ATO Interpretative Decision
ATO ID 2001/129
Excise
Excise status of biodiesel for use as a fuelFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Whether biodiesel, produced by the transesterification of vegetable oils or animal fats, for use as a fuel is a good on which excise duty is imposed under section 5 of the Excise Tariff Act 1921 (the Act).
Decision
Biodiesel produced by the transesterification of vegetable oils or animal fats for use as a fuel, is not an excisable good that is listed in the Schedule to the Act, and therefore no excise duty is payable provided the biodiesel is not blended with a petroleum product.
Facts
Biodiesel is a product manufactured by the transesterification of vegetable oils or animal fats. It is a clean burning, non-toxic, biodegradable replacement or alternative for petroleum diesel. It is not currently listed as an alternative fuel under the Diesel and Alternative Fuels Grants Scheme.
This form of Biodiesel belongs to a family of fatty acids called methyl esters defined by the medium length C16-18 fatty acid linked chains.
Reasons for Decision:
Goods which are produced or manufactured in Australia and on which excise duty is imposed are called "excisable goods". Section 5 of the Act imposes the duties of excise on the goods, which are described in the Schedule to the Act (the Excise Tariff Schedule).
The rates of duty set out in the Excise Tariff Schedule are set by Parliament.
All products subject to excise duty are listed in the Excise Tariff Schedule. Particular products otherwise covered by a general listing are specifically mentioned where they are non-excisable.
The goods described in the Excise Tariff Schedule fall into three broad categories, being petroleum, alcohol and tobacco.
The Excise Tariff Schedule currently imposes excise only on those fuels derived from petroleum (Items 11 and 12) and also on denatured ethanol for use as a fuel in an internal combustion engine (Item 2R).
Unblended biodiesel, produced by the transesterification of vegetable oils or animal fats is not a fuel derived from petroleum nor is it denatured ethanol. As such, it does not fall into any classification in the Excise Tariff Schedule and is therefore not an excisable good.
Date of decision: 26 July 2001
Legislative References:
Excise Tariff Act 1921
Section 5
Schedule
Item 2R
Item 11
Item 12
ATO ID 2001/128
Keywords
Alternative fuels
Diesel
Excise
Excise Tariff
Fuel
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 26 July 2001 | Original statement |
| 22 October 2003 | Archived |