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  • Excluded blends (not considered excise manufacture)

    Some fuel blending is not considered excise manufacture if the resulting blend is exempt under:

    • section 77H of the Excise Act, or
    • a determination (legislative instrument).

    Excise duty is not payable in the following circumstances, as these blends are excluded and are not considered to be manufactured for excise purposes.

    • A blend that cannot be used in an internal combustion engine, when any fuel components of the blend have been duty paid at the applicable rate.
    • A blend that can be used in an internal combustion engine where excise or customs duty has been paid on all components in the blend. The rate of duty paid must be the same, except where the rates are different due to  
      • a component being biodiesel or fuel ethanol
      • the twice yearly indexation of fuel duty rates
       
    • Fuels excisable under tariff item 10 of the Schedule to the Excise Tariff Act are exempt under a determination, if any of the following apply
      • when oil and gasoline are blended for use as two-stroke gasoline (petrol) and duty has been paid on both the oil and the gasoline
      • fuels that are placed in a tank containing remnants of other fuels excisable under tariff item 10 or another substance (incidental blend)
      • duty-paid diesel or biodiesel that is blended with certain stabilised crude oil
      • fuels on which duty has been paid that are blended with a dye
      • fuels on which duty has been paid and which are blended with prepared additives (other than methanol or fuel excisable under tariff item 10 or their imported equivalents) that enhance the performance of an internal combustion engine or assist in its maintenance and either of the following applies  
        • they are packaged into containers of not more than 10 litres capacity
        • the total amount of prepared additives in the final blend does not exceed 0.5% volume/volume and are packaged into containers of at least 10 litres capacity
         
       
    • A blend that we have determined to be no longer a fuel under section 95–5 of the Fuel Tax Act 2006 (Fuel Tax Act).

    See also:

    In addition to the above, excise duty is not payable on some blends involving gaseous fuel, as these blends are not considered to be manufactured for excise purposes, if one of the following applies.

    • It is a blend of LPG or LNG and a remission of excise or customs duty has been applied to all components of the fuel blend because it is intended for non-transport use.
    • The blend is exempted by a determination.

    If excise duty has been paid on all the excisable components of the blend, and the resulting blend is not excisable, you will have no further excise liability or excise responsibilities.

    If an entity (including you or your supplier) has been entitled to a fuel tax credit on any of the components of the blend, then the blending is excise manufacture and you will still have excise responsibilities.

    See also:

    Example 1: Gaseous fuel mixed duty rates

    John is a service station operator. On 3 July 2015, John receives 10,000 litres of LPG that was duty paid (with no remission applied because it was intended for transport use). The supplier adds this fuel to John's tank containing 5,000 litres of LPG that was duty paid before 1 July 2015 at a different rate (also with no remission applied because it was intended for transport use).

    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.

    End of example

    See also:

    • EXC 2014/1 Excise (Blending exemptions) Determination 2014 (No.1)
      Last modified: 07 Feb 2017QC 19106