Senate

A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999

Revised Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY THE HOUSE OR REPRESENTATIVES TO THIS BILL AS INTRODUCED

Chapter 10 - Diesel Fuel Rebate Scheme

Overview

10.1 This Chapter explains the amendments contained in Schedule 6 to this Bill. Schedule 6 contains a number of minor technical amendments to the Customs Act, the DFRS Act and the Excise Act.

Summary of the legislation

10.2 The DFRS Act amended the Customs Act to provide a diesel fuel rebate for purchases of diesel and like fuels where that fuel is for use in:

·
rail transport in the course of carrying on an enterprise; or
·
marine use in the course of carrying on an enterprise.

10.3 The amendments will change the reference from 'marine use' to 'marine transport' in accordance with the Government's original intent. It will also set the rebate rates for rail and marine transport from 1 July 2000 at the same rate as that applying to primary production.

Details of amendments

10.4 Item 1 amends subsection 164(1)(ac) of the Customs Act to clarify that the diesel fuel rebate is extended to marine transport in accordance with the Government's original intent.

10.5 Item 2 inserts new subsection 164(4C) to the Customs Act to set the rebate rate for rail and marine transport from 1 July 2000 at the same rate as that applying to primary production. This will allow present arrangements to continue under which rebates are paid on an average of the rate applying in the 6 months prior to lodgement of the rebate claim. The application of the averaging provisions means that an increase in the excise rate is phased in over 6 months.

10.6 Item 3 amends subsections 164(5AC)(a) and (b) of the Customs Act to provide that if you are entitled to the rebate under more than one category, you are entitled to the greater rate of rebate.

10.7 Subsection 164(7) of the Customs Act is amended by replacing the definition of marine use with a definition of marine transport. The new definition makes it clear that the rebate is payable for marine transport and includes transport by vessels in or on fresh water but does not include any transport relating to forestry . [Items 4 and 5]

10.8 DFRS Act sets the rebate rate for rail transport and marine use at the amount per litre of duty paid on the diesel fuel. Item 6 repeals the provision contained in the Customs Act and item 7 repeals the provision contained in the Excise Act. Item 2 and item 9 provide that the rebate rate for rail and marine transport from 1 July 2000 is the same rate as that applying to primary production.

10.9 Item 8 amends subsection 78(1)(ac) of the Excise Act to clarify that the diesel fuel rebate is extended to marine transport in accordance with the Government's original intent.

10.10 Item 9 inserts new subsection 78A(4C) to the Excise Act to set the rebate rate for rail and marine transport from 1 July 2000 at the same rate as that applying to primary production.

10.11 Item 10 amends subsections 78A(5AC)(a) and (b) of the Excise Act to provide that if you are entitled to the rebate under more than one category, you are entitled to the greater rate of rebate.

10.12 Reference to marine use in subsection 78A(7) of the Excise Act is amended to marine transport. [Item 11]


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