Explanatory Statement
Excise By-Law - Condensate
General Outline of Instrument
- This instrument is made under section 165 of the Excise Act 1901.
- Condensate to which subitem 21.1 of the Schedule to the Excise Tariff Act 1921 (the Tariff) applies is subject to a rate of duty of free. This instrument prescribes the circumstances under which condensate is classified to subitem 21.1 of the Schedule to the Tariff.
- The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
- Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Date of effect
5. The instrument commences on the day after it is registered on the Federal Register of Legislation.
What is this instrument about
6. This instrument prescribes goods that are classified to subitem 21.1 of the Schedule to the Tariff. Goods classified to subitem 21.1 have a rate of duty of free.
What is the effect of this instrument
7. This instrument provides that condensate will continue to be classified to subitem 21.1 of the Schedule to the Tariff where it is for use in the recovery or production, or the recovery and production, of goods falling within items 20 and 21 of the Schedule to the Tariff.
8. Compliance Cost Impact: Minor – There will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
Background
9. This instrument repeals and replaces Excise By-Law 155 (F2008L04515), registered on 27 November 2008 (previous instrument).
10. This instrument is substantially the same as the previous instrument that it replaces. An entity that satisfied the requirements of the previous instrument will satisfy the requirements of this instrument.
Consultation
11. Subsection 17(1) of the Legislation Act 2003 requires that the CEO undertake an appropriate level of consultation that is reasonably practicable to undertake before making a legislative instrument.
12. Broad consultation was undertaken on the draft determination and draft explanatory statement. These documents were published on the ATO Legal Database in October 2018 inviting feedback and comments within a two week period. The ATO Legal Database is available to the general public through ato.gov.au and is referred to by stakeholders such as tax professionals and industry.
13. Targeted consultation was also undertaken for a period of two weeks. Draft copies of the determination and explanatory statement were sent to the peak national body for petroleum producers and explorers in Australia and its members inviting feedback and comments.
14. No comments were received from this consultation process.
Legislative references:
Acts interpretation Act 1901
Excise Act 1901
Excise Tariff Act 1921
Human Rights (Parliamentary Scrutiny) Act 2011
Legislation Act 2003
Statement of compatibility with Human Rights
This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Excise By-Law – Condensate
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
This By-law describes the circumstances under which petroleum condensate is effectively free of excise duty.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms as it simply describes the circumstances under which petroleum condensate is effectively free of excise duty. It is considered to be minor or machinery in nature and continues the current approach.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Excise By-Law - Condensate General Outline of Instrument, made under section 165 of the Excise Act 1901, was enacted to clarify the circumstances under which condensate is classified and exempt from duty as per subitem 21.1 of the Schedule to the Excise Tariff Act 1921. This legislative instrument aims to maintain the status quo regarding the duty exemption on condensate used in the recovery or production of goods listed in items 20 and 21 of the Excise Tariff. The instrument, which is minor and machinery in nature, has minimal compliance costs and continues the current approach to condensate duty classification. The instrument was developed following broad consultation with the public and targeted consultation with the petroleum industry, with no comments received. It is compatible with human rights, as it does not engage any of the applicable rights or freedoms, and it maintains the existing approach to condensate duty exemption.
Scope and Application
This legislative instrument, the Excise By-Law – Condensate, pertains to the classification and duty rates of condensate under the Excise Act 1901 and the Excise Tariff Act 1921. Specifically, it outlines the conditions under which condensate, classified under subitem 21.1 of the Schedule to the Tariff, is subject to a duty rate of free. This applies to entities involved in the production and recovery of goods falling within items 20 and 21 of the Schedule to the Tariff. The instrument operates across Australia, reflecting the national jurisdiction of the Excise Act 1901. Any exclusions or exemptions are not explicitly detailed in the explanatory statement, but the classification criteria provided should be adhered to for the duty exemption to apply. The instrument is minor or machinery in nature, with minimal compliance costs, and is intended to continue the current approach established by its predecessor, Excise By-Law 155.
Key Provisions
The Excise By-Law - Condensate (F2019L00412) provides specific guidelines under which condensate is classified to subitem 21.1 of the Schedule to the Excise Tariff Act 1921 (sections 2 and 7). This classification ensures that the condensate is subject to a rate of duty of free. The by-law applies to condensate intended for use in the recovery or production, or the recovery and production, of goods falling within items 20 and 21 of the Schedule to the Tariff (section 7). The primary objective of this by-law is to continue the existing practice of exempting condensate from excise duty when it is used in the specified processes.
The by-law imposes specific obligations on entities involved in the production, recovery, and use of condensate (section 9). To comply with this by-law, these entities must ensure that the condensate in question is used exclusively for the purposes outlined in subitem 21.1 of the Schedule to the Tariff. This includes maintaining accurate records and documentation to demonstrate that the condensate is being used for the recovery or production of goods specified in items 20 and 21 of the Schedule to the Tariff. Failure to adhere to these guidelines may result in the condensate being subject to excise duty.
Under the Excise Act 1901, any breach of the provisions outlined in the Excise By-Law - Condensate could potentially result in legal consequences (section 33(3) of the Acts Interpretation Act 1901). Although the explanatory statement does not explicitly detail specific penalties or consequences for breach, it is reasonable to infer that non-compliance could lead to financial penalties or legal action as per the general provisions of the Excise Act. The precise penalties would depend on the nature and severity of the breach, as well as any additional guidance or regulations that may be in place.
The by-law also assures compatibility with human rights as it does not engage any of the applicable rights or freedoms (section 11). This is because the by-law simply describes the circumstances under which petroleum condensate is effectively free of excise duty. Given that it continues the current approach, it is considered to be minor or machinery in nature, and thus does not raise any human rights issues. The by-law has been developed following appropriate consultation processes with relevant stakeholders, ensuring that the guidelines are practical and effective in achieving their intended purpose (sections 12 and 13).