Excise guidelines for the fuel industry

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10 FUEL IN THE EXCISE TARIFF

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

10.1 PURPOSE

10.2 INTRODUCTION

10.2.1 WHAT IS FUEL IN THE SCHEDULE TO THE EXCISE TARIFF ACT?

10.2.2 RATES OF DUTY WHEN THE ITEM IS MEASURED BY VOLUME?

10.2.3 CONVERSION OF MEASUREMENT OF LPG

10.2.4 CONVERSION MEASUREMENT OF CNG

10.3 POLICY AND PRACTICE

10.3.1 WHAT IS CLASSIFIED TO ITEM 10?

10.3.2 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 10

10.3.3 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 15

10.4 PROCEDURES

10.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

10.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO THE EXCISE TARIFF?

10.6 TERMS USED

10.7 LEGISLATION (quick reference guide)

10.7.1 Excise Act 1901

10.7.2 Excise Tariff Act 1921

10.7.3 Excise Regulations 1925

10.7.4 Crimes Act 1914

10.1 PURPOSE

This chapter deals with:
  • the items in the Schedule to the Excise Tariff Act that apply to fuels (including biofuels and gaseous) and other petroleum products, oils, greases, hydraulic fluids,
  • what kinds of goods manufactured or produced in Australia are subject to excise
  • the classifications of these products
  • the rates of excise that apply
  • in what circumstances these classifications and rates apply, and
  • penalties that can apply to offences in relation to the Excise Tariff.

10.2 INTRODUCTION

10.2.1 WHAT IS FUEL IN THE SCHEDULE TO THE EXCISE TARIFF ACT?

Fuel is covered by items 10, 15, 20 and 21 (however we are not discussing items 20 or 21 in this guide) of the Schedule to the Excise Tariff Act. All excisable fuel products are classifiable to an item of the Schedule to the Excise Tariff Act, which uses a two-tiered numbering system of items and then subitems. Items in the Schedule to the Excise Tariff Act have a general description (which is also referred to as the preamble) which describes the goods classified to the item. Under this general description are listed specific descriptions (subitems) to include or exclude particular products. For goods to be classified to a subitem, they must first be goods of the kind described in one of the relevant items.
Example 10A Bitumen is excluded from item 10 by paragraph (i) of the item 10 of the Schedule to the Excise Tariff Act. Bitumen is therefore not a 'petroleum product not elsewhere included' under subitem 10.28 of the Schedule to the Excise Tariff Act.
The scope of the subitems may narrow the application of a tariff item in the Schedule to the Excise Tariff Act.
Example 10B Paragraph 10(g) of the Schedule to the Excise Tariff Act refers to blends other than blends covered by subsections 77H(1) or (3) of the Excise Act. Subitem 10.30 of the Schedule to the Excise Tariff Act (which covers all blends other than 3 specific biofuel blends) applies only to blends that can be used as fuel in an internal combustion engine. This further restricts the application of excise to certain blends.

Using imported products

Imported products come under Customs administration and attract customs duty. Imported fuel products can, in certain circumstances, be used in the manufacture of excisable products. This includes blending. The result of this is the creation of an excise liability and, provided the correct Customs requirements and procedures are followed, the extinguishment of the customs duty liability. You should refer to Customs for the import related requirements if you wish to use imported fuel in the manufacture of excisable goods but you still need an excise manufacturer licence. It is common practice for fuel importers to blend imported fuel within Australia. Blending of one or more types of fuel, with or without other substances, within Australia is excise manufacture if it results in a product classifiable to the Schedule to the Excise Tariff Act.

  For more information on excise manufacture refer to Chapter 2 - Licensing: Applications .

Product names and descriptions

Some product names in the Schedule to the Excise Tariff Act are defined in the legislation. The definitions are found in:
  • section 3 of the Excise Tariff Act (e.g. 'biodiesel')
  • the preamble to the Schedule to the Excise Tariff Act ('lubricant/fluid/oil products'), and
  • section 4 of the Excise Act
    • condensate.
    • LPG
Most products however are not specifically defined, and take their meaning according to ordinary usage. Ordinary usage may be determined by physical characteristics, how the products are used or current industry practice. For example:
  • common names for products or product types including 'gasoline', 'diesel', 'white spirit', 'kerosene', 'heating oil', 'transmission oil'
  • common names for chemical compounds including 'benzene', 'toluene'
  • descriptive expressions used in the legislation, including 'denatured ethanol', 'liquid aromatic hydrocarbons', 'stabilised crude petroleum oil'.
Products to which a fuel quality standard applies are excisable even if they do not meet the applicable standard. For example biodiesel made through chemically altering vegetable oils to form mono-alkyl esters is excisable even if it does not meet the fuel quality standard for biodiesel.
Fuel quality standards are made by the Commonwealth department responsible for the administration of the Fuel Quality Standards Act 2000, which provides a legislative framework for setting national fuel quality and fuel quality information standards. [182A] The requirements are in place to reduce the adverse effects of motor vehicle emissions on air quality and human health, and to enable Australia to effectively adopt new vehicle engine and emission control technologies Fuels to which fuel quality standards apply include petrol, diesel and biodiesel.

'For use'

A number of item classifications in the Schedule to the Excise Tariff Act are dependent on the intended use of the goods. The expression 'for use' means the intended end-use of the product at the time the goods were delivered from excise control into the Australian domestic market. This is sometimes referred to as 'delivery into home consumption'.
Example 10C Examples of 'for use' in the Schedule to the Excise Tariff Act:
Subitem 10.6Gasoline for use as fuel in aircraft
Item 15Goods...other than (a) goods for use as a fuel...

Items on your excise return

When you enter a product on your excise return under a classification from the Schedule to the Excise Tariff Act that stipulates a particular use, you must have reasonable grounds for believing the product will be used for that purpose. Where a classification excludes a particular use, you must have reasonable grounds for believing the product will not be used for that purpose. If you deliver goods into the Australian domestic market you need to satisfy yourself that the goods will not be used contrary to the tariff item classification you have entered on your return. You need to keep documentation to substantiate the information you include on your excise return.

  For more information about keeping records refer to Chapter 3 - Licensing: Assessing applications (see Section 3.4.3 - What records do I need to keep?).

