the manufacture of other goods, recycled by the person who used the solvent, the resulting recycled solvent must be classifiable to the same subitem as the original solvent and the resulting recycled solvent must be for use by the same person.[317]

This applies to the following fuels:

liquid aromatic hydrocarbons (consisting principally of benzene, toluene or xylene or mixtures of them) - subitem 10.25
mineral turpentine - subitem 10.26
white spirit - subitem 10.27
petroleum products (other than blends) not elsewhere included - subitem 10.28, or
blends not elsewhere included - subitem 10.30.

Example 12A

A car components manufacturer makes body panels under contract for a major car maker. They purchase duty-paid solvent, classifiable to subitem 10.30 of the Schedule, which is sprayed onto steel sheets to degrease them prior to pressing into panels. Excess solvent runs off, is collected in a sump and recirculated.

Over time the solvent becomes too contaminated for further use. The manufacturer puts the contaminated solvent through a recycling process and returns the recycled solvent to the sump for further use.

Under this exemption subitem 10.30 of the Schedule does not apply to this recycled solvent and it is not excisable.

12.3.4 REMISSION OF DUTY FOR CHEMICAL TRANSFORMATION

If your fuel product is transformed through a chemical reaction (other than combustion) to produce a product that is not excisable the duty is automatically remitted on the fuel.[318] This is the case in some large-scale petrochemical manufacturing processes. The remission allows licensed manufacturers who chemically transform fuel to do this without incurring excise duty and having to claim fuel tax credits.

The remission does not apply if the fuel:

is merely mixed with other substances to make products such as solvents, cleaning agents or paint (that is there is no chemical transformation),
is used in a manner other than chemical transformation, or
is used as a fuel (i.e. combustion).

Example 12A

Benzene is sold to a polystyrene manufacturer who holds an excise storage licence. The polystyrene manufacturer may obtain underbond benzene from a manufacturer or supplier.

The benzene is chemically transformed into styrene during the process. Styrene is not an excisable product. Liability for duty is remitted when the benzene is chemically transformed into styrene.

The manufacturer does not have to pay duty on the benzene. However, the manufacturer must keep records of the volume of benzene used when directed, and produce these on request.[319]

12.4 PROCEDURES

12.4.1 WHAT DO I DO IF I AM MANUFACTURING A PRODUCT THAT I WANT ADDED TO THE FUEL BLENDS DETERMINATION?

If you want to enquire about amending the fuel blends determination you will need to contact us.

WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on solvents contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

12.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO SOLVENTS?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units.[321]

Move, alter or interfere

Note:

This includes moving underbond excisable fuel products from your premises to any other location or for export.

Deliver

Records

If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units.[327]

False or misleading statements

Evade

Facilities etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units.[330]

12.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewable diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG); and
liquefied petroleum gas (LPG).

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[333] is the document that you use to advise us:

the volume of excisable fuel products that you have delivered into home consumption market during the period designated on your PSP, or
the volume of excisable fuel products that you wish to deliver into the home consumption following approval.

Home Consumption[334]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Remission

A remission of excise duty extinguishes the liability for duty that was created at the point of manufacture.

Section 50 direction

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

12.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

12.7.1 Excise Act 1901

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 77J - Goods that are not covered by subitem 10.25, 10.26, 10.27, 10.28 or 10.30

Section 78 - Remissions, rebates and refunds

12.7.2 Crimes Act 1914

13.2.1 WHAT IS OIL RECYCLING?

13 OIL RECYCLING

13.1 PURPOSE

13.2 INTRODUCTION

13.3 POLICY AND PRACTICE

HOW DO I KNOW WHEN MY RECYCLING PROCESS ALSO CONSTITUTES EXCISE MANUFACTURE?

DO I HAVE TO PAY EXCISE ON RECYCLED OIL?

