Excise guidelines for the fuel industry
This document has changed over time. View its history.
07 REMISSIONS, REFUNDS, DRAWBACKS & EXEMPTIONS
|OUR COMMITMENT TO YOU The information in this publication is current at August 2012. This publication is an expression of the Commissioner's opinion on the operation of fuel excise legislation. This publication is not legally or administratively binding on the Commissioner and is not a 'public ruling' for the purposes of Division 358 of Schedule 1 to the Taxation Administration Act 1953. If you feel this publication does not fully cover your circumstances, please seek help from the Tax Office or a professional adviser. Since we regularly revise our publications to take account of any changes to the law, you should make sure this edition is the latest. The easiest way to do this is by checking for a more recent version on our website at www.ato.gov.au|
- when you can apply for a remission, refund or drawback
- what happens if you are overpaid a refund or drawback
- when fuel products are exempt from excise duty
- how to apply for a remission, refund or drawback, and
- penalties that can apply to offences in relation to remissions, refunds, drawbacks and exemptions.
|'Pillaged' means to strip of money or goods by open violence, as in war; plunder.  This does not cover simple cases of theft.|
|'Lost' in this context does not simply mean can not be found. For example a tank may spring a leak and it is known that the fuel has drained away. The fuel has been lost and cannot be used by anyone as a fuel.|
|For more information about payment of duty see Chapter 6 - Payment of duty.|
|Example 7A Fuel which is under bond is accidentally destroyed by fire at a licenced site. The owner applies for a remission of duty on the destroyed fuel. If approved, this would extinguish the duty liability.|
|Example 7B A manufacturer receives an order from a diplomatic mission for fuel, for official use. The manufacturer delivers the fuel, into the Australian domestic market (to the diplomatic mission), under the terms of their PSP. (The terms of the PSP may require the manufacturer to submit an Excise remission (NAT 4289) to us, after delivery of the fuel.)|
|For more information about Periodic settlement permissions refer to Chapter 6 - Payment of duty.|
|Example 7C: LPG delivered under settlement permission Elizabeth's business is licensed for excise purposes and holds a periodic settlement permission. The business supplies LPG to Kathleen's business for the purposes of heating during the 2012-2013 financial year. Kathleen advises Elizabeth that she will not be using the LPG in the internal combustion engine of a motor vehicle or vessel. This means a partial remission applies and Elizabeth will only have to pay the equivalent carbon charge on the LPG, not the higher transport duty rate.|
|Example 7D: LPG delivered no settlement permission applies Susan manufactures LPG. Susan receives an order from Brian who explains that he will not be using the fuel in an internal combustion engine of a motor vehicle or vessel. As Susan does not hold a periodic settlement permission, she must lodge an entry and pay duty before she can deliver the fuel to Brian. Susan applies the partial remission and pays a reduced amount of duty. Once the entry is passed, Susan can deliver the fuel to Brian. This means that Susan must remit excise duty at a rate equivalent to the carbon charge prior to delivering the LPG to Brian.|
|Example 7E: LPG delivered for mixed use Aaron manufactures LPG. Aaron delivers LPG to Christopher in a bulk tank for transport and non-transport use. The LPG is excisable. As Aaron supplies the LPG to Christopher for mixed use he cannot apply a remission to the LPG. This means that Aaron must pay excise duty at the transport rate in relation to all the LPG supplied to Christopher. Christopher may be entitled to a fuel tax credit depending on his use of the fuel.|
|Example 7F: LPG delivered for transport use by a distributor Huey's business is licensed for excise purposes and supplies LPG to a site specified in a manufacturer licence held by Daisy's Distributors. Daisy holds a movement permission that allows the LPG to move from Huey's licensed site without duty being paid. Daisy distributes fuel to both transport clients and non-transport clients. Where Daisy distributes the LPG to service stations and trucking companies for transport purposes, Daisy will be liable to pay duty on the fuel and no remission will be available.|
|For more information about movement permissions refer to Chapter 5 - Movement permissions.|
'Not to be used, or supplied, for transport use. Penalties apply'. [143E]The statement must appear on the first page of the tax invoice you provide. [143F]
|The phrase 'excisable LPG use' means to use LPG in a system for supplying fuel to an internal combustion engine of either a motor vehicle or a vessel, either directly or by filling another tank connected to such an engine.|
|The phrase 'excisable LPG use' does not include the use of LPG for a motor vehicle that is merely designed to move goods with a forklift and is for use primarily off public roads.|
- in, or into, a container with a capacity that does not exceed 210kgs; or
- to a residential premises and the LPG is not supplied, in whole or in part, for the purpose of carrying on an enterprise. [143G]
- LPG is sold or supplied to you; and
- you use the LPG for an excisable LPG use; and
- an LPG remission applied to the LPG at the time of the use. [143I]
- you intentionally sell LPG; and
- you know that, or should reasonably have known as to whether, the LPG will be used for an excisable LPG use, and
- the LPG is used for an excisable LPG use; and
- an LPG remission to the LPG at the time of the use. [143K]
- 500 penalty units; and
- 5 times the amount of duty that would be payable on the LPG at the rate of duty payable on excisable LPG on the day the LGP was used. [143L]
|For more information about offences and penalties refer to Chapter 9 - Offences.|
- Duty has been paid on fuel that was lost or destroyed.