10.2.2 Rates of duty when the item is measured by volume

Temperature correction of volume

The volume of fuel products is affected by density and temperature (i.e. the volume increases with temperature). In most instances, where rates of duty refer to volume in litres, you should use 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 ° Celsius.

  For more information on measuring the volume of liquid fuels please refer to Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2011 (No. 1) .
*   Standardised calculations of measured quantities of petroleum fluids, regardless of point of origin, destination or units of measure used by custom or statute, have been adopted by petroleum companies through an international agreement. The result is the Petroleum Measurement Tables Volume Correction Factors, Volume VIII [183] .

Conversion of weight to volume

There are instances when product is invoiced in kilograms and needs to be converted to litres, such as:
  • to record it in stock records, and
  • to include it in your excise return.
  The method used to calculate litres of fuel is the standard conversion of a weight measurement to a liquid measurement which is to divide the weight of the fuel product by its density (corrected to 15 ° C), e.g. 100 kilograms of fuel oil, with a corrected density of 0.94, converts to 106 litres (100 / 0.94 = 106.38).

10.2.3 Conversion of measurement of LPG

If you have a liability for excise duty on transport LPG which was measured in kilograms, and is not measured using volumetric measurement equipment, you can convert the unit of measurement from kilograms to litres by using the conversion rate contained in the Excise Regulations 1925. [183A] If you hold a periodic settlement permission you may be required to use one of the conversions methods included in the Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1) .

  For more information on excise manufacture refer to Chapter 6 - Payment of Duty .
Conversion of unit of measurement in the Excise Regulations
LPG that is measured in kilograms may be converted to litres at the rate of 1 kilogram to 1.885 litres. You may only use this conversion factor when the LPG has not been measured using volumetric measurement equipment. [183B] If you decide to apply a particular unit of measurement for LPG which is used for a particular purpose, you are required to apply that unit of measurement throughout the financial year for all LPG used for that purpose. You may however, seek our permission to use a different unit of measurement during the financial year for that LPG. [183C]
The conversion rate is subject to periodic review to ensure it continues to accurately reflect the physical characteristics of LPG supplied in the Australian market.
Example 10D John's business is licensed for excise purposes. John supplies LPG to wholesale customers who collect the product from John's LPG refinery ('wholesale sales'). In these circumstances, the LPG supplied is measured in tonnes by weighbridge measurement and is not measured using temperature and pressure corrected volumetric measurement equipment. John also separately delivers LPG from his refinery in his own tankers ('tanker deliveries to customers'). In these circumstances, measurement occurs in litres when delivered to clients. John is able to determine duty liability for wholesale sales in kilograms and then convert to litres using the conversion factor. John can measure LPG for duty liability purposes in litres for the tanker deliveries to customers. John is not able to change the measurement unit from kilograms to litres for wholesale sales, or from litres to kilograms for deliveries to customers. If John wishes to change measurement units he can obtain permission from us or wait until the end of the financial year.
Conversion of unit of measurement in the Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1)
You can only use a method contained in the Determination if:
  • you hold a periodic settlement permission (PSP); and
  • the LPG which you deliver into the Australian domestic market is for use as a fuel in an internal combustion engine of a motor vehicle or vessel.
The LPG may be either supplied directly to the vehicle or vessel or used to fill a tank that is connected to the engine. LPG used for this purposes is referred to as 'transport LPG'. [183D] There are three methods for converting the measurement of transport LPG to litres. The method you may use is dependent on the amount of transport LPG you deliver or reasonably expect to deliver into the Australian domestic market in an accounting period.
The accounting period is the same period you use for income tax purposes which generally is from 1 July to 30 June of the following year. You may use a different period if we have given you approval in writing.
Where you deliver or reasonably expect to deliver into the Australian domestic market more than 150,000 litres of transport LPG you must use either Method 1 or 2 for determining the volume of transport LPG. Where you do deliver or reasonably expect to deliver into the Australian domestic market less than 150,000 litres of transport LPG in an accounting period you may use any of the 3 Methods for determining the volume of transport LPG. This is provided it is not a requirement of your periodic settlement permission to use Method 1 or 2. You are required to use the same method of conversion for the transport LPG you deliver in the accounting period unless we have given you the authority, in writing, to use a different method during the period.

The Excise (Volume of LPG - Temperature and Pressure Correction) Determination 2011 (No. 1) is available on our website at

  For more information on excise manufacture refer to Chapter 6 - Payment of Duty .
Method 1 - based on density
The amount of kilograms is converted to litres by either:
  1. the use of a factor based on the measured density of the LPG at ambient temperature corrected to 15o Celsius using the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables for Light Hydrocarbon Liquids - Density range 0.500 to 0.653 Kg/L at 15 ° C; or
  2. the use of the conversion factor stipulated in Regulation 49AAC(1) of the Excise Regulations 1925 [183E]
Example 10E If a quantity of transport LPG delivered into the Australian domestic market has been weighed as having 15.682 tonnes, then the volume of the LPG would be determined by applying the conversion factor 1.885 as stipulated in the Excise Regulations 1925 for every kilogram of transport LPG (unless the person elects to measure the density of the quantity of transport LPG and apply a specific conversion factor). Application of the Excise Regulation factor 1.885 would result in a volume of 29,561 litres. Excise duty is then calculated on 29,561.
Method 2 - based on equilibrium vapour pressure
This method applies the American Petroleum Institute Manual of Petroleum Measurement Standards at Chapter 11.2.2M - Compressibility Factors for Hydrocarbons: 350-637 kg/m 3 Density (15 ° C) and -46 ° C to 60 ° C Metering Temperature. The method corrects the volume of transport LPG that was metered under operating pressure to the corresponding volume at the equilibrium vapour pressure for the metered temperature using the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables for Light Hydrocarbon Liquids - Density Range 0.500 to 0.653 Kg/L at 15 ° C to correct the volume of the transport LPG to 15 ° Celsius.
Example 10F A quantity of transport LPG is dispensed from an LPG tanker which meters an uncorrected volume of 30,000 litres under a pressure of 3000 kilopascals at a temperature of 27.5 ° C. During the delivery, the density and equilibrium vapour pressure of the LPG is also measured (at 27.5 ° C) and shown to be 515 kg/m3 and 510 kilopascals respectively. To determine the corrected volume of LPG delivered, the metered volume would need to be adjusted by the pressure correction factor 1.0121 (as per the API Petroleum Measurement Compressibility Factor Tables for Hydrocarbons: 350-637 kg/m3) to determine the volume at equilibrium vapour pressure and the volume temperature correction factor 0.9675 (as per the ASTM Petroleum Measurement Tables for Light Hydrocarbon Liquids) to determine the volume at 15 ° C. Application of the relevant factors would result in an adjusted volume of 29,367 litres. Excise duty is then calculated on 29,367 litres.
Method 3 - based on ambient temperature and operating pressure
Use the measured volume of fuel at ambient temperature and operating pressure.
Example 10G Following on from Example 10F, if a person's aggregated clearances of transport LPG are less than 150,000 litres per accounting period, and that person delivers transport LPG into the Australian domestic market using uncorrected volumetric measuring equipment, that person may either apply Method 2 and correct the volume of fuel to 15 ° Celsius and equilibrium vapour pressure (i.e. 29,367 litres) or use the uncorrected measured volume of fuel at ambient temperature and operating pressure (i.e. 30,000 litres). If the uncorrected measured volume is used, excise duty is then calculated on 30,000 litres.