13.3.2 WHAT RECYCLED FUELS ARE NON-EXCISABLE?

13.3.3 HOW DO I WORK OUT THE AMOUNT OF EXCISE DUTY I NEED TO PAY?

13.3.4 WHEN CAN I GET AN EXCISE DUTY REMISSION OR REFUND?

13.3.5 CAN I CLAIM A CREDIT OR BENEFIT FOR THE EXCISE DUTY I HAVE PAID?

13.4 PROCEDURES

13.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

13.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO OIL RECYCLING?

13.6 TERMS USED

13.7 LEGISLATION (quick reference guide)

13.7.1 Excise Act 1901

13.7.2 Excise Regulations 2015

13.7.3 Excise Tariff Act 1921

13.7.4 Product Grants and Benefits Administration Act 2000

13.7.5 Product Stewardship (Oil) Act 2000

13.7.6 Product Stewardship (Oil) Regulations 2000

13.7.7 Crimes Act 1914

13.1 PURPOSE

This chapter deals with:

what constitutes oil recycling
how the excise system applies to oil recycling
circumstances where duty is not payable on recycled oil, and
blending of recycled oil products.

13.2 INTRODUCTION

13.2.1 WHAT IS OIL RECYCLING?

Oil recycling involves the use of processes to convert used or waste oils into saleable products that can be reused. This conversion constitutes excise manufacture where the recycling process results in something new or different having a distinctive character or use. Recycling to this extent constitutes manufacture and requires an excise manufacturer licence.[336] Merely preparing waste oil for re-use (eg settling or straining for large scale impurities) is not considered to be manufacture and does not make the end product excisable.

Some of these products are excisable fuel products.[337]

For more information about obtaining an excise manufacturer licence see Chapter 2 - Licensing: Applications.

13.3 POLICY AND PRACTICE

13.3.1 HOW DO I KNOW WHEN MY RECYCLING PROCESS ALSO CONSTITUTES EXCISE MANUFACTURE?

Recycling includes filtering, de-watering, demineralisation, separation of contaminants by settlement, centrifuge and refining to treat waste or contaminated oils or fuels. However, it is noted that these processes can be performed with varying levels of effectiveness depending on the type of equipment or process used.

It is a question of fact and degree in relation to which an exercise in judgement is involved whether a recycling process (for example, filtering, de-watering and de-mineralisation, or refining) results in something that is new or different having a distinctive character or use.

Example 13A[338]: recycling that is not manufacturing or producing an excisable good

Di Waste Oils Pty Ltd (Di) is a waste management company that collects various used oils, coolants (glycol and water) and other hazardous liquids.

These waste liquids are collected from several sites in a single journey. During collection, the waste liquids are pumped into a tanker through a metal screen. By detecting audible changes in pump speed caused by variations in the viscosity of liquid passing through it, the tanker operator switches from one segregated part of the tanker to another to separate the fluids according to the relative viscosity. This is done in order to optimise the separation of less viscous fluids including water, which will be directly disposed of by Di as hazardous waste, from other higher viscosity hydrocarbon liquids.

At Di's depot, the tanker's compartments containing the less viscous liquids are disposed of as hazardous waste. The higher viscosity liquids (comprising primarily used oils and hydraulic fluids) are pumped through a filter bag into a large fixed waste oil storage tank. The filter bag removes small particles of wear metal and other solid or semi-solid contaminants.

The oil in the waste oil tank is then pumped through a heat exchange where it is heated to a suitable temperature (to reduce the viscosity of the oil which assists with separation) and passed through a centrifuge to remove any remaining solids and water suspended within the oil. The oil is then tested to ensure, among other things, that the oil is compliant with local council and State environmental legislation and that it meets customer specifications. The oil is then sold as 'low grade burner fuel'.

The low grade burner fuel is not a new and different product with a distinctive character or use. The burner fuel 'merely contains less water and other extrinsic impurities than the used oil'. The burner fuel does not inherently have a different utility to that out of which it was made and is 'merely better able to be used for the same purpose'.

Di has not manufactured or produced a product for excise purposes.

This example can be contrasted with example 13B below in which used oil is subjected to an additional step of 'demineralisation'. This additional step results in the removal of impurities that are more intrinsic in nature (than the water and other extrinsic impurities removed by filtering and de-watering alone).

