Excise guidelines for the fuel industry
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06 PAYMENT OF DUTY
|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 duty is payable
- when duty is payable under periodic settlement
- when duty is payable under prepayment of excise duty
- when duty is not payable
- how to work out the amount of duty you're liable to pay, including tariff proposals and quotas
- what to do if you have a dispute as to the duty
- whether you have to account for excisable fuel products
- how to get a Periodic settlement permission (PSP)
- what your PSP will include
- what to do to deliver fuel products into the Australian domestic market
- how to lodge excise returns and pay excise duty
- what to do if you have made an error on your excise return, and
- penalties that can apply to offences in relation to payment of duty.
- into the Australian domestic market , or
- for export to a place outside Australia. 
- payment of the duty
- export of the goods
- remission, or
- use of the goods in the manufacture of other excisable goods.
- a small business entity; [110D] or
- included in a particular class of person or you deliver goods that are of a particular kind [110E] .
|The class of person or particular kind of goods must be prescribed in the Excise Regulations 1925.|
- your name as the holder of the PSP
- the kind of goods to which the PSP applies
- the place from which the goods may be delivered
- the start date of the PSP and whether it is for a seven-day or monthly period; and
- any special requirements of the periodic settlement. [110H]
|For information about your review rights refer to Chapter 8 - Reviews and objections.|
- lodge an excise return, on the first business day following the end of the 7 day period specified in your PSP. (The return details the goods you have delivered into the Australian domestic market during the settlement period).
- at the time you lodge your return, pay any duty owing at the rate applicable when the goods were delivered into the Australian domestic market. [110K]
|A 'business day' is a day that is not a Saturday or Sunday or a public holiday in the place where you lodge your return.|
- you do not have any excise duty to pay, [110N]
- you are a small business entity and have a PSP for a monthly period and have advised us in writing that you cease to meet the requirements of a small business entity, [110O] or
- you are included in a particular class of person and have a PSP for a monthly period and have advised us in writing that you are no longer in the class of person. [110P] .
|You do not need to have an excise licence to have a PSP.|
|Example 6A Buy Me Pty Ltd (Buy Me) does not hold an excise licence and does not qualify as a small business entity. A licensed manufacturer manufactures excisable fuel products for Buy Me under contract. The fuel products are not of a particular class of goods prescribed in the regulations of the Excise Act. Buy Me is also not included in a class of person prescribed in the regulations of the Excise Act. Under the terms of the contract, Buy Me has title to the goods from the time of manufacture and is responsible for paying the excise duty liability. Buy Me applied for, and was granted, a seven-day PSP for the period Tuesday to Monday. Therefore, Buy Me is able to arrange delivery of the excisable fuel products into the Australian domestic market and defer payment of excise duty on those goods, until after the end of period. On the first working day after the end of the period (i.e. Tuesday, unless it is a public holiday in which case it will be due on Wednesday) Buy Me must lodge an excise return for any excisable fuel products delivered during the period and pay the excise duty owing on those goods. We will send Buy Me written confirmation after the excise return has been processed.|
Under prepayment, the duty is paid before the excisable fuel products are delivered into the Australian domestic market. If you do not hold a PSP, you must receive a Delivery authority from us before you are allowed to deliver the quantity of excisable fuel products detailed in the delivery authority into the Australian domestic market. We require you to pay any applicable duty before we give you a Delivery authority . To request a Delivery authority you need to lodge an excise return (NAT4285).
That is, you must:
|You must not deliver excisable fuel products into the Australian domestic market before receiving the Delivery authority .|
- goods are classified to an item or subitem with a FREE rate of duty
- goods are delivered for export
- a full remission circumstance applies, or
- excisable fuel products that are subject to our control are used in the manufacture of other excisable fuel products.
- check whether your fuel products are excisable fuel products according to the Schedule to the Excise Tariff Act  and identify the correct duty rate
- work out the quantity of fuel products subject to duty, in each tariff subitem, that you deliver into the Australian domestic market
- multiply the quantity of fuel products by the rate of duty on the excisable fuel products, and
- add up the total duty payable for each subitem to work out total duty to be paid.