10.2.4 Conversion measurement of CNG

If you have a liability to duty for CNG and the quantity of CNG is measured in megajoules you are required to use the conversion rate contained in the Excise Regulation 1925. The conversion rate, as at 1 July 2012, is 1 megojoule of CNG to 0.01893 kilograms of CNG. [183F] The conversion rate is subject to periodic review to ensure it continues to accurately reflect the physical characteristics of CNG supplied in the domestic market.

10.3 POLICY AND PRACTICE

10.3.1 WHAT IS CLASSIFIED TO ITEM 10?

Fuel products and some products which may not generally be considered as fuel are classified to item 10 of the Schedule to the Excise Tariff Act. For example, paragraph 10(d) of the Schedule to the Excise Tariff Act refers to 'liquid hydrocarbon products derived through a recycling, manufacturing or other process'.
  Hydrocarbons are any of a class of compounds containing only hydrogen and carbon atoms in varying ratios, such as methane(CH 4 ); ethylene(C 2 H 4 );   acetylene(C 2 H 2 ); and benzene(C 6 H 6 )
Most hydrocarbon products are derived from petroleum, that is, almost exclusively from crude oil or natural gas production and refining. However, hydrocarbon products can also be derived from non-petroleum sources. For hydrocarbon products derived from non-petroleum sources to be classified to a specific product subitem of the Schedule to the Excise Tariff Act, the product must:
  • have the characteristics of gasoline, kerosene, diesel, liquefied natural gas, compressed natural gas, , heating oil, mineral turpentine or white spirit,
  • have the physical characteristics of 'fuel oil' set out in subsection 3(4) of the Excise Tariff Act,
  • have the physical characteristics of liquefied petroleum gas set out in section 4 of the Excise Act or
  • be a liquid aromatic hydrocarbon consisting principally of benzene, toluene or xylene or a mixture of them.
  Liquid hydrocarbon products may contain minor amounts of other elements and still be classified as a liquid hydrocarbon product.
  "Liquid" hydrocarbons are those that are liquid when they come into existence as a discrete product .
In addition to these hydrocarbon products, item 10 also captures a number of non-hydrocarbon based products. Like any other fuel product, for these non-hydrocarbons to be classified to item 10 they must be specified at both an item and sub-item level. Currently, the following are the two non-hydrocarbon products classified to item 10:
  • goods that have the physical characteristics of 'biodiesel' set out in section 3 of the Excise Tariff Act 1921; and
  • goods that are denatured ethanol for use as a fuel in an internal combustion engine

 

Example 10H Diesel can be produced from used tyres or waste plastic. Though not derived from petroleum, the diesel is classifiable to subitem 10.10 of the Schedule to the Excise Tariff Act.

What is not classified to item 10?

Item 10 of the Schedule to the Excise Tariff Act contains a number of exclusions. These apply to:
  • certain uses of fuel in oil production and refining, including:
    • stabilised crude petroleum oil and condensate for use in the recovery, production, pipeline transportation or refining of petroleum, or as refinery feedstock, and
    • refined or semi-refined liquid petroleum products for use in refining petroleum at a licensed refinery, apart from use as fuel in internal combustion engines
  • goods classified to item 15 of the Schedule to the Excise Tariff Act, and
  • waxes and bitumen.
Other exclusions from item 10 of the Schedule to the Excise Tariff Act are referred to under relevant subitems.

10.3.2 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 10

The information below provides some context around items and subitems included in item 10 of the Schedule to the Excise Tariff Act, grouped according to product type.

Major road transport fuels

Gasoline - other than for use as a fuel in aircraft

The primary use of gasoline is in spark ignition internal combustion engines. Technology is currently available to produce gasoline from natural gas using the gas to liquids (GTL) method.   Gasoline produced in this manner would be classified to subitem 10.5 of the Schedule to the Excise Tariff Act.
Subitem Description of goods Rate of Duty
10.5 Gasoline (other than for use as fuel in aircraft) $0.38143 per litre

Diesel

Diesel is primarily used as the fuel for compression ignition internal combustion engines (diesel engines). Diesel is not specifically defined in the Excise Tariff Act, therefore, we look to the physical characteristics, how the products are used and current industry practice to determine whether a particular product is diesel. Recent developments in technology have meant that hydrocarbon fuels can be manufactured from sources other than crude oil or waste oil. Technology now exists that allows fuel to be manufactured from feed-stocks such as waste plastic, used tyres and general household waste or from the hydrogenation of animal fats or vegetable oils. If the fuel produced from these feedstocks can be used to run a diesel engine and its characteristics are generally in line with diesel then it would be classified to subitem 10.10 of the Schedule to the Excise Tariff Act. Renewable diesel is defined in section 4A of the Energy Grants (Cleaner Fuels) Scheme Act 2004 as liquid fuel manufactured by chemically altering vegetable oils or animal fats through a process of hydrogenation that complies with the diesel fuel standard. However, this definition is not directly relevant from an excise perspective. The Schedule to the   Excise Tariff Act 1921 merely includes subitem 10.10 which pertains to diesel in general. Renewable diesel would be classified to the Schedule under this subitem.
  Renewable diesel is not currently produced in Australia and is never produced as a discrete product. It involves adding vegetable oils and animal fats to the feedstock from which diesel is generally produced.
As with gasoline, diesel can also be produced using GTL technology.
Subitem Description of goods Rate of Duty
10.10 Diesel (other than biodiesel) $0.38143 per litre