Given that the above processes are not recycling, they would not be considered to constitute excise manufacture and no excise licence would be required.

Example 13B[339]: recycling that is manufacturing or producing an excisable good

Eric is an oil recycler. Eric collects used oil of varying type and quality from multiple sources. Upon arrival at his depot, Eric drains any free water from the road tanker and then pumps the used oil through a screen into a reaction tank.

In order to reduce the ash content of the oil when combusted, Eric needs to remove intrinsically dissolved mineral contaminants produced from the breakdown of mineral enhancers and lubricants, both added to the oil by manufacturers and accumulated from fuel engine deposits.

To do so Eric adds a quantity of sulphuric acid followed by an inter-facial surface active agent (surfactant) to the reaction tank and the mixture is stirred and heated to 60°C for two hours. The mixture is then allowed to stand so that it can separate into two layers or 'phases' - that is, an oil phase and water-based or 'aqueous' phase. The surfactant facilitates both the reaction of the sulfuric acid with mineral contaminants dissolved within the oil and the separation of the two phases. Excess acid, water and the reacted contaminants in the oil accumulate in the aqueous phase, which settles to the bottom of the reaction tank and is drained off as slurry.

The oil then undergoes centrifugal separation to remove any remaining fine particles suspended in the oil. Eric samples and tests the oil to ensure the oil meets his customer's specifications for high grade industrial burner oil.

A chemical transformation is required for the removal of mineral contaminants intrinsically dissolved in the used oil. This will also result in the modification of some of the used oil's physicochemical properties. This procedure involves more than the 'mere removal of water and other extrinsic materials' that may be achieved by filtering and de-watering alone.

The process undertaken by Eric results in a 'recycled oil' that is new or different with a distinctive character from the used oil as collected. The high grade industrial burner oil is manufactured or produced for excise purposes

DO I HAVE TO PAY EXCISE ON RECYCLED OIL?

Yes, you must pay excise duty on liquid hydrocarbon products produced through a recycling, manufacturing or other process.[340] This includes products derived from petroleum and non-petroleum sources.

You must also pay excise duty on petroleum based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents that are recycled for use as oils or greases. [341]

Excise treatment of blended recycled products depends on whether the blend is an excisable blend or a blend that is not excisable.

For more information about blending and excisable blends refer to Chapter 11 - Blending.

You need to pay excise on products derived from a petroleum source (for example, used lubricating oil) even if they do not fit into a specific product subitem of the Schedule. This is because subitem 10.28 of the Schedule covers any product which is not included elsewhere.

Example 13C

Mark's Oil Recycling filters, de-waters and demineralises waste oil (consisting mainly of used engine lubricant oil) to produce a high grade industrial burner fuel. The product does not meet industry product standards for heating oil and is not 'fuel oil' as defined in the Excise Tariff Act.

The product is excisable and classified to subitem 10.28 of the Schedule.

Example 13D

Max's manufacturing company uses waste plastic to produce a fuel that meets the diesel standard. The fuel (diesel) is classifiable to subitem 10.10 of the Schedule.

13.3.2 WHAT RECYCLED FUELS ARE NON-EXCISABLE?

Recycled solvents

A recycled solvent product does not attract excise if:[342]

the product was originally delivered into home consumption under subitems 10.25, 10.26, 10.27, 10.28 or 10.30 of the Schedule
you used the product as a solvent
you recycle it for your own re-use as a solvent, and
when recycled, the product is classified to its original subitem of the Schedule.

Example 13E - solvent recycling that is non-excisable

Peter's Spray Shed uses solvents to clean spray painting equipment on a weekly basis. After two month's use the solvent becomes unusable. The solvents are recycled by Peter's Spray Shed by putting them through a basic filtering process to remove impurities. The recycled solvent is then used for cleaning spray equipment. The recycled solvent does not attract excise duty and Peter's Spray Shed does not require an Excise manufacturer's licence for this recycling.

The exemption does not apply where someone other than the end user recycles the solvent.

Recycled oil that will be used to make a non-excisable blend?