(i) Classifying excisable fuel productsThe Schedule to the Excise Tariff Act (Schedule) lists those goods that, if manufactured or produced in Australia, are subject to excise. The Schedule also contains the rate of duty applicable to the goods. For excisable fuel products the relevant part of the Schedule is as follows:
Description of Goods
Goods as follows:
(a) petroleum condensate and stabilised crude petroleum oil for use otherwise than:
(b) topped crude petroleum oil;
(c) refined or semi-refined liquid products derived from petroleum, other than such products for use (other than in an internal combustion engine) in refining petroleum condensate or stabilised crude petroleum oil;
(d) liquid hydrocarbon products derived through a recycling, manufacturing or other process;
(da) liquefied petroleum gas;
(db) liquefied natural gas;
(dc) compressed natural gas
(e) denatured ethanol for use as fuel in an internal combustion engine;
(g) blends of 1 or more of the above goods (with or without other substances), other than blends covered by subsection 77H (1) or (3) of the Excise Act 1901 ;
but not including the following:
(h) goods classified to item 15;
(i) waxes, liquefied petroleum gas and bitumen
(j) good covered by section 77HA or 77HB or the Excise Act 1901
|10.1||Petroleum condensate||$0.38143 per litre|
|10.2||Stabilised crude petroleum oil||$0.38143 per litre|
|10.3||Topped crude petroleum oil||$0.38143 per litre|
|10.5||Gasoline (other than for use as fuel in aircraft)||$0.38143 per litre|
|10.6||Gasoline for use as fuel in aircraft||$0.08616 per litre|
|10.7||Blends of gasoline and ethanol||The amount of duty worked out under section 6G|
|10.10||Diesel (other than biodiesel)||$0.38143 per litre|
|10.11||Blends of diesel and ethanol||The amount of duty worked out under section 6G|
|10.12||Blends of diesel and biodiesel||The amount of duty worked out under section 6G|
|10.15||Heating oil||$0.38143 per litre|
|10.16||Kerosene (other than for use as fuel in aircraft)||$0.38143 per litre|
|10.17||Kerosene for use as fuel in aircraft||$0.09536 per litre|
|10.18||Fuel oil||$0.38143 per litre|
|10.19A||Liquefied petroleum gas, other than liquefied petroleum gas exempted from excise duty by section 77HB of the Excise Act 1901||$0.05 per litre|
|10.19B||Liquefied natural gas, other than liquefied natural gas exempted fro excise duty by section 77HB of the Excise Act 1901||$0.1045 per kilogram|
|10.19C||Compressed natural gas, other than compressed natural gas exempted from excise duty by section 77HA of the Excise Act 1901||$0.1045 per kilogram|
|10.20||Denatured ethanol for use as fuel in an internal combustion engine||$0.38143 per litre|
|10.21||Biodiesel||$0.38143 per litre|
|10.25||Liquid aromatic hydrocarbons consisting principally of benzene, toluene or xylene or mixtures of them (other than goods covered by section 77J of the Excise Act 1901)||$0.38143 per litre|
|10.26||Mineral turpentine (other than goods covered by section 77J of the Excise Act 1901)||$0.38143 per litre|
|10.27||White spirit (other than goods covered by section 77J of the Excise Act 1901)||$0.38143 per litre|
|10.28||Petroleum products (other than blends) not elsewhere included (other than goods covered by section 77J of the Excise Act 1901)||$0.38143 per litre|
|10.30||Blends of 1 or more of the above goods (with or without other substances) not elsewhere included that can be used as fuel in an internal combustion engine (other than goods covered by section 77J of the
Excise Act 1901)
|The amount of duty worked out under section 6G|
Goods as follows, other than:
(a) goods for use as a fuel; and
(b) exempt oils and hydraulic fluids
|15.1||Petroleum-based oils (including lubricant/fluid/oil products) and their synthetic equivalents but not greases||$0.05449 per litre|
|15.2||Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as oils (including lubricant/fluid/oil products) but not greases||$0.05449 per litre|
|15.3||Petroleum-based greases and their synthetic equivalents||$0.05449 per kilogram|
|15.4||Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as greases||$0.05449 per kilogram|
(ii) Working out quantities of excisable fuel productsWe measure fuel quantity in litres or, in some cases, kilograms. However, the volume of fuel varies with temperature. To work out the liquid fuel quantity for excise duty purposes, the fuel volume is generally measured at a temperature of 15 degrees Celsius, which is an industry standard, and the quantity rounded to the nearest whole litre. The method used to calculate the litres figure is the standard conversion of a weight measurement to a liquid measurement, which is to take the weight and divide it by the density corrected to 15 degrees Celsius. If you are dealing with LPG there are other factors to be considered when determining the volume. These factors can include density and vapour pressure.