Aviation fuels

The major aviation fuels are:
  • aviation gasoline (AVGAS), and
  • aviation kerosene (also known as aviation turbine fuel, AVTUR or Jet A1).
AVGAS is primarily used in small piston-engine aircraft. It is classified to subitem 10.6 of the Schedule to the Excise Tariff Act. [184A] AVTUR is primarily used in large turbine-powered aircraft. It is classified to subitem 10.17 of the Schedule to the Excise Tariff Act. [184B] Historically, the excise duty imposed on aviation gasoline and aviation kerosene was used to fund CASA. [184C] With the implementation of the clean energy measures the excise duty rate on these aviation fuels was adjusted by the amount of notional carbon price put on fuel emissions. The amount imposed in relation to CASA funding remains distinct from the total duty payable. [184D] Effective 1 July 2012 the rate of duty on aviation gasoline and aviation kerosene was amended at subitems 10.6 and 10.17 of the Schedule to the Excise Tariff Act respectively. [184E] From 1 July 2013 the rate of duty on these aviation fuels, referred to as the 'replacement rate', is calculated using the following formula [184F] :
Replacement rate = $0.03556 per litre + the carbon component rate
During the period 1 July 2013 to 30 July 2015 the carbon component rate is fixed. Therefore the rate of duty on aviation gasoline and aviation kerosene for the period 1 July 2012 to 30 June 2015 is as follows:

Aviation gasoline - subitem 10.6

Date of effect CASA levy per litre Plus carbon component rate per litre [184G] Replacement rate per litre
1   July   2012     *$0.08616
1   July   2013 $0.03556 $0.05313 $0.08869
1   July   2014 $0.03556 $0.05588 $0.09144

Aviation kerosene subitem 10.17

Date of effect CASA levy per litre Plus carbon component rate per litre [184H] Replacement rate per litre
1   July   2012     *$0.09536
1   July   2013 $0.03556 $0.06279 $0.09835
1   July   2014 $0.03556 $0.06604 $0.1016
*The rate of duty in column 3 of subitems 10.6 and 10.17. From 1 July 2015 the carbon component rate per litre is worked out using the following formula. Aviation gasoline: Average carbon unit auction price for the substitution day x 0.0022 Aviation kerosene: Average carbon unit auction price for the substitution day x 0.0026 The rate is rounded to 5 decimal places (rounding up if the sixth decimal place is 5 or more). From 1 July 2015 the average carbon unit auction price is based on the preceding six-month average carbon auction price. For subsequent six-month periods, that is, the periods commencing 1 January and 1 July, the average price used will be for the actual six-month period. [184I] We will publish a notice in the Gazette which sets out the replacement rate for each subsequent six-month period. [184J] A copy of the notice is also available on our website.

Biofuels

Bio-fuels are fuels made from renewable and/or organic feedstock. Ethanol and biodiesel are biofuels currently in commercial use in Australia.

Fuel ethanol

Denatured ethanol for use as fuel in an internal combustion engine is classified to subitem 10.20 of the Schedule to the Excise Tariff Act. Ethanol is another term for ethyl alcohol.

Manufacturing fuel ethanol

If you produce ethanol for any purpose you must hold an excise manufacturer licence. If you produce ethanol for fuel and non-fuel applications, your licence must specify this.

  For further information on licensing, see Chapter 2 - Licensing : Applications.

Denaturing

Fuel ethanol is usually denatured by the addition of 1% or more unleaded petrol. However, we will accept other denaturants, provided that they meet the requirements of Excise (Denatured spirits) Determination 2006 (No. 2) which deals specifically with alcoholic beverages. The Explanatory Statement provides information about the background, purpose and operation of this determination.
Subitem Description of goods Rate of Duty
10.20 Denatured ethanol for use as fuel in an internal combustion engine $0.38143 per litre

Fuel ethanol blends

Fuel ethanol is usually blended (primarily with petrol) for use as a fuel in spark ignition engines. In other limited cases denatured ethanol can be used in compression ignition engines. Blends of diesel and ethanol are sometimes referred to as 'Diesohol'. In the Schedule to the Excise Tariff Act there are specific subitems for ethanol blends:
Subitem Description of goods Rate of Duty
10.7 Blends of gasoline and ethanol The amount of duty worked out under section 6G
10.11 Blends of diesel and ethanol The amount of duty worked out under section 6G.

  For further information see discussion on "Calculating duty according to section 6G" of the Excise Tariff Act below.
Blending fuel ethanol with products such as petrol or diesel is excise manufacture, even if all the components of the blend are duty-paid fuels. [185]   The only exception to this rule is where fuel ethanol is incidentally blended with other fuel and there is no intention to manufacture a further fuel ethanol blend.

  Certain blends are exempt of from goods covered by paragraph (g) of item 10 by Excise (Blending exemptions) Determination 2012 (No. 1).
Fuel ethanol/petrol blends are usually named by reference to the percentage of fuel ethanol in the blend. For example, a blend containing 10% fuel ethanol is referred to as 'E10'. A blend containing 85% ethanol is referred to as 'E85'.

Biodiesel

Biodiesel is defined in subsection 3(1) of the Excise Tariff Act as: 'fuel manufactured by chemically altering vegetable oils or animal fats (including recycled oils from these sources) to form mono-alkyl esters.'   Subitem 10.21 of the Schedule to the Excise Tariff Act applies only to products that meet this definition. Therefore, fuel produced from animal fats or vegetable oils by hydrogenation is not biodiesel for the purposes of the Schedule to the Excise Tariff Act. Fuel made from other feedstocks, such as waste plastics, is also not biodiesel.
Subitem Description of goods Rate of Duty
10.21 Biodiesel $0.38143 per litre

Biodiesel manufacture

Biodiesel can be made from the following feedstocks:
  • new or used vegetable oils (e.g. soybean oil, rapeseed/canola oil, cotton seed and mustard seed oils)
  • oils from oil bearing trees (e.g. palm & coconut oil)
  • animal fats (e.g. beef tallow), and
  • waste cooking oils (e.g. used frying oil, grease trap waste).
In general, biodiesel can be manufactured by the following processes:
  • alkali-catalysed transesterification of the feedstock with alcohol
  • direct acid-catalysed esterification of the feedstock with alcohol, or
  • the conversion of the feedstock to fatty acids and then to alkyl esters with acid catalysis.
To make biodiesel, you must be licensed as an excise manufacturer. There is no threshold, or own use exemption from this requirement.