Some blended recycled products are non-excisable. Blended products that are not suitable for use in an internal combustion engine are not excisable. However excise duty must be paid on any excisable constituents of the blend.

Example 13F - blend that is non-excisable

Mark's Recycling produces high grade burner fuel by recycling waste oil. The burner fuel is classifiable to subitem 10.28 of the Schedule.

Mark's Recycling wants to blend the burner fuel with duty-paid diesel to make coal spray oil. Because of the composition of the coal spray oil it cannot be used as a fuel in an internal combustion engine. The coal spray oil is not classified to subitem 10.30 of the Schedule as it cannot be used in an internal combustion engine.

Even though the coal spray oil is not excisable, Mark's Recycling must pay excise duty on the burner fuel that was used in its production. The burner fuel is considered to be delivered into home consumption at the point of blending with the duty paid diesel.

Mark's Recycling will need to lodge an excise return and pay the duty liability on the burner fuel.

13.3.3 HOW DO I WORK OUT THE AMOUNT OF EXCISE DUTY I NEED TO PAY?

The amount of excise you're liable to pay depends on the rate of excise duty that applies to the recycled oil on the day it's delivered into home consumption (including when it's consumed within your licensed premises) and the quantity involved.

What is the rate of excise?

The rate of excise you are liable to pay is set out in the Schedule.

For more information refer to Chapter 6 - Payment of Duty.

Example 13G

An oil recycler filters de-waters and demineralises waste oil consisting mainly of used engine lubricant oil. They produce a liquid hydrocarbon product suitable for use as a high grade industrial burner fuel.

The product does not meet industry product standards for heating oil and is not 'fuel oil' as defined in the Excise Tariff Act. As a consequence the product is classified to subitem 10.28 of the Schedule. The oil recycler pays excise duty at the rate in force on the day the product is delivered into home consumption.

How do I measure the volume of recycled oil?

If you deliver excisable goods into home consumption you must accurately measure volumes of recycled oil. This ordinarily means using calibrated tanks or flow meters.

If you recycle oil for your own use, you can measure the volume of the recycled oil by using:

a properly calibrated flow meter;
a formula that determines the volume of output by using historical data from similar oil, or
any other similarly accurate method that has been approved at the time your licence was issued.[343]

When do I have to pay excise duty?

For more information about payment of duty refer to Chapter 6 - Payment of Duty.

Two examples specific to the recycling industry are as follows.

Example 13H

Mario's Waste Oil Recycling produces 1,000 litres of diesel fuel from waste oil and sells the product for electricity generation.

This product is classified to subitem 10.10 of the Schedule and duty is payable on the diesel at the rate of $0.389[344] per litre. Mario's Waste Oil Recycling has a periodic settlement permission (PSP). Mario's Waste Oil Recycling declares the 1,000 litres on their weekly excise return and pays excise duty of $389.00.

Example 13I

Pauline's Brickworks holds an excise manufacturer licence to recycle waste oil. It collects 1,500 litres of waste oil and recycles it for use as a high grade burner fuel in their brick kilns.

The product is a petroleum based recycled waste oil that cannot be classified to a specific subitem of the Schedule. This product is classified to subitem 10.28 of the Schedule and excise duty is payable on the recycled waste oil at the rate of $0.389 per litre.

Pauline's Brickworks has a PSP. It declares the 1,500 litres on the weekly excise return that is lodged after the product is used in the brick kilns, and pays excise duty of $583.50.

13.3.4 WHEN CAN I GET AN EXCISE DUTY REMISSION OR REFUND?

In certain situations you may be entitled to a refund or remission of the excise duty paid or payable on recycled oils.[345] These circumstances were introduced at the same time as the introduction of the Product Stewardship for Oil (PSO) scheme to ensure no entitlement to a PSO benefit arises for oil products that are recycled using relatively simple processes and that these recycled oils are not subjected to the excise duty of 8.5 cents per litre under item 15 of the Schedule.