|For more information on measuring the volume of liquid fuels please refer to Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No. 1)|
|For more information on measuring the volume of CNG please refer to Excise (Mass of CNG) Determination 2012 (No. 1)|
- record the product in your stock records, and
- include the product on an excise return, for the period in which it is delivered into the Australian domestic market.
|Example 6B 100 kilograms of fuel oil at a density of 0.94 converts to 106 litres:|
|100 / 0.94 = 106.38 rounded to 106 litres|
(iii) Calculating duty payable on each excisable fuel productThe rate of duty is set out in the Schedule to the Excise Tariff Act. The rate of duty you use is the rate contained in the working tariff for the subitem. It will also depend on whether you have a PSP. If you do, it is the rate applicable at the time you deliver the excisable fuel products into the Australian domestic market. If you do not have a PSP, then it is the rate applicable at the time you make the pre-payment. 
|Example 6C When goods are delivered into the Australian domestic market under a PSP, the rate of duty that applies is the rate in force at the time the goods are delivered. On 3 August 2012 a manufacturer delivers diesel under its PSP. The diesel is classified to subitem 10.10 of the Excise tariff. The rate of duty that applies is the rate in force on 3 August 2012 - $0.38143 per litre.|
|Example 6D When goods are delivered into the Australian domestic market under a prepayment arangement, the rate that applies is the rate in force at the time payment is made. On 25 June 2012 a manufacturer that does not hold a PSP prepays duty for a delivery of LPG. The LPG is delivered on 3 July 2012. The LPG is classified to subitem 10.19A of the Excise tariff. The rate of duty that applies is the rate in force on 25 June 2012 - $0.025 per litre not the rate in force when the LPG was delivered ($0.05 per litre).|
|The amount of duty payable on the total quantity of LPG delivered is then calculated by multiplying the quantity of excisable fuel products by the applicable rate of duty.|
|The rates of duty for most fuel products are currently fixed and are not indexed in accordance with increases in the CPI in the same way as alcohol and tobacco. To change the rate would require amending the Excise Tariff Act. An excise tariff proposal could serve to change the rate, but would require subsequent ratification by Parliament. The rate of duty for LPG, LNG and CNG is legislated to increase on 1 July each year until 2015, when the final rate of duty for these goods will be applied.|
|Example 6E 10,000 litres of diesel are delivered into the Australian domestic market on 10 February 2012. The diesel is classified to subitem 10.10 of the Excise tariff and has a duty rate of $0.38143 per litre. Therefore, the duty payable is 10,000 litres x $0.38143 = $3,814.30|
(iv) Calculating total duty payableDuty payments are notified to us by including details on your excise return. Excisable fuel products classified to different items or subitems of the Excise tariff must be shown separately on your excise return on what are referred to as lines.
|Example 6F My Fuel Sales needs to report deliveries for the period ended 10 August 2012. On their excise return, My Fuel Sales reports their deliveries and duty liability as:|
|Line||Tariff item||Quantity||Units||Duty rate||Excise amount|
What happens if the rate changes during my settlement period?If the rates of duty change within your settlement period, you may lodge two excise returns or, alternatively, include separate lines for the same product on one return; that is:
- one return or line for goods delivered under the old rates, and
- one return or line for goods delivered under the new rates.