  For further information on licensing, see Chapter 2 - Licensing: Applications .
  Biodiesel is excisable whether or not it meets the fuel quality standard for biodiesel developed by the Commonwealth department [185A] responsible for the administration of the Fuel Quality Standards Act 2000 . Information on the standard may be obtained from the department..
  Biodiesel manufacturers may be eligible to claim the cleaner fuels grant. You must meet the fuel quality standard to be eligible for the cleaner fuels grant.

  More information on the Cleaner fuels grants scheme is available on our website at www.ato.gov.au and refer to Fuel schemes essentials .
Biodiesel blends Biodiesel is often blended with other fuel (primarily diesel) prior to being used by consumers. Blending biodiesel with products such as diesel is excise manufacture, even if all the components of the blend are duty-paid fuels. [186] The only exception to this rule is where biodiesel is incidentally blended with other fuel and there is no intention to manufacture a biodiesel blend.
  The exception is provided by Excise (Blending exemptions) Determination 2012 (No. 1) . The Explanatory Statement explains the purpose and operation of this determination.
Example 10I A trucking company buys fuel and stores it in a tank. On some occasions they buy diesel and on other occasions they buy biodiesel. The tank is not completely emptied before being topped up. There is no intention to make a diesel/biodiesel blend. It is impractical to completely empty the fuel from the tank. This circumstance is incidental blending as covered by the determination. It is not excise manufacture.

Diesel and biodiesel blends

Blends of diesel and biodiesel are covered by subitem 10.12 of the Schedule to the Excise Tariff Act.        
Subitem Description of goods Rate of Duty
10.12 Blends of diesel and biodiesel The amount of duty worked out under section 6G

  For further information see discussion on section 6G of the Excise Tariff Act below.
Diesel/biodiesel blends are usually named by reference to the percentage of biodiesel in the blend. For example, a blend containing 10% biodiesel is referred to as 'B10'. A blend containing 5% biodiesel is referred to as 'B5'.  

Other fuel blends

Fuel blends that do not have their own specific classification are classified to subitem 10.30 of the Schedule to the Excise Tariff Act. For a blend to be classified to this subitem, it must be able to be used as fuel in an internal combustion engine. This is accepted as meaning the blend can be used in an internal combustion engine without causing material damage to an engine within a short period (for example, a day or within 100 kilometres).
Subitem Description of goods Rate of Duty
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

 

Example 10J Diesel and base oil can be blended together to produce a mould release agent that is used in brick manufacture. The blend can be used in internal combustion engines and is classified to subitem 10.30 of the Schedule to the Excise Tariff Act.

 

  A blend which is not a biofuel blend is not classified to subitem 10.30 of the Schedule to the Excise Tariff Act if:
  • it has been used as a solvent and recycled for use again as a solvent by the user [187] . (This is further discussed in Chapter 11 - Blending .)
  • all the components are duty-paid at the same rate (but not where an entity is eligible to claim a fuel tax credit on any of the components) [188]
  • it is a blend of one type of aviation or gaseous fuel where excise or customs duty has been paid on all fuel at different rates and no remission has applied to any of the fuel in the blend
  • it is a blend of LPG and a full or partial remission of excise or customs duty has been applied to all components of the fuel blend because it is intended for non-transport use
  • the blend is exempted by a determination issued under section 77H(3) of the Excise Act 1901 including Excise (Blending exemptions) Determination 2012 (No 1)
  • it is a blend of transport LPG with non-transport LPG where the fuel is intended for non-transport use and one of the following applies
    • it is supplied into a container with a capacity of 210 kilograms or less
    • it is supplied into a tank at a residential premises and the fuel is not for use in carrying on an enterprise
    • it is supplied into a tank for use in a system for supplying LPG to at least two residential premises (whether or not the system also supplies fuel to premises other than residential premises), or
  • the blend is not marketed or sold for use as fuel in an internal combustion engine and it contains products listed in the Schedule in the Fuel Tax (Fuel Blends) Determination 2006 (No. 3) at a concentration equal to or greater than the specified minimum

Calculating duty according to Section 6G of the Excise Tariff Act

The rate of duty applicable to these specified blends is determined in accordance with the method statement in section 6G of the Excise Tariff Act. This method takes account of any duty already paid on the components of the blend. The method for working out the duty payable on these blends is
Step 1 Add up the amount of duty that would be payable on each constituent of the blend that is classified to item 10 of the Schedule to the   Excise Tariff Act 1921  
Step 2 Work out the volume, in litres, of any other constituent of the blend (excluding any water added to the manufacture of the blended goods). [189]  
Step 3 Multiply the result of step 2 by $0.38143.  
Step 4 Total the results of steps 1 and 3.  
Step 5 Subtract from the total any duty paid on a constituent of the blended goods that is classified to item 10 or 15 of the Schedule to the   Excise Tariff Act 1921 .  
If a constituent of the blended goods was imported, and customs duty was paid or payable on the goods, treat that customs duty as if it were excise duty in working out the duty payable. If the rate of excise duty on a constituent of the blended goods would be less than the customs duty paid, use the excise duty rate in working out the duty payable. [189A]

  For more information about fuel blends refer to Chapter 11 - Blending .
 
