Calculating the amount of excise duty to pay
If you have a periodic settlement permission (PSP) you need to pay excise duty at the same time you lodge your excise duty return, either:
- weekly
- monthly.
To calculate the amount of excise duty you need to pay, you need to know the:
- type of excisable product
- total volume of the product
- current excise duty rate for that product.
Refer to details of how to measure product volume in our Excise Determinations:
- EXC 2016/7 – Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2016 (No. 2)
- EXC 2016/8 – Excise (Volume of LPG – Temperature and Pressure Correction) Determination 2016 (No. 2)
- EXC 2016/9 – Excise (Mass of CNG) Determination 2016 (No. 2).
Formula
For liquid fuel and petroleum products, you work out excise duty on the total volume of product, using the following formula:
Total volume (litres) of product x current excise duty rate.
Make sure you keep adequate records that show how you worked out the amount of excise duty you had to pay.
Decimal places for calculations
You should make all calculations to 3 decimal places, up to when you include the information on your excise return. You may consolidate product lines by tariff item or sub-item on the return.
Calculating excise duty on excisable fuel blends
The total volume of a fuel blend will be subject to excise duty, less any duty that has previously been paid on any fuel blend components. That is less any:
- customs duty already paid on imported fuels (except biofuels)
- excise duty on excisable fuels.
Special calculation for blends containing biofuels
Where a component of the blended fuel is an imported biofuel, the amount of duty payable on the biofuel component is equal to the full petrol or diesel excise rate.
To work out the amount of duty you can deduct for blends that contain duty paid biofuels (biodiesel or fuel ethanol), you can only use the excise duty rate for the biofuel multiplied by the quantity of biofuel.
Example: biodiesel blended with underbond diesel
All Seasons Fuel Blenders (ASFB) operate a licensed site where they blend biodiesel with underbond diesel.
ASFB buys 20,000 litres of imported and customs duty-paid biodiesel. The customs duty for the biodiesel was $9,540 (20,000 litres × $0.477). They then blend the biodiesel with the 80,000 litres of underbond diesel on 15 March 2023.
ASFB delivers the 100,000 litres of B20 (20% biodiesel and 80% diesel) on 22 March 2023 under their periodic settlement permission (PSP).
When calculating their excise duty liability, they:
- multiply the volume of diesel by the excise duty rate for diesel (80,000 litres × $0.477 = $38,160)
- multiply the volume of biodiesel by the excise duty rate for biodiesel (20,000 litres × $0.111 = $2,220).
ASFB can deduct duties already paid on a component of the blend. However, in calculating the duty already paid, they must treat the biodiesel as excisable even though it was imported and has a higher customable rate.
As the excise duty rate for biodiesel is $0.111 on 15 March 2023, they can only have a deduction of (20,000 × $0.111 = $2,220).
The total excise duty of $38,160 ($38,160 + $2,220 - $2,220) is payable on the 100,000 litres of B20 delivered.
End of exampleCalculations for imported fuels
The above example applies equally to imported fuel ethanol.
Excisable fuel components
The excisable components of a blend must be duty paid if applicable, even if the:
- resulting blend is not excisable under the Excise Tariff Act 1921
- process undertaken is not excise manufacture.
If you blend underbond excisable fuel, it must occur at a licensed premises. You must pay excise duty on the excisable fuel components, either:
- before you blend them
- as stated in your periodic settlement permission (PSP).