ATO Interpretative Decision
ATO ID 2008/85
Excise
PSO: non accredited laboratory and appropriate facilities, resources and expertiseFOI status: may be released
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
What does the Commissioner consider necessary to demonstrate that a laboratory has the appropriate facilities, resources and expertise to conduct the tests necessary for the purposes of the definition of 'independent laboratory' in subregulation 3(1) of he Product Stewardship (Oil) Regulations 2000 (PSO Regulations)?
Decision
The Commissioner considers a laboratory that has the following elements demonstrates that it has the appropriate facilities, resources and expertise to conduct tests necessary for the purposes of the definition of 'independent laboratory' in subregulation 3(1) of the PSO Regulations:
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- uses appropriate up-to-date equipment;
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- oil samples are tested by sound and recognised test methods;
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- testing is conducted by a person who is qualified and has the appropriate training to conduct the relevant and recognised tests;
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- test results are analysed by a qualified person who has the experience to accurately analyse and record the results;
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- there are appropriate staffing levels and appropriate staff supervision; and
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- employs effective quality control procedures for conducting the tests and for recording and reporting the test results.
Facts
A recycler of used oil engages two laboratories to test a sample of oil that the recycler has processed. The laboratories tested the sample against the criteria in Schedule 1 to the PSO Regulations.
Laboratory A conducts the test to determine the mutagenicity index of the oil using the Modified Ames Test. The test is conducted by specialists that are qualified, appropriately trained and experienced in microbiological analysis.
Laboratory B conducts tests to determine if the sample meets the criterion in items 2 to 7 in Schedule 1 to the PSO Regulations. This laboratory is experienced in testing petroleum liquid fuels and lubricant analysis.
Reasons for Decision
Subregulation 4(3) of the PSO Regulations provides that for a benefit under item 1 in the table of subregulation 4(1) of the PSO Regulations, the re-refined base oil must be tested by an independent laboratory against the criteria in Schedule 1 to the PSO Regulations (Schedule 1).
Included in the definition of an 'independent laboratory' in subregulation 3(1) of the PSO Regulations is the requirement that the laboratory has the 'appropriate facilities, resources and expertise to conduct the tests necessary for the purposes of Schedule 1'.
A criterion in Schedule 1 stipulates that the oil must be non-carcinogenic, demonstrated by having a prescribed mutagenicity index using the Modified Ames Test. The Modified Ames Test relies on analysing bacterial growth. Therefore the Commissioner considers that a person conducting the Modified Ames Test must be qualified, appropriately trained and experienced in microbiological analysis to accurately analyse and record the test results.
Schedule 1 also stipulates that the oil must be tested to establish the levels of:
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- poly-aromatic hydrocarbons
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- polychlorinated biphenyls
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- polychlorinated dibenzo-p-dioxins
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- total acid level
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- heavy metals (arsenic, cadmium, chromium and lead) ; and
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- the appearance of the oil.
The person that conducts these tests must be qualified, trained and experienced in conducting tests that provide results to the levels specified in Schedule 1. Therefore the Commissioner considers that the laboratory must be experienced in testing petroleum liquid fuels and lubricant analysis.
However there are other elements of a laboratory that contribute to the production of accurate and reliable test data. These elements include, but are not limited to:
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- using appropriate up-to-date equipment;
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- testing oil samples by sound and recognised test methods;
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- test results are analysed by a qualified person that is experienced to accurately analyse and record the results;
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- the laboratory has appropriate staffing levels and appropriate staff supervision; and
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- the laboratory employs effective quality control procedures for conducting the testing is conducted by person that is qualified.
Therefore, a laboratory will demonstrate that it has the appropriate facilities, resources and expertise to conduct the tests necessary for the purposes of Schedule 1 where all the above mentioned elements are evident. Further, in relation to testing the mutagenicity index of the oil, the sample is analysed by a qualified, appropriately trained and experienced specialist using the Modified Ames Test. In relation to testing the other criterion in Schedule 1, the laboratory is experienced in testing petroleum liquid fuels and lubricant analysis.
Date of decision: 2 June 2008
Legislative References:
Product Stewardship (Oil) Regulations 2000
subregulation 3(1)
subregulation 4(1)
item 1 of the Table in subregulation 4(1)
subregulation 4(3)
Schedule 1
ATO ID 2008/84
Keywords
Product stewardship oil scheme
PSO base oil
PSO recycling
PSO re-refining
ISSN: 1445-2782