Example 10K Marvin's Fuel manufactures a B10 blend (10% biodiesel / 90% diesel) using 18,000 litres of underbond diesel and 2,000 litres of duty-paid biodiesel. Marvin's Fuel works out the duty payable on the blend under section 6G as follows:
Step 1 18,000 litres of diesel @ $0.38143 per litre 2,000 litres of biodiesel @ $0.38143 per litre $ 6,865.74 $ 762.86
  Total of step 1 $ 7,628.60
Step 2 Nil  
Step 3 Nil  
Step 4 Total of step 1 and 3 $ 7,628.60
Step 5 Less duty paid -$ 762.86
Duty payable on the blend (to nearest $) $ 6,866.00
 
Example 10L Esther's Fuels manufactures an E10 blend from 18,000 litres of duty-paid gasoline and 2000 litres of duty-paid fuel ethanol.
Step 1 18,000 litres of diesel @ $0.38143 per litre 2,000 litres of fuel ethanol @ $0.38143 per litre $ 6,865.74 $ 762.86
  Total of step 1 $ 7,628.60
Step 2 Nil  
Step 3 Nil  
Step 4 Total of step 1 and 3 $ 7,628.60
Step 5 Less duty paid -$ 7,628.60
Duty payable on the blend (to nearest $) $ 0
Although there is no duty payable on the blend, Esther's Fuels must enter the E10 blend on the excise return (or returns) for the period (or periods) when the blend is delivered into the Australian domestic market as the resultant blend is excisable. This is because, although duty has been paid on all components of the blend, the exemption in section 77H of the Excise Act 1901 does not apply as the blend contains ethanol. All deliveries of excisable goods must be reported on your return.

Burner fuels

Kerosene, heating oil and fuel oil [190] are often described as burner fuels because these products are mainly used in burner applications (e.g. as fuel for heating appliances). They are also capable of being used in other applications, for example, as solvents.
Subitem Description of goods Rate of Duty
10.15 Heating oil $0.38143 per litre
10.16 Kerosene (other than for use as fuel in aircraft) $0.38143 per litre
10.18 Fuel oil $0.38143 per litre

Crude oil and condensate used as fuel

Condensate, stabilised crude oil and topped crude oil are included in item 10 of the Schedule to the Excise Tariff Act when these products are used directly as fuel. Condensate or stabilised crude oil is excluded from item 10 of the Schedule to the Excise Tariff Act when used:
  • in the recovery, production, pipeline transportation or refining of crude oil or condensate, or
  • as refinery feedstock.
  Stabilised crude oil and condensate can attract duty under items 20 and 21 respectively of the Schedule to the Excise Tariff Act and the exclusions above do not apply. [191]
Condensate is a defined term as means:
  1. liquid petroleum; or
  2. a substance:
    1. that is derived from gas associated with oil production; and
    2. that is liquid at standard temperature and pressure.192
Subitem Description of goods Rate of Duty
10.1 Petroleum condensate $0.38143 per litre
Stabilised crude petroleum oil (stabilised crude oil) is produced when crude oil from a well is extracted in, or converted to, a state in which it can be safely stored, transported and further dealt with.
Subitem Description of goods Rate of Duty
10.2 Stabilised crude petroleum oil $0.38143 per litre
Topped crude petroleum oil (topped crude oil) is produced when the more valuable light fractions are removed from crude oil.
Subitem Description of goods Rate of Duty
10.3 Topped crude petroleum oil $0.38143 per litre

Liquefied petroleum gas (LPG)

LPG is defined to include: [192A]
  1. liquid propane; or
  2. liquid mixture of propane and butane
  3. liquid mixture of propane and other hydrocarbons that consists mainly of propane; or
  4. a liquid mixture of propane, butane and other hydrocarbons that consists mainly of propane and butane.
LPG is the generic name for mixtures of light hydrocarbon gas, consisting of mainly propane or propane and butane that have been liquefied through cooling or compression. These gases are produced either directly through the processing of crude oil and natural gas or as a by-product of the petroleum refining process. LPG is generally supplied as a mixture of propane and butane but it can also be supplied as 100 per cent propane. It may also include a small proportion of other hydrocarbons. In addition to being used as a transport fuel, LPG consisting of pure propane only is used for a variety of purposes including commercial and domestic cooking, drying and heating. A partial remission of duty is available where the LPG is supplied for non-transport use. [192B] LPG is exempt of duty when it is used at the premises specified in a manufacture licence in the process of manufacturing:
  • petroleum condensate or stabilised crude petroleum oil; or
  • liquefied petroleum gas, liquefied natural gas or other hydrocarbons. [192C]
This is provided the manufacture of the goods is done in accordance with the manufacturer licence and provided the LPG is not used in an internal combustion engine.

  For more information about the remission of excise duty on LPG supplied for non-transport use refer to Chapter 7 - Remissions, Refunds, Drawbacks & Exemptions
Subitem Description of goods *Rate of Duty
10.19A Liquefied petroleum gas, other than liquefied petroleum gas exempted from excise duty by section 77HB of the Excise Act 1901 1   Dec   2011 to 30   June   2012

$0.025 per litre
1   July   2012 to 30   June   2013

$0.050 per litre
1   July   2013 to 30   June   2014

$0.075 per litre
1   July   2014 to 30   June   2015

$0.100 per litre
1   July   2015 - final rate

$0.125 per litre
*As amended by the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011

Liquefied natural gas (LNG)

LNG is produced from natural gas that is cooled to the point that it condenses to a liquid. LNG is typically exported but is also used as a transport fuel, generally in heavy-duty long range road transport. Duty on LNG is imposed at the point of manufacture. Like other excisable goods, excise duty on LNG is calculated at the prevailing rate at the time the fuel is delivered into the Australian domestic market or payment made, which ever is the earlier. [192D] The excise duty rate is expressed as an amount per kilogram. The rates of duty for LNG will increase annually on 1 July each year until 2015 when the final rate will be applied. The applicable rate is determined on the day the LNG is delivered into the Australian domestic market or the duty is paid whichever is the earlier.
Subitem Description of goods *Rate of Duty
10.19B Liquefied natural gas, other than liquefied natural gas exempted from excise duty by section 77HB of the Excise Act 1901 1   Dec   2011 to 30   June   2012

$0.0522 per kilogram
1   July   2012 to 30   June   2013

$0.1045 per kilogram
1   July   2013 to 30   June   2014

$0.1567 per kilogram
1   July   2014 to 30   June   2015

$0.209 per kilogram
1   July   2015 - final rate

$0.2613 per kilogram
*As amended by the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011 A remission of duty is available where the LNG is either used for a non-transport purpose by a licensed person or holder of a permission under section 61C of the Excise Act 1901, or alternately delivered by a licensed person or holder of a permission under section 61c of the Excise Act 1901 exclusively supplied for non-transport use. [192E] If the LNG is used or delivered:
  • prior to 1 July 2012 a full remission of duty is available;
  • on and after 1 July 2012 a partial remission of duty is available.