Duty has been paid on excisable fuel products, however it is later found that, while the goods were subject to excise control (i.e. while they were at the licensed site), they deteriorated or had been damaged, pillaged, lost or destroyed,
Example 7G A licensed entity that does not have a periodic settlement permission enters a quantity of fuel and pays the appropriate duty. Before the goods are delivered from the licensed premises a fire destroys the fuel. As the fuel products were still subject to excise control when they were destroyed, the licence holder can apply for a refund of duty on the fuel products. Upon receipt of this application and satisfactory evidence of the destruction of the fuel, the refund will be paid.
- Duty-paid fuel products, while the goods are subject to excise control, are not worth the amount of excise duty paid. 
- Duty has been paid through manifest error of fact or patent misconception of the law.
These circumstance applies to an error that is evident, obvious or apparent and also in situations where duty has been paid for goods entering the Australian domestic market that are not in fact excisable. In both cases a refund of the duty paid would be payable. Example 7H The system used by an entity to record deliveries into the Australian domestic market and calculate their duty liability on a weekly basis incorrectly identifies a sale of gasoline for aviation use as tariff item 10.6 and pays excise duty at a rate of $0.38143 per litre rather than the applicable rate of $0.08616. The entity identifies the error after the end of the settlement period. It is eligible to apply for a refund for the difference between the duty paid and the duty that was properly payable.
- Duty-paid goods have been taken up as ship's stores or aircraft's stores.  Ship's stores on overseas ships and aircraft's stores on international flights are not subject to excise duty. Where duty has been paid and the excisable fuel products are subsequently re-directed for use on ships or aircraft travelling overseas (for example bunker fuel), this refund circumstance may apply. This circumstance does not apply where a fuel tax credit is applicable.
- Under a directive by a Minister of State,  duty-paid goods are withdrawn from circulation on grounds of public health or safety and returned to the manufacturer. 
- Petrol that is returned to a manufacturer or to a warehouse.
'Petrol' does not only mean gasoline. It also includes any goods classified to item 10 or 15 of the excise tariff, other than goods that have been used.
As gaseous fuels are classified to subitems 10.19A, 10.19B and 10.19C, they are captured by the definition of 'petrol'.
The circumstance applies to petrol that is returned to a licensed petroleum terminal. Duty may be refunded when the petrol returns to underbond stock holdings. It does not have to be returned to the original manufacturer.
Returns can occur for a number of reasons, including:
- over delivery, or
- vapour recovery. This relates to vapour that is pumped out of a tank at a service station and captured within the tanks on the delivery truck when fuel is delivered. The vapour is extracted from the tanker back at the licensed premises and is converted back to a liquid form and will eventually form part of another delivery.
- Recycled hydraulic oil, brake fluid, transmission oil, transformer oil or heat transfer oil (classified to Excise Tariff Act subitem 15.2), for which no benefit is payable under the Product Stewardship (Oil) Regulations 2000, that has been used for the same purpose for which it was used before being recycled. 
- Duty has been paid on excisable fuel products and they are sold to a diplomatic or consular mission. 
|Time limits apply in making an application for a refund of duty. Generally, an application must be submitted within 14 days of the date on which the excise duty|
- prior to the exportation, you advise us that you intend to claim a drawback (We can exempt you from this requirement, in writing, on all claims for drawback. Alternatively, we can decide to pay a particular claim despite the fact you did not apply prior to exportation.  )
- before exportation of the excisable fuel products on which duty has been paid, the goods are available for inspection by us,
- you have not claimed a refund of excise duty in relation to the exported excisable fuel products
- the excisable fuel products will not be returned to Australia after they have been exported
- you keep records showing:
- that duty was paid on the fuel products (for example invoice), and
- the fuel products were exported (for example, an export declaration number or bill of lading)
- you lodge a drawback claim in the approved form no later than 12 months after the fuel products were exported, and
- the amount of the claim is at least $50.
