Excise By-Law - Prescribed Condensate Production Area

Administered by Department of the Treasury

Legislation au F2019L00411 ByLaws Not in force Legislative Instrument

Legislation content

Explanatory Statement

 

Excise By-Law - Prescribed Condensate Production Area

 

General Outline of Instrument

  1. This instrument is made under section 165 of the Excise Act 1901.
  2. This instrument prescribes condensate production areas for the purposes of section 6CA of the Excise Tariff Act 1921 (Excise Tariff Act).
  3. The instrument is a legislative instrument for the purposes of the Legislation Act 2003.
  4. 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.                  Subitem item 21.3 of the Schedule to the Excise Tariff Act imposes a duty of excise on certain condensate to be “Free, or if higher the amount of duty worked out under section 6CA.”

7.                  Section 6CA of the Excise Tariff Act provides that a “Prescribed condensate production area” means “a condensate production area prescribed by by-laws (which, without limiting the generality of the foregoing, may be a relevant accumulation, a well, an oil field or a gas field)”.

8.                  This By-Law is required to prescribe condensate production