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ATO Interpretative Decision

ATO ID 2003/1166 (Withdrawn)

Excise

Energy Grants (Credits) Scheme: off-road diesel fuel
FOI status: may be released
  • This ATO ID is withdrawn due to amendments to the Energy Grants (Credits) Scheme Act 2003 applying after 30 June 2006. Despite its withdrawal the ATO ID continues to be the precedential view in respect of entitlement.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Status of this decision: Decision Withdrawn 30 April 2010
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is a vegetable oil emulsion consisting of vegetable oil blended with diesel fuel and ethanol 'off-road diesel fuel' as defined in regulation 9 of the Energy Grants (Credits) Scheme Regulations (the Regulations) for the purposes of the Energy Grants Credits Scheme (EGCS)?

Decision

Yes. A vegetable oil emulsion consisting of vegetable oil blended with diesel fuel and ethanol is 'off-road diesel fuel' as defined in regulation 9 of the Regulations for the purposes of the EGCS.

Facts

An entity manufactures two fuels. Each fuel consists of a blend of vegetable oil, diesel fuel and ethanol.

The proportions of each part of the blend vary, but include a maximum of 41% diesel and a minimum of 50% vegetable oil.

The blend has a sulphur content not exceeding 50 parts per million.

The fuels are capable of being used as fuel in a diesel engine.

Each blend is an excisable blended petroleum product and excise duty has been paid on the fuels.

Reasons for Decision

For the purposes of the EGCS, 'off-road diesel fuel' is defined at sub regulation 9(1) of the Regulations as:

a product on which: ...

(ii)
excise duty has been paid at a rate that is applicable to diesel fuel, under the Schedule to the Excise Tariff Act 1921, at the time of payment;

that is capable of being used as fuel in a diesel engine;...

Under Item 11 of the Schedule to the Excise Tariff Act, two rates are given for diesel fuel, depending on the level of sulphur in the fuel. As the product is suitable for use in a diesel engine, it will be considered to be 'off-road diesel fuel' if excise duty has been paid on the product at a rate that corresponds with either of the rates specified for diesel fuel.

Section 5 of the Excise Tariff Act imposes excise duty on those goods which are described in the Schedule to the Excise Tariff Act (the Schedule). The Schedule specifies those goods which are excisable, and the rate of duty levied on those goods.

Item 12 of the Schedule deals with blended petroleum products. The rate of duty that applies to items classified to Item 12 of the Schedule is calculated in accordance with section 6G of the Excise Tariff Act.

Subsection 6G(2B) of the Excise Tariff Act gives the formula for calculating the rate of duty of a product that is a blend of diesel, ethanol and any other substances. Under this formula a product will attract excise duty at one of the rates that applies to diesel fuel where sulphur content does not exceed 50 parts per million.

As the sulphur content of both vegetable oil emulsions does not exceed 50 parts per million, they are products on which excise duty is payable at the diesel rate and which are capable of being used as a fuel in a diesel engine. Accordingly, they are 'off-road diesel fuel' for the purposes of the EGCS.

Date of decision:  19 November 2003

Legislative References:
Excise Tariff Act 1921
   section 5
   section 6G
   subsection 6G(2B)
   The Schedule, item 12

Excise Act 1901
   subsection 4(1)
   section 77G

Excise Regulations 1925
   Regulation 176

Energy Grants (Credits) Scheme Regulations 2003
   Regulation 9

Related ATO Interpretative Decisions
ATO ID 2003/1164
ATO ID 2003/1165
ATO ID 2003/1167

Other References:
Excise Tariff Proposal No 1 (2003)

Keywords
EGCS off-road diesel
Energy grants (credits) scheme

Business Line:  Excise

Date of publication:  24 December 2003

ISSN: 1445-2782

history
  Date: Version:
  19 November 2003 Original statement
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