ATO Interpretative Decision
ATO ID 2008/84
Excise
PSO: accredited laboratory and appropriate facilities, resources and expertiseFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does the Commissioner consider that accreditation for microbiological analysis and for industrial chemical analysis and testing demonstrate that a laboratory has the 'appropriate facilities, resources and expertise' for the purposes of the definition of 'independent laboratory' in subregulation 3(1) of the Product Stewardship (Oil) Regulations 2000 (PSO Regulations)?
Decision
Yes, provided the accreditation is for microbiological analysis in the case of mutagenicity testing and for industrial chemical analysis and testing for the other requirements, the Commissioner considers that a laboratory that is accredited demonstrates that it has 'appropriate facilities, resources and expertise' for the purposes of the definition of 'independent laboratory' in subregulation 3(1) of the PSO Regulations.
Facts
A recycler of used oil has engaged a laboratory to test a sample of oil that the recycler has processed. The laboratory tests the sample against the criteria in Schedule 1 to the PSO Regulations.
The laboratory is accredited to perform specific testing and analysis namely microbiological analysis and industrial chemical analysis specifically in the testing of petroleum liquid fuels and lubricants.
The laboratory is accredited in compliance and assurance processes by an internationally recognised organisation and is also licensed by the relevant Commonwealth authority for microbiological analysis and testing.
The laboratory is also accredited by an independent body for the testing of petroleum liquid fuels and lubricants. The accreditation body is endorsed by the Commonwealth Government.
Reasons for Decision
Subregulation 4(3) of the PSO Regulations provides that for a benefit under item 1 in the table of subregulation 4(1) of the PSO Regulations, the re-refined base oil must be tested by an independent laboratory against the criteria in Schedule 1 to the PSO Regulations (Schedule 1).
Included in the definition of 'independent laboratory' in subregulation 3(1) of the PSO Regulations is the requirement that the laboratory has the 'appropriate facilities, resources and expertise to conduct the tests necessary for the purposes of Schedule 1'.
Schedule 1 stipulates that the re-refined base oil must:
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- be non-carcinogenic, demonstrated by having a prescribed mutagenicity index using the Modified Ames Test;
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- be tested to establish the levels of:
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- poly-aromatic hydrocarbons
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- polychlorinated biphenyls
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- polychlorinated dibenzo-p-dioxins
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- total acid level
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- heavy metals (arsenic, cadmium, chromium and lead); and
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- have a clear and bright appearance.
The Commissioner considers that the person or persons who conduct the tests specified in Schedule 1 must be qualified, trained and experienced. The Modified Ames Test relies on analysing bacterial growth. Therefore the person or persons must be qualified, appropriately trained and experienced in microbiological analysis to conduct a Modified Ames Test. In reference to the other criterion of Schedule 1 they must be accredited for industrial chemical analysis of petroleum liquid fuels and lubricants.
Assessment by a recognised accreditation body involves a thorough evaluation of all the elements and processes of a laboratory and therefore accredited laboratories have demonstrated, in the course of gaining and maintaining their accreditation, that they have the appropriate skills, expertise, and equipment and have the appropriate practices and procedures in place to produce accurate and reliable test data.
It is therefore considered that a laboratory demonstrates that it has the appropriate facilities, resources, and expertise for the purposes of the definition of an 'independent laboratory' in subsection 3(1) of the PSO Regulations where it is:
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- accredited for industrial chemical analysis and testing, specifically in the testing of petroleum liquid fuels and lubricants; and
- •
- in reference to the testing of the mutagenicity properties of the oil, is accredited for microbiological analysis or licensed by the relevant Commonwealth authority for microbiological analysis.
The accrediting authority must be recognised in the accreditation for industrial chemical analysis and testing or in the accreditation of microbiological analysis.
Date of decision: 2 June 2008
Legislative References:
Product Stewardship (Oil) Regulations 2000
Schedule 1
subregulation 3(1)
subregulation 4(1)
subregulation 4(3)
ATO ID 2008/85
Keywords
Product stewardship oil scheme
PSO base oil
PSO recycling
PSO re-refining
ISSN: 1445-2782