How can the rate change?The applicable rate of excise duty can also be affected by:
- changes to the Excise Tariff Act (including tariff proposals), or
|Tariff proposals Tariff proposals are a means of changing the Excise Tariff (rates can be adjusted up or down; products can be added or removed). There are specific provisions in the Excise Act that provide for tariff proposals when Parliament is not sitting. Effectively changes to the Excise Tariff can be notified in the Parliament or, if the Parliament is not sitting, by notice in the Gazette. The tariff proposal is required to be validated by an Act within12 months giving retrospective effect to the date of the proposal. You cannot commence proceedings against us for any action taken to collect the amount set by the tariff proposal during the periods specified in section 114 of the Excise Act.  Effectively this means you need to pay in line with a tariff proposal. Any increases in rates or introduction of new products through a tariff proposal technically does not impose excise but we will protect the revenue by collecting amounts in line with the proposal. If an amending Act validating the changes outlined within the tariff proposal is not passed within the prescribed periods, then any additional amounts will be refunded.|
|If you have a periodic settlement permission and you have exceeded your quota then the PSP stops being the authority for you to deliver goods during the declared period.  This means you will need to prepay the duty on any further deliveries into the Australian domestic market during the declared period.|
|For more information about our role in determining and applying quotas refer to Practice Statement Law Administration 2012/3 : The ATO role in determining and applying quotas under the Excise Act 1901|
- the amount of duty
- the rate of duty, or
- the liability of goods to duty (for example, whether the goods are excisable)
- relates to the amount or rate of duty; or
- the liability of the goods to duty; and
- the matter of the objection is also in dispute [120A] .
|Example 6G A licensed manufacturer anticipates manufacturing a new type of excisable good. They seek a private ruling as to the amount of duty that would be payable on the good. They do not accept the amount advised by us in a private ruling and they lodge an objection. Subsequently, they commence manufacture of the excisable goods. They pay the amount of duty that we claimed was payable in the private ruling, and commence an action against us under section 154 of the Excise Act. Their ability to commence an action under section 154 is limited to matters that are not covered under the objection to the private ruling.|
|For more information on private rulings see section 8.5.1 - Private Rulings|
|These disputes do not apply to changes brought about by a tariff proposal.|
|For more information on tariff proposals see section 6.3.5 - How do I work out the amount of duty to pay?|
- the goods are still at your premises
- duty has been paid
- duty was not payable (for example, where a full remission applied), or
- the goods have otherwise been dealt with in accordance with the excise law (for example, moved under a movement permission or included on an excise return at a concessional rate).
- given away for promotional purposes 
- stolen from licensed premises,  or
- delivered into the Australian domestic market under the mistaken belief that they were not excisable. 
|For information about your review rights refer to Chapter 8 - Reviews and objections .|
|Example 6H My Petroleum Wholesalers is asked to account for their excisable fuel products. They carry out a stocktake and find there is a surplus of 100,000 litres of ULP and a shortage of 200,000 litres of diesel. We may allow them to offset the surplus and shortage. Therefore, there are 100,000 litres of diesel that have not been accounted for. A demand will be issued for an amount equal to the excise duty payable on the 100,000 litres. My Petroleum Wholesalers corrects its book stock to take up the surplus stock of 100,000 litres of ULP and, when the demand is paid, write off the shortage of 200,000 litres of diesel.|
|Example 6I Continuing from example 6H, a couple of months later, My Petroleum Wholesalers decides to conduct another stocktake. They find a surplus of 250,000 litres of heating oil and a shortage of 200,000 litres of fuel oil. They decide to offset the surplus and shortage. Therefore, there are no litres that have not been accounted for but there is a surplus of 50,000 litres. My Petroleum Wholesalers corrects its book stock to take up the surplus stock of 250,000 litres of heating oil and write off the shortage of 200,000 litres of fuel oil. They do not need to notify us as there has been no shortage in the payment of the duty. If a shortfall had occurred they would need to contact us before the offsetting could occur.|
What is the out of period adjustment arrangement?There are circumstances in which you may make "out of period" adjustments to your excise liability on your excise return without our prior approval. For example, a periodic settlement permission holder who is eligible for refunds or drawbacks or has underpaid duty in a previous settlement period may be able to use the out of period adjustment arrangement to account for the variations within the current settlement period. Adjustments covered include refund claims, drawback claims and underpayments of duty. An out of period adjustment report must be lodged with the relevant excise return. Before you can make adjustments in this manner you must obtain approval from us.
