EXPLANATORY STATEMENT
Select Legislative Instrument 2012 No. 189
Issued by authority of the Assistant Treasurer
Excise Act 1901
Excise Amendment Regulation 2012 (No. 2)
Section 164 of the Excise Act 1901 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the amending Regulation is to amend the Excise Regulations 1925 (Principal Regulations) to provide manufacturers and suppliers of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) for non-transport use with extended reporting and payment arrangements for their excise obligations. The excise system is being used to impose an equivalent carbon price on these fuels for one year and excise became payable from 1 July 2012 as part of the Clean Energy Future legislation package.
These arrangements for LPG and LNG businesses were announced in a press release issued by the Assistant Treasurer on 19 June 2012.
Standard excise accounting, reporting and payment arrangements are for weekly accounting with the required reports and payment due before the end of the next business day. The amending Regulation prescribes that manufacturers and suppliers of LPG and LNG for non-transport use will have to account for their excise obligations over a one calendar month period with reporting and payment for each month required on or before the last day of the third following calendar month. These excise accounting, reporting and payment arrangements for manufacturers and suppliers of LPG and LNG for non-transport use will end on 30 June 2013. After this, the carbon price will be applied directly using the carbon pricing mechanism and excise will no longer be used to apply an equivalent carbon price.
The amending Regulation complements recent amendments to the Principal Regulations which imposed excise at an amount equivalent to the carbon price on LPG and LNG for non-transport use.
The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulation operates retrospectively in relation to the excise liabilities incurred by manufacturers and suppliers of LPG and LNG for non-transport use between 1 July 2012 and 30 June 2013.
The retrospective application of the amending Regulation will not adversely affect the rights of suppliers and manufacturers of LPG and LNG for non-transport use as it will extend the accounting period and due payment date. The changes amount to a significant easing of the compliance effort required by these businesses. Without the retrospective application of the changes, manufacturers and suppliers of LPG and LNG for non-transport use will be subject to the standard weekly payment regime for their excise liabilities arising between 1 July 2012 and the commencement of the Regulation. There will be no additional administrative burden as the arrangements use existing systems.
The Government decision to provide these concessions was in response to industry calls for support during the transition period.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Excise Amendment Regulation 2012 (No. 2)
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of the Legislative Instrument is to provide manufacturers and suppliers of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) with a one month accounting period and a further three months to report and pay their excise obligations.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Excise Amendment Regulation 2012 (No. 2) was enacted by the Commonwealth of Australia in response to the need for transitional arrangements for excise reporting and payment for manufacturers and suppliers of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) for non-transport use. This regulation was issued under the authority of the Assistant Treasurer and is a legislative instrument under the Legislative Instruments Act 2003. The regulation was introduced to alleviate the compliance burden on these businesses during the transition period of the carbon pricing mechanism, which began on 1 July 2012 and was set to end on 30 June 2013. The policy objective was to ease the administrative burden by extending the accounting period for excise to one calendar month and providing an additional three months for reporting and payment, thereby responding to industry requests for support. The regulation operates retrospectively to ensure that businesses are not subjected to the standard weekly payment regime during this transition period.
Scope and Application
The Excise Amendment Regulation 2012 (No. 2) applies specifically to manufacturers and suppliers of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) for non-transport use within Australia. It modifies the existing excise reporting and payment obligations under the Excise Act 1901 to accommodate these industries during the implementation of the carbon pricing mechanism. The regulation extends the reporting and payment period from the usual weekly cycle to a monthly cycle, with payments due at the end of the third month following the accounting period. This change is designed to alleviate the compliance burden on LPG and LNG businesses during the transition to the carbon pricing mechanism, which took effect from 1 July 2012 until 30 June 2013. This alteration applies retrospectively to excise liabilities incurred during the specified period and ensures that no additional administrative burden is placed on the businesses as it utilises existing systems. The regulation is a legislative instrument under the Legislative Instruments Act 2003 and is compatible with human rights as it does not engage any of the rights or freedoms outlined in the applicable international instruments.
Key Provisions
The Excise Amendment Regulation 2012 (No. 2) introduces specific provisions that alter the accounting, reporting, and payment obligations for manufacturers and suppliers of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) for non-transport use. Under section 164 of the Excise Act 1901, the Governor-General has the authority to create regulations necessary to implement the Act. This particular regulation extends the accounting period for these entities from the usual weekly requirement to a monthly one. Moreover, it mandates that reporting and payment for each month must be completed by the last day of the third month following the accounting period. These new arrangements are set to conclude on 30 June 2013.
Manufacturers and suppliers of LPG and LNG for non-transport use are now required to account for their excise obligations on a monthly basis, rather than the standard weekly basis. They must report and pay their excise liabilities by the last day of the third calendar month following the accounting period. These extended arrangements are intended to ease the compliance burden on these businesses, particularly during the transition period when excise was used to impose an equivalent carbon price. After 30 June 2013, the carbon price will be applied directly through the carbon pricing mechanism, and excise will no longer be used for this purpose.
Failure to comply with the requirements set out in the Excise Amendment Regulation 2012 (No. 2) may result in penalties or legal consequences. Although the regulation itself does not specify penalties, the underlying Excise Act 1901 outlines various offences and penalties for non-compliance. These can include both civil and criminal penalties, depending on the nature and severity of the breach. The maximum penalties for certain offences can be substantial, reflecting the seriousness with which the law treats non-compliance with excise obligations. Businesses are therefore advised to ensure they adhere to the reporting and payment deadlines to avoid any potential legal repercussions.