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  • Refunds of duty

    A refund of customs or excise duty may apply if duty-paid goods, including fuel, are loaded onto a ship as ship's stores.

    Duty-paid fuel remaining in a ship's bunker when a ship resumes an international voyage is considered to be ship's stores. As such it would be eligible for a refund of the duty paid, but only if there is no entitlement to claim fuel tax credits.

    Residual bunker fuel that was acquired in Australia excise duty-paid or had customs duty paid on its deemed importation will:

    • continue to be eligible for fuel tax credits if a non-resident ship resumes its international voyage
    • only be eligible for a refund of duty if there is no fuel tax credit entitlement for any of the parties involved.

    Example 1: Morray Shipping Agency

    Upon arrival in Brisbane, Morray Shipping Agency arranges for the entry of imported fuel bunkers and payment of customs duty for APL Hong Kong, a foreign ship owned by Yang Shipping Lines. APL Hong Kong discharges all international cargo in Brisbane. It then carries out a number of domestic cargo voyages considered to be a long-term disconnection. It finally loads international cargo and departs for Auckland.

    Under non-resident agency rules, Morray Shipping Agency is entitled to claim the fuel tax credits on the fuel that Yang Shipping Lines acquired through them. This includes the fuel remaining in bunkers when the ship departs Australia. As the fuel is eligible for fuel tax credits, a refund cannot be claimed on the fuel remaining when the ship departs.

    End of example


    Example 2: ZK Shipping

    ZK Shipping is a foreign shipping operator. They arrange the supply and payment of duty-paid bunkers to be used by their ship, APL Hong Sang, during a long-term disconnection of its international voyage. Australasian Shipping Services, a local shipping agent, makes arrangements on their behalf for the supply of other ship's stores (including alcohol and cigarettes).

    Australasian Shipping Services cannot claim fuel tax credits as the fuel acquisition was not made through them. ZK Shipping must be registered for GST and fuel tax credits to claim fuel tax credits on fuel acquired. Once entitled to claim for all fuel, they cannot apply for a refund of duty on the balance of fuel in its bunkers when the international voyage is resumed.

    End of example


    Example 3: Arin Shipping

    Arin Shipping, a small New Zealand company, own and use the MV Tilbus to transport cargo in a series of short-term Australian voyages. The ship departs for Auckland with duty-paid fuel in its bunkers. Arin Shipping is not registered for GST or fuel tax credits as their turnover is under the GST threshold.

    Having ceased its local operations, Arin Shipping may apply for a refund of duty on the balance of fuel in its bunkers upon departure as there is no entitlement to fuel tax credits for that fuel.

    End of example
      Last modified: 17 Nov 2020QC 22910