A remission of duty is available for recycled oil products if:

the recycled product is hydraulic oil, brake fluid, transmission oil, transformer oil or heat transfer oil classified to subitem 15.2 of the Schedule
no PSO benefit is payable
the recycled product will be used for the same purpose for which it was used before being recycled (i.e. recycled transmission oil will be used as transmission oil etc), and
the recycled product is delivered into home consumption under a PSP.

A refund of duty is available on recycled oil products if:

the recycled product is hydraulic oil, brake fluid, transmission oil, transformer oil or heat transfer oil classified to subitem 15.2 of the Schedule
no PSO benefit is payable
the product has been used for the same purpose for which it was used before being recycled.

For more information about excise remissions and refunds refer to Chapter 7 - Remissions, refunds, drawbacks and exemptions.

13.3.5 CAN I CLAIM A CREDIT OR BENEFIT FOR THE EXCISE DUTY I HAVE PAID?

If the product of your recycling activities is a taxable fuel[346] (for fuel tax credits purposes) you may be able to claim a fuel tax credit if you use this fuel in your business.

You may also be entitled to a benefit under the PSO program for the oil you recycle.

For more information on:

fuel tax credits visit Fuel schemes essentials on our website at www.ato.gov.au
PSO benefits, refer to Product stewardship for oil program (NAT 3793) on our website at www.ato.gov.au

13.4 PROCEDURES

13.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on oil recycling contact us as follows:

phone 1300 137 290
fax 1300 130 916
email us at ATO-EXC-Petroleum@ato.gov.au, or
write to us at

Australian Taxation Office

PO Box 3514

ALBURY NSW 2640

13.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO OIL RECYCLING?

The following are the penalties that may apply after conviction for an offence.

Manufacture

If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units.[348]

Move, alter or interfere

Note:

This includes moving underbond excisable fuel products from your premises to any other location or for export.

Deliver

Records

If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units.

Directions

If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units.[354]

False or misleading statements

Evade

Facilities etc.

If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units.[357]

13.6 TERMS USED

Excisable fuel products

Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule.

As these guidelines deal with fuel products, we have used the term excisable fuel products.

Excisable fuel products include:

petrol
diesel
renewal diesel
crude petroleum oil
condensate
heating oil
kerosene
fuel ethanol
biodiesel
compressed natural gas (CNG)
liquefied natural gas (LNG); and
liquefied petroleum gas (LPG.

Excise control

Goods are subject to excise control from the point of manufacture until they have been delivered into home consumption or for export.

Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act.

Excise return

An excise return[360] is the document that you use to advise us:

the volume of excisable fuel products that you have delivered into home consumption during the period designated on your PSP, or
the volume of excisable fuel products that you wish to deliver into home consumption following approval.

Home Consumption[361]

The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them.

Penalty units

A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $210.

Refund

A refund is the repayment of duty that has already been paid.

Remission

A remission of excise duty extinguishes the liability for duty that was created at the point of manufacture.

Section 50 direction

Underbond

This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into home consumption and goods moving between premises under a movement permission.

13.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

13.7.1 Excise Act 1901

Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods

Section 25 - Only licensed manufacturers to manufacture excisable goods

Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence

Section 27 - Licensed manufacturers to manufacture only at licensed premises

Section 61A - Permission to remove goods that are subject to CEO's control

Section 61C - Permission to deliver certain goods for home consumption without entry

Section 77J - Goods that are not covered by subitem 10.25, 10.26, 10.27, 10.28 or 10.30

Section 78 - Remissions, rebates and refunds

Item 18, Clause 1 of Schedule 1 - Circumstances under which refunds, rebates and remissions are made

13.7.2 Excise Regulations 2015

13.7.3 Excise Tariff Act 1921

Section 3 - Definitions

Section 9 - Registration for entitlement to grants or benefits

13.7.4 Product Grants and Benefits Administration Act 2000

13.7.5 Product Stewardship (Oil) Act 2000

Section 6 - Definitions

13.7.6 Product Stewardship (Oil) Regulations 2000

Regulation 4 - Amount of product stewardship benefit

13.7.7 Crimes Act 1914