House of Representatives

Excise Tariff Amendment (Fuels) Bill 2004

Explanatory Memorandum

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

Chapter 2 - Increase in excise rates for aviation fuels

Outline of chapter

2.1 Schedule 1, Part 3, amends the Schedule to the Excise Tariff Act 1921 by increasing excise duty rates applicable to aviation kerosene and aviation gasoline by $0.00306 per litre.

Context of amendments

2.2 The increase in excise duty rates for aviation fuels was announced in the 2003-2004 Federal Budget to raise an additional $6.5 million to be applied to the Civil Aviation Safety Authority (CASA) to address a funding shortfall. The revenue from aviation fuel duty is estimated to be 11% lower than forecast as a consequence of cessation of Ansett operations, world-wide reduction in air travel demand and introduction of larger, more fuel-efficient aircraft. This measure will assist CASA to continue carrying out its safety regulatory responsibilities with adequate resources.

2.3 Excise Tariff Proposal No. 3 (2003) implemented the measure from 1 July 2003.

Summary of new law

2.4 The amendments increase the excise duty rates for aviation gasoline and aviation kerosene by $0.00306 per litre, resulting in rates of $0.03151 per litre for aviation kerosene and $0.03114 per litre for aviation gasoline.

Detailed explanation of new law

2.5 Kerosene for use as fuel in an aircraft is classified to subitem 11(A) of the Schedule to the Excise Tariff Act 1921 with a current excise duty rate of $0.02845 per litre. Gasoline for use as fuel in aircraft is classified to paragraph 11(H)(1)(a) for packages not exceeding 210 litres and paragraph 11(H)(2)(a) if it is other than in packages not exceeding 210 litres. The current excise duty rate for both classifications is $0.02808 per litre.

2.6 The new rate for aviation kerosene is $0.03151 per litre. [Schedule 1, Part 3, item 23]

2.7 The new rate for aviation gasoline is $0.03114 per litre. [Schedule 1, Part 3, items 24 and 25]

Application and transitional provisions

2.8 Schedule 1, Part 3, is taken to have effect on and from 1 July 2003.

View full documentView full documentBack to top