- sold for use as ship's or aircraft's stores 
- with our approval, delivered as small samples,  or
- subject to full remission without application. 
What are ship's and aircraft's stores?Ship's and aircraft's stores are goods for the use of passengers or crew on international journeys or for the service of ships or aircraft on international journeys. If you supply ship's or aircraft's stores underbond , you must obtain a movement permission to move the goods from the licensed premises to the place of export.
Can I deliver samples without payment of duty?Yes, you may be able to deliver small samples without payment of duty and without entry. You must apply to us for approval and your application must:
- be in writing
- specify who the sample is for
- specify the quantity for approval, and
- specify the purpose of the sample.
|You do not include approved samples in your excise return ; however, you must keep records of any samples you deliver.|
- faxing to (03) 9285 1168
- posting to
Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
When are excisable fuel products subject to remission without application?Excisable fuel products, to which items 10 and 15 of the excise tariff apply, are subject to full remission without application when they are for official use but not for trade by: 
- the Governor-General or any member of the Governor-General's family
- State Governors or any member of a State Governor's family
- the Australian American Foundation (Australian-American Fulbright Commission)
- the ANZAC Agency for the Pacific Region of the Commonwealth War Graves Commission, and
- the Government of another country, under an agreement between that Government and the Australian Government.
|If you are not certain whether someone falls into one of these categories, you should contact us by phone on 1300 137 292 .|
|For more information of how the remission applied refer to Section 18.104.22.168 Remission of Excise Duty on LPG and LNG above.|
|You do not have to apply for a remission for LPG and LNG under these circumstances and, if a full remission applies, you do not have to include these products on your excise return.|
CNGCNG is exempt from duty if it was compressed: [162A]
- for use other than as a fuel for a motor vehicle; or
- other than in the course of carrying on an enterprise; or
- for use as a fuel for a motor vehicle designed merely to move goods with a forklift and for use primarily off public roads; or
- at a residential premises; and
- the rate at which the gas was compressed at those premises is not more than 10 kilograms of compressed natural gas per hour; and
- the gas is not sold or otherwise supplied in the course of carrying on an enterprise.
|The phrase 'in the course of carrying on an enterprise' has the same meaning that it has in the A New Tax System (Goods and Services Tax) Act 1999.|
|'Residential premises' has the same meaning that it has in the A New Tax System (Goods and Services Tax) Act 1999.|
LPG and LNGLPG and LNG are exempt from duty if you are a licensed manufacturer and you use the fuel at the premises specified in the licence in the process of manufacturing:
- petroleum condensate or stabilised crude petroleum oil; or
- liquefied petroleum gas, liquefied natural gas or other hydrocarbons. [162B]
|Unless fuel products have been accidentally destroyed, you should contact us before moving or destroying any that are subject to remission or refund. We will provide you with direction and advise if the goods are to be inspected or the destruction supervised.|
|For more information about movement permissions refer to Chapter 5 - Movement permissions .|
|To apply for a remission, send us a completed Excise remission (NAT 4289). You can use the Excise remission instructions (NAT 15769) to help you complete this form.|
|To apply for a refund, send us a completed Excise refund (NAT 4288). You can use the Excise refund instructions (NAT 15771) to help you complete this form. Applications can also be made on company letterhead as long as all the relevant information is provided.|
|For more information about your review rights refer to Chapter 8 - Reviews and objections .|
|For more information about your review rights refer to Chapter 8 - Reviews and objections .|
- phone 1300 137 292
- fax (03) 9285 1168 , or
- write to us at
Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
7.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO REMISSIONS, REFUNDS, DRAWBACKS AND EXEMPTIONS?The following are the penalties that may apply after conviction for an offence. Evade If you evade payment of any duty which is payable, the maximum penalty is 5 times the amount of duty on the excisable fuel products or where a court cannot determine the amount of that duty the penalty is a maximum of 500 units.  False or misleading statements If you make a false or misleading statement, or an omission from a statement in respect of duty payable on particular goods, to us, a penalty not exceeding the sum of 50 penalty units and twice the amount of duty payable on those goods.  Excisable fuel products Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods that are manufactured or produced in Australia and listed in the Schedule to the Excise Tariff Act. As these guidelines deal with fuel products, we have used the term excisable fuel products. Excisable fuel products include:
- renewable diesel
- crude petroleum oil
- heating oil
- fuel ethanol
- compressed natural gas (CNG)
- liquefied natural gas (LNG); and
- liquefied petroleum gas (LPG).
- the volume of excisable fuel products that you have delivered into the Australian domestic market during the period designated on your PSP, or
- the volume of excisable fuel products that you wish to deliver into the Australian domestic market following approval.