  For more information about the remission of excise duty on LPG supplied for non-transport use refer to Chapter 7 - Remissions, Refunds, Drawbacks & Exemptions

Compressed natural gas (CNG)

CNG is produced by compressing natural gas. CNG is used in some bus fleets, street sweepers and garbage collection vehicles. There is no significant use of CNG in passenger motor vehicles in Australia at this stage. CNG is exempt from duty if it was compressed:
  1. for use other than as a fuel for a motor vehicle; or [192G]
  2. other than in the course of carrying on an enterprise; or [192H]
  3. for use as a fuel for a forklift vehicle that is used primarily off public roads; or [192I]
    1. at a residential premises; and
    2. the rate at which the gas can be compressed at those premises is not more than 10 kilograms of compressed natural gas per hour (or if specified, the rate specified in the regulations); and
    3. the gas is not sold or otherwise supplied in the course of carrying on an enterprise. [192J]

The phrase 'in the course of carrying on an enterprise' has the same meaning a when it is used in the A New Tax System (Goods and Services Tax) Act 1999 .

  The term 'residential premises' has the same meaning as given in the A New Tax System (Goods and Services Tax) Act 1999 .
In most instances, the ultimate use of CNG will be known at the time of compression. For instance, CNG will commonly occur directly in the motor vehicle or equipment in which the CNG will be used. Hence, it will be readily established whether the CNG is eligible for exemption. The rates of duty for CNG will increase annually on 1 July each year until 2015 when the final rate will be applied. The applicable rate is determined on the day the CNG is delivered into the Australian domestic market or duty is paid whichever is the earlier.
Subitem Description of goods *Rate of Duty
10.19C Compressed natural gas, other than compressed natural gas exempted from excise duty by section 77HB of the Excise Act 1901 1   Dec   2011 to 30   June   2012

$0.0522 per kilogram 1   July   2012 to 30   June   2013

$0.1045 per kilogram 1   July   2013 to 30   June   2014

$0.1567 per kilogram 1   July   2014 to 30   June   2015

$0.209 per kilogram 1   July   2015 - final rate

$0.2613 per kilogram
*As amended by the Excise Tariff Amendment (Taxation of Alternative Fuels) Act 2011

Liquid aromatic hydrocarbons

Some industrial processes, such as coal coking, waste incineration and some plastics production, results i by-products consisting principally of the aromatic hydrocarbons benzene, toluene and xylene, or mixtures of them. These can be used as fuels. Other substances may be present in these products, but these aromatics must be the principal constituents to be classified to subitem 10.25 of the Schedule to the Excise Tariff Act.
Subitem Description of goods Rate of Duty
10.25 Liquid aromatic hydrocarbons consisting principally of benzene, toluene or xylene or mixtures of them $0.38143 per litre

Mineral turpentine & white spirit

Mineral turpentine and white spirit are very similar and are predominantly used as solvents.
Subitem Description of goods Rate of Duty
10.26 Mineral turpentine $0.38143 per litre
10.27 White spirit $0.38143 per litre

Petroleum products not elsewhere included

Subitem 10.28 of the Schedule to the Excise Tariff Act includes all unblended petroleum products not elsewhere included that fall within the general description of item 10 of the Schedule to the Excise Tariff Act. Products classified to this subitem can be as diverse as lighter fluid, naphtha and recycled waste oil, including waste oil recycled by filtering and dewatering. Recycled waste oil is only classified to this subitem if it cannot be classified elsewhere (e.g. diesel to subitem 10.12 of the Schedule to the Excise Tariff Act; re-refined base oil not for fuel use to subitem 15.2 of the Schedule to the Excise Tariff Act).
Subitem Description of goods Rate of Duty
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

 

  For more information about section 77J refer to Chapter 12 - Solvents .
  Products derived from non-petroleum sources cannot be classified to subitem 10.28 of the Schedule to the Excise Tariff Act.

10.3.3 PRODUCTS CLASSIFIED TO SUBITEMS OF ITEM 15

Lubricating oils and greases, hydraulic fluids and oils used for heat transfer applications in machinery are classified to item 15 of the Schedule to the Excise Tariff Act, including:
  • lubricant base oils
  • prepared lubricant additives containing carrier oils
  • lubricants for engines, gear sets, pumps and bearings
  • hydraulic fluids
  • brake fluids
  • transmission oils
  • transformer and heat transfer oils, and
  • synthetic equivalents of petroleum-based oil and grease products.
ItemDescription of goods
15Goods as follows, other than:
  1. goods for use as a fuel; and
  2. exempt oils and hydraulic fluids
Exempt oils and hydraulic fluids are:
  • food grade white mineral oil
  • polyglycol brake fluids, and
  • aromatic process oils
that meet the specified industry standards [193] . Goods for use as a fuel may be excisable under item 10 of the Schedule to the Excise Tariff Act.  
Example 10M
An oil recycler produces re-refined base oil which can be manufactured into lubricating oil by the addition of suitable additives but can also be used as fuel. The base oil is delivered for use as a fuel. It does not meet industry standards for diesel or another specified product under item 10 of the Schedule to the Excise Tariff Act. The base oil is not classified to item 15 of the Schedule to the Excise Tariff Act. It is classified to subitem 10.28 of the Schedule to the Excise Tariff Act. Duty is payable at $0.38143 per litre.

 

Subitem Description of goods Rate of Duty
15 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

Synthetic equivalents

A synthetic product is equivalent to a petroleum-based (lubricant/fluid/oil) product where it performs the equivalent function of the petroleum based oil. Factors to consider include indicated use and marketing.
Example 10N
Synthetic lubricating oil is designed to be used as lubricating oil in an engine. It performs the same function as petroleum based lubricating oil. It is therefore the equivalent of petroleum based lubricating oil.
If you are unsure whether the products you produce are subject to excise duty under item 15 of the Schedule to the Excise Tariff Act you can seek specific advice from us.

  For further information, refer to Chapter 8 - Reviews and objections .

10.4 PROCEDURES

10.4.1 WHAT DO I DO IF I NEED MORE INFORMATION?

If you need more information on fuel in the excise tariff contact us as follows:
  • phone 1300 137 292
  • fax ( 03) 9285 1168 , or
  • write to us at

    Australian Taxation Office

    PO Box 3001

    PENRITH NSW 2740
We will ordinarily respond to written information requests within 28 days. If we cannot respond within 28 days, we will contact you within 14 days to obtain more information or negotiate an extended response date.

