House of Representatives

Explanatory Memorandum

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

Chapter 2 - Record-keeping requirements

Overview

2.1 This Chapter explains new Part 4 of the Diesel and Alternative Fuels Grants Scheme Act 1999 (DAFGSA). This Part explains what records need to be created and retained if you are to be entitled to a fuel grant.

2.2 The rules in new Part 4 explain how long the records must be kept and what happens if they are not kept or produced when required by the Commissioner of Taxation (the Commissioner).

Summary of the legislation

2.3 New Part 4 contains the rules about what records need to be kept and retained to be entitled to a fuel grant. Broadly, to be entitled to claim a fuel grant:

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records substantiating the claim must be kept and retained until the claim is made;

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the records must be in English, or readily accessible and easily convertible into English;

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the Commissioner can make a written determination setting out the kind of records, and the manner in which they are to be kept. Keeping records in accordance with that determination will satisfy the requirement to keep records substantiating a claim for a grant;

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records substantiating a claim for the grant must be kept for 5years after the claim was made, unless the Commissioner tells you that you do not need to keep them, or in the case of a company, the company has been finally dissolved;

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the Commissioner can require records to be produced; and

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special rules apply where records are lost or destroyed.

Purpose of the amendments

2.4 The overall purpose of the amendments is to ensure that sufficient records are kept to ensure that a claim for the grant can be substantiated.

Explanation of the amendments

No entitlement to fuel grants unless record-keeping requirements are met

2.5 You are not entitled to a fuel grant unless the record-keeping requirements set out in new Part 4 are satisfied.

2.6 To be eligible to claim a fuel grant, records substantiating a claim for the grant must be kept and retained. [New paragraph 17(1)(a) and new subsections 18(2) and 19(2), item 40 of Schedule 1]

2.7 If you make a statement in a claim undertaking to comply with the post-claim record keeping requirements the Commissioner can assume that you will comply with those requirements. If you fail to comply with those requirements the Commissioner may amend your assessment. [New subsection 17(2), item 40 of Schedule 1]

Commissioner may make determinations as to what records satisfy the record-keeping requirements

2.8 An applicant for a fuel grant will be taken to have satisfied the requirement to keep records substantiating a claim if he or she keeps records of the kind, and in a manner specified in a written determination made by the Commissioner [new subsection 18(4), item 40 of Schedule 1] . A determination made by the Commissioner under new subsection 18(4) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 [new subsection 18(5), item 40 of Schedule 1] .

Records have to be retained for up to 5 years

2.9 The records kept to substantiate a claim must be retained until the time of the claim for the fuel grant [new paragraph 18(2)(b), item 40 of Schedule 1] and for a further 5years after the claim [new subsection 19(2), item 40 of Schedule 1] . The records need not be retained for this time if the Commissioner tells the applicant for the grant that the records do not need to be retained, or if the applicant for the grant is a company, it is finally dissolved before the end of the 5 years [new subsection 19(5), item 40 of Schedule 1] .

Records to be in English or easily convertible into English

2.10 The records kept and retained by the applicant for a fuel grant must be in the English language, or be readily accessible and easily convertible into the English language. [New subsection 18(3), item 40 of Schedule 1]

Commissioner may require records to be produced

2.11 The Commissioner may give written notice to a person, who has applied for or has been paid a fuel grant, to produce the records they have kept to substantiate their claim for the grant. The notice must give 28 days or more to comply. The 28 days will start from the day after the notice is given. The Commissioner can extend the time to comply with the notice. [New subsections 19(3) and 19(4), item 40 of Schedule 1]

2.12 Merely failing to comply with the notice will not result in an offence under section 8C of the Taxation Administration Act 1953. However, failing to comply with the notice will mean that the record keeping requirements have not been satisfied and it will be taken that there is, and has never been, an entitlement to claim the grant. [New subsection 19(6), item 40 of Schedule 1]

Records that are lost or destroyed

2.13 New section 20 sets out the special rules that apply where records you are required to keep under new sections 18 and 19 are lost or destroyed. [New section 20, item 40 of Schedule 1]

2.14 If you have a complete copy of the lost or destroyed record, that copy will be treated as the original from the time the original was lost or destroyed [new subsection 20(2), item 40 of Schedule 1] . If such a copy is not available, but the Commissioner is satisfied that you took reasonable precautions to prevent the loss or destruction your entitlement to a fuel grant is not affected by your failing to retain or produce the original record [new subsection 20(3), item 40 of Schedule 1] .