ATO Interpretative Decision

ATO ID 2007/114 (Withdrawn)

Excise

• This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for fuel purchased before 1 July 2003.
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Issue

Is the Commissioner able to amend an assessment under section 78AE of the Excise Act 1901 (as at 30 June 2003) or section 164AD of the Customs Act 1901 (as at 30 June 2003) where a previous claim for a diesel fuel rebate was disallowed, the taxpayer did not object, and a subsequent court case establishes that the particular activity is eligible for rebate?

Decision

Yes. The Commissioner may amend an assessment where a previous claim for a diesel fuel rebate was disallowed, the taxpayer did not object, and a subsequent court case establishes that the particular activity is eligible for rebate.

Facts

A person lodged a claim for diesel fuel rebate.

The Commissioner disallowed the claim and issued an assessment accordingly.

The person did not object to the assessment.

A subsequent court case involving a different person established that the particular activity to which the person's claim related is eligible for rebate.

The person has requested the Commissioner amend their assessment.

The person's original claim for rebate was lodged less than five years ago.

Reasons for Decision

The following reasons are based on provisions in the Excise Act. The Customs Act contains corresponding provisions, so the rationale and conclusions expressed in regard to the Excise Act are equally applicable to the Customs Act.

The diesel fuel rebate provisions of the Excise Act, which includes section 78AE, were repealed, with effect from 1 July 2003, by the Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003. Item 18 of Schedule 4 to the Energy Grants (Credits) Scheme (Consequential Amendments) Act provides that the diesel fuel rebate provisions continue to apply if a rebate claim was lodged before 1 July 2003. This transitional provision allows the amendment and auditing provisions to continue to apply.

Section 78AE of the Excise Act allows the Commissioner, in certain circumstances, to amend the assessment of a person's rebate entitlement within five years of the client making a diesel fuel rebate application.

Subsection 78AE(4) of the Excise Act provides that the CEO may amend an assessment of rebate payable on a diesel fuel rebate application if:

(a)

an authorised officer conducts an audit under section 78AD in relation to the rebate applied for; and

(b)

having regard to the results of the audit, the CEO is satisfied that the assessment should be amended.

The term 'audit' is not defined in the Excise Act. The Macquarie Dictionary, 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines the noun audit as:

1.

an official examination and verification of accounts and records, especially of financial accounts.

2.

an account or a statement of account.

3.

a calling to account.

In administering the Excise legislation, a person should receive any rebates to which they are entitled and no more. Therefore the purpose of an audit is twofold - on the one hand the Commissioner wishes to ensure rebates have not been paid to which a person is not entitled, and on the other hand, he wishes to ensure that rebates that have been properly claimed, and to which a person is entitled, are paid.

Therefore, when the Commissioner reviews an existing assessment following a request from the client, the Commissioner is in effect undertaking an audit of the assessment. If the Commissioner ascertains that the amount of rebate originally assessed is too low (or too high), the Commissioner is able to amend the assessment under subsection 78AE(4) of the Excise Act.

Subsection 78AE(5) of the Excise Act imposes limits on the Commissioner's ability to amend assessments. Subsection 78AE(5) prevents the Commissioner from amending assessments where a rebate has already been paid and a court or tribunal subsequently decides that the relevant activity is not eligible for a rebate.

However, subsection 78AE(5) of the Excise Act is only applicable where a rebate has already been paid and the Commissioner is seeking to reduce the amount of rebate. Therefore it has no application in these circumstances, as the person is seeking to have their assessment amended to allow a rebate that was previously disallowed.

Accordingly, the Commissioner is able to amend an assessment under section 78AE of the Excise Act or section 164AD of the Customs Act where a previous claim for a diesel fuel rebate was disallowed, the taxpayer did not object, and a subsequent court case establishes that the particular activity is eligible for rebate.

Legislative References:
Customs Act 1901
   section 164AD

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

Keywords
Customs
Diesel
Diesel fuel rebate scheme
Diesel fuel rebates
Excise

Business Line:  Excise

Date of publication:  1 June 2007

ISSN: 1445-2782