ATO Interpretative Decision

ATO ID 2005/15 (Withdrawn)

Excise

• This ATO Interpretative Decision is withdrawn from the database because it contains a view in respect of a provision of the Product Stewardship (Oil) Regulations 2000 that doesn't apply after 18 February 2005. This is because the Product Stewardship (Oil) Amendment Regulations 2005 inserted provisions that relate to the issue under discussion. Despite its withdrawal from the database, this ATO Interpretative Decision continues to be a precedential view in respect of decisions up to, and including, 17 February 2005.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is re-refined transformer oil a re-refined base oil for the purposes of the table in sub-regulation 4(1) of the Product Stewardship (Oil) Regulations 2000 (the Regulations)?

Decision

Yes. Re-refined transformer oil is a re-refined base oil for the purposed of the table in sub-regulation 4(1) of the Regulations.

Facts

An entity treats used transformer oil by removing contaminants from the used oil. The treatment involves several separate processes which result in the oil meeting the specifications of new oil.

After processing, the oil is returned to industry in an 'as new' condition for use in its original application.

Reasons for Decision

Subsection 9(1) of the Product Stewardship (Oil) Act 2000 (the PSO Act) provides that an entity is entitled to a product stewardship (oil) benefit for the sale or consumption of recycled oil that they have recycled in Australia.

The amount of benefit payable for certain types of products is specified in the table at subregulation 4(1) of the Regulations. Item 1 of the table refers to 'Re-refined base oil (for use as a lubricant or a hydraulic or transformer oil) that meets the criteria mentioned in Schedule 1'. Item 2 of the table refers to 'Other re-refined base oils'.

The term 'base oil' is not defined in the legislation. However, the word 'oils' is defined in section 6 of the PSO Act as:

...

(a)

petroleum based oils (including lubricant base oils; prepared lubricant additives containing carrier oils; lubricants for engines, gear sets, pumps and bearings; greases; hydraulic fluids; brake fluids; transmission oils; and transformer and heat transfer oils);

(b)

synthetic equivalents of goods covered by paragraph (a);

(c)

any other goods prescribed for the purposes of this definition.

The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines 'base' as ' 4. the principal element or ingredient of anything, considered as its fundamental part'. Thus 'base oils' are those oils refined from crude petroleum oil which form the principle ingredient in lubricants and the other products listed in the definition of 'oils' in section 6 of the PSO Act. The definition also extends to synthetic equivalents and any other goods prescribed for the purposes of section 6.

The specific inclusion of transformer oil in the description of Item 1 of the Table in subregulation 4(1) of the Regulations modifies the meaning of 'base oil' to include transformer oil. Therefore, used transformer oil is a used base oil.

Legislative References:
Product Stewardship (Oil) Act 2000
   section 6
   subsection 9(1)

Other References:
Macquarie Dictionary 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW

Keywords
Product stewardship oil scheme
PSO base oil
PSO recycling
PSO re-refining
PSO thermal cracking

Business Line:  Excise

Date of publication:  14 January 2005

ISSN: 1445-2782