|For more information about the out of period adjustment system, refer to PS LA 2003/1 : Excise Duty - Reporting and accounting for debit and credit adjustments outside the current reporting period .|
What happens if I return fuel products to underbond stock?Fuel products that have been delivered into the Australian domestic market but returned before the end of the settlement period are not required to be included on the excise return for that period. The product can be returned to underbond stock and treated as though it had never left excise control. The return of fuel to a licensed place in a settlement period after the fuel was delivered, would give rise to a refund or would alternatively be accounted for under an out of period adjustment if we have allowed you to use this arrangement. If you apply for a manufacturer or storage licence, you can use your application form to indicate whether you intend to pay excise duty either periodically or prior to delivery. You do not need to complete a separate PSP application. If you do not have a licence, or you originally chose not to pay excise duty periodically, then you should complete an Application for a continuing movement permission (non-export) (NAT 73712) and forward it to us for assessment. If we approve your PSP, we will notify you in writing within seven days of receiving your request.
|A PSP is not transferable to another person and remains in force until revoked.|
- refuse to grant a PSP
- impose conditions on a PSP, or
- cancel a PSP.
|For information about your review rights refer to Chapter 8 - Reviews and objections .|
|For more information about PSPs, contact us by phoning 1300 137 292.|
- permission to deliver excisable fuel products into the Australian domestic market
- conditions, such as:
- settlement period - the period specified during which goods can be delivered 
- the type of goods that may be delivered from each premises,
- quantity limits (if any)
- when you must pay the duty
- how you must pay - permitted methods (e.g. EFT, cheque, at a Post Office)
- when and how to lodge your excise return
- whether nil returns are required,  and
- record-keeping requirements
- a schedule listing:
- one or more premises from which deliveries may be made.
|Example 6J A PSP specifies a settlement period starting on Saturday and ending on Friday. It states that excise returns must be lodged by 4 pm on the first business day after the end of the settlement period. It also says that the duty payable on deliveries made during the settlement period must be paid at the same time as the excise return is required to be lodged. An excise return must be lodged and the duty paid by 4 pm on the Monday following the end of the settlement period for all goods delivered during the settlement period. When a public holiday falls on a Monday, the excise return is due for lodgement and duty is to be paid by 4 pm on Tuesday, the next business day.|
Delivery under periodic settlement permissionIf we provide you with a PSP, you must take the following steps to deliver excisable fuel products into the Australian domestic market:
- deliver the fuel products into the Australian domestic market: (where delivered in accordance with the permission the products are now no longer subject to excise control)
- complete and submit your excise return in accordance with the timeframes in the permission, and
- pay the duty to us in accordance with the timeframes in the permission.
Delivery after prepaying the excise dutyIf you do not have a PSP, you must take the following steps to deliver excisable fuel products into the Australian domestic market:
- complete and submit your excise return
- pay the duty to us
- obtain a Delivery authority from us, and
- deliver the fuel products into the Australian domestic market.
- fax it to us on 1300 131 456 , or
- post it to
Excise Returns Processing Unit
PO Box 3007
PENRITH NSW 2740.
- by electronic funds transfer, including direct credit and BPAY
- in person at a Post Office, or
- by mail (cheque or money order), the payment must be received by the day and time stated in your PSP.
|If you are required to pay your other tax debts electronically, you must also make your payment for excise duty by electronic funds transfer.|
|We do not accept credit card payments.|
To obtain an
|For more information about completing your excise return refer to the Excise return instructions (NAT 15436).|
|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 was paid. However, this time may be extended to within 12 months of payment depending on your circumstances.|
To obtain an
Amending excise return
|For more information about completing your Amending excise return refer to the excise return instructions (NAT 15772).|
- phone 1300 137 292
- fax (03) 9285 1168 , or
- write to us at
Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
- 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.
|For more information about remissions see Chapter 7 - Remissions, refunds, drawbacks and exemptions.|
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