EXC 2016/3 - Explanatory statement
Australian Government
Excise Act 1901
1. This Explanatory Statement is provided in accordance with section 26 of the Legislative Instruments Act 2003.
2. Under section 65 of the Excise Act 1901 (Excise Act) the CEO may make rules for determining the volume of excisable goods.
3. This instrument is made under section 65 of the Excise Act. It provides rules for working out the excisable volume of liquid fuel that is being entered for home consumption, and for the purposes of working out the amount of excise duty payable on such fuel.
Repealing of previous instrument4. Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2015 (No. 1) - F2015L01732) registered on the 02/11/2015 is repealed on the commencement of this determination.
5. The new instrument includes directions on the manner of incorporation of the extrinsic materials that are referenced within the determination.
6. Aside from these updated directions the circumstances set out in the previous determination remain unchanged.
7. The previous 2015 determination (F2015L01732) replaced Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No. 1) - F2011L02373 (the original instrument).
8. Paragraph 8 of the original instrument provided a definition of biodiesel that was mirrored in the Excise Tariff Act 1921 (Tariff Act). The legislative provisions in the Excise Tariff Amendment (Ethanol and Biodiesel) Act 2015 resulted in a new definition for biodiesel in the Tariff Act. Additionally, paragraph 11 of the original instrument contained a reference to subitem 10.11 of the Schedule to the Tariff Act which has been repealed by the above mentioned excise tariff amendment.
9. The replacement of the original instrument gave effect to the above changes by referring to the new definition of biodiesel in the Tariff Act and deleting from paragraph 11 references to subitem 10.11. In addition, paragraph 12 of the original instrument had been amended to take into account a reference to the Excise (Volume - recycled waste oil) Determination 2006 (No. 2) which will cease on 1 October 2016 due to the sun-setting provisions under the Legislative Instruments Act 2003.
Date of effect10. The determination will have effect from the day after it is registered.
Effect of this instrument:11. The determination specifies the methods available for determining the volume of excisable liquid fuel. The determination also specifies the types of fuel and aggregated clearances as factors that permit the use of a particular method.
12. Compliance cost impact: Minor - There will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
The rules13. The volume of liquid fuel must be determined at the time of delivery for home consumption using one of the permissible methods.
14. Pursuant to Method 1, a person who has aggregated clearances of liquid transport fuels exceeding 50,000 litres per accounting period must, depending on the type of fuel, use either the American Society for Testing and Materials (ASTM) volume correction factors or the Practical Alcohol Tables. Both available methods are used to convert the volume of fuel at ambient temperature to volume of fuel at 15o Celsius.
Revised computerised software editions of the above measurement standards installed in metering equipment may also be used to calculate the volume of liquid transport fuels in litres at 15? Celsius during dispensation.
Example: If 1 litre of diesel has a density of 840 kg/m3 at 15o Celsius, then 30,000 litres of diesel at 30o Celsius would need to be adjusted by the volume correction factor of 0.9873 m3 (as per the ASTM Petroleum Measurement Tables) to determine its volume at 15o Celsius. Application of the relevant factor would result in an adjusted volume of 29,619 litres. Excise duty is then calculated on 29,619 litres for a person who has aggregated clearances of transport fuels exceeding 50,000 litres per accounting period.
15. A person who does not have aggregated clearances of liquid transport fuels exceeding 50,000 litres per accounting period and does not have a requirement on their periodic settlement permission to correct to 15º Celsius on all their fuel clearances may either correct the volume of fuel to 15 degrees Celsius (Method 1) or use the measured volume of fuel at ambient temperature (Method 2).
Example: Following on from the example at paragraph 15 if that person's aggregated clearances of liquid transport fuels are less than 50,000 litres per accounting period, that person may either correct the volume of fuel to 15o Celsius (i.e. 29,619 litres) or use the measured volume of fuel at ambient temperature (i.e. 30,000 litres).
16. A person who has clearances of fuels classified to sub-items 10.1, 10.2, 10.3, 10.15, 10.16, 10.25, 10.26, 10.27 and 10.28 of the Schedule to the Tariff Act in any quantity may use either Method 1 or 2.
17. A person must use one Method for the duration of an accounting period, unless authorised in writing by the CEO to do otherwise.
18. Aggregated clearances means the volume of liquid fuel delivered for home consumption in an accounting period of 12 months from all excise licensed establishment/s based on historical data or the volume of liquid fuels reasonably expected to be delivered for home consumption in an accounting period if no historical data is available.
19. The period adopted for the calculation of aggregated clearances is the accounting period adopted for income tax purposes as provided in section 18 of the Income Tax Assessment Act 1936.
20. Liquid transport fuels are defined as gasoline (including that used in an aircraft), diesel, kerosene (for use in an aircraft), fuel oil, fuel ethanol, biodiesel and blends consisting primarily of gasoline or diesel.
21. For transport fuels classified as gasoline (including that used in an aircraft), diesel, kerosene (for use in an aircraft), fuel oil, biodiesel and blends consisting primarily of gasoline or diesel, the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors, Volume VIII are used to convert the volume of the fuel to 15° Celsius.
22. For transport fuels classified as fuel ethanol, the Practical Alcohol Tables are used to convert the volume of the fuel to 15° Celsius.
23. To convert the volume of the fuel to 15° Celsius a person must use the current edition or any future editions of the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors, Volume VIII and similarly the Practical Alcohol Tables, as they change from time to time.
Consultation24. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law.
25. Because there is no substantive change to the scope of the previous instrument, this instrument is considered to be minor or machinery in nature.
26. As such, no further consultation has been undertaken in the development of this instrument.
Statement of Compatibility with Human Rights
This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1)This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative InstrumentExcise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) amends and replaces Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2015 (No. 1). The determination provides rules for working out the excisable volume of liquid fuel that is being delivered for home consumption which is then used for the purposes of working out the amount of excise duty payable on such fuel.
Human rights implicationsThis legislative instrument does not engage any of the applicable rights or freedoms as it is considered to be minor or machinery in nature. It provides greater certainty in relation to excise obligations around the measurement of liquid fuels.
ConclusionThis legislative instrument is compatible with human rights as it does not raise any human rights issues.
17 February 2016
Tim Dyce
Deputy Commissioner of Taxation
Legislative References:
Excise Act 1901
65
Excise Tariff Act 1921
Schedule
Legislative Instruments Act 2003
section 26
Income Tax Assessment Act 1936
section 18
Excise (Volume of Fuels - Temperature Correction) Determination 2009 (No. 1) - F2009L02547
Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No. 1) - F2011L02373
Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2015 (No. 1) - F2015L01732
Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) - F2016L00133
Other References:
American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors Volume VIII (at the time of publication this reference is available from http://www.astm.org )
Practical Alcohol Tables (PAT) (at the time of publication this reference is available from http://bookshop.europa.eu )