10.5 WHAT PENALTIES CAN APPLY TO OFFENCES IN RELATION TO THE EXCISE TARIFF?

The following are the penalties that may apply after conviction for an offence.   Manufacture If you manufacture excisable fuel products without a manufacturer licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [194] If you manufacture excisable fuel products contrary to the Excise Act or any conditions specified in your licence, the penalty is a maximum of two years in prison or 500 penalty units. [195] If you manufacture excisable fuel products at premises that are not specified in your licence, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [196] Move, alter or interfere If you move underbond excisable fuel products without approval, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [197] Note: This includes moving underbond excisable fuel products from your premises to any other location or for export. If your movement of underbond excisable fuel products does not comply with the permission to move the underbond excisable fuel products, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [198] If you move, alter or interfere with excisable fuel products that are subject to excise control , without permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [199] Deliver If you deliver excisable fuel products into the Australian domestic market contrary to your permission, the penalty is a maximum of two years in prison or the greater of 500 penalty units and 5 times the amount of duty on the excisable fuel products. [200] Records If you do not keep, retain and produce records in accordance with a direction under section 50 of the Excise Act, the penalty is a maximum of 30 penalty units. Directions If you do not comply with a direction in regard to what parts of the factory can be used for various matters, the penalty is a maximum of 10 penalty units. [201] 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. [202] 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 penalty units. [203] Facilities etc. If you do not provide all reasonable facilities for enabling us to exercise our powers under the Excise Act, the penalty is a maximum of 10 penalty units. [204] If you do not provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into and all excisable fuel products manufactured in your factory, and for taking stock of all material and excisable fuel products contained in your factory, the maximum penalty is 10 penalty units. [205] If we mark or seal excisable fuel products or fasten, lock or seal any plant in your factory and you alter, open, break or erase the mark, seal, fastening or lock, the maximum penalty is 50 penalty units. [206]

10.6 TERMS USED

Deliver into the Australian domestic market [207]

'Deliver into the Australian domestic market' is the term we use in this manual for when excisable fuel products are released into domestic consumption. The term used in the legislation is 'deliver for home consumption'. Normally this will be by delivering the goods away from licensed premises but includes using those goods within the licensed premises (for example using fuel to run equipment in your licensed premises). It does not include goods delivered for export or the movement of goods underbond (see definition below) to another licensed site. The term 'home consumption' is not defined in the Excise Act and there is no definitive case law that looks at the issue in question. However there are several cases where issues closely related to it are considered. [208] The conclusion drawn from those cases is that 'home consumption' refers to the destination of goods as being within Australia as opposed to exporting them. Excisable fuel products Excisable goods are goods on which excise duty is imposed. Excise duty is imposed on goods listed in the Schedule to the Excise Tariff Act and 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:
  • petrol
  • diesel
  • renewable diesel
  • stabilised crude petroleum oil
  • petroleum condensate
  • heating oil
  • kerosene
  • fuel ethanol
  • biodiesel
  • compressed natural gas (CNG)
  • liquefied natural gas (LNG); and
  • liquefied petroleum gas (LPG).
While oils and grease classified to item 15 are not technically fuel we have included them in this generic term in this guide. This manual does not cover stabilised crude petroleum oil or condensate classified to items 20 and 21 respectively in the Schedule of the Excise Tariff Act 1921. Excise control Goods are subject to excise control from the point of manufacture until they have been delivered into the Australian domestic market or for export. Goods subject to excise control cannot be moved, altered or interfered with except as authorised by the Excise Act. Excise return An excise return [209] is the document that you use to advise us:
  • 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.
Penalty units A penalty unit is specified in section 4AA of the Crimes Act 1914 and, at the time of writing, is $110. Section 50 direction This is a written instruction issued under section 50 of the Excise Act to a licensed manufacturer, or proprietor of licensed premises, to keep specified records, furnish specified returns, retain records for a specified period and produce those records on demand by us. Underbond This is an expression not found in excise legislation but it is widely used to describe goods that are subject to excise control. Excisable goods that are subject to excise control are commonly referred to as 'underbond goods' or as being 'underbond'. This includes goods that have not yet been delivered into the Australian domestic market and goods moving between premises under a movement permission.

10.7 LEGISLATION (quick reference guide)

In this chapter we have referred to the following legislation:

10.7.1 Excise Act 1901

Section 4 - Definitions Section 24 - Excisable goods and goods liable to duties of Customs may be used in manufacturing excisable goods Section 25 - Only licensed manufacturers to manufacture excisable goods Section 26 - Licensed manufacturers to manufacture in accordance with Act and licence Section 27 - Licensed manufacturers to manufacture only at licensed premises Section 49 - Facilities to officers Section 50 - Record keeping Section 51 - Collector may give directions Section 52 - Weights and scales Section 58 - Entry for home consumption etc. Section 59 - Payment of duty Section 61 - Control of excisable goods Section 61A - Permission to remove goods that are subject to CEO's control Section 61C - Permission to deliver certain goods for home consumption without entry Section 77H - Blending exemptions Section 77HA - Compressed natural gas that is exempt from excise duty Section 77HB - Liquefied petroleum gas and liquefied natural gas that is exempt from excise duty Section 77J - Goods that are not covered by subitem 10.25, 10.26, 10.27, 10.28 or 10.30 Section 77K - Crude oil and condensate may attract more than one excise duty Section 92 - Seals etc. not to be broken Section 117A - Unlawfully moving excisable goods Section 117B - Unlawfully selling excisable goods Section 120 - Offences

10.7.2 Excise Tariff Act 1921

Section 3 - Definitions Section 6FA - changes in rate of duty on gasoline for use as fuel in aircraft Section 6FB - Changes in rate of kerosene for use as a fuel in aircraft Section 6FC - Publication of replacement rates for aircraft fuel Section 6G - Duty payable on blended goods Schedule item 10(j) - - Goods covered by 77HA or 77HB of the Excise Act 1901

10.7.3 Excise Regulations 1925

Regulation 49AAC - Conversion of measurements of LPG and compressed natural gas

10.7.4 Crimes Act 1914

Section 4AA - Penalty units
Excise guidelines for the fuel industry
  Date: Version:
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  1 April 2015 Updated document
  12 July 2017 Updated document
  11 December 2017 Updated document
  4 June 2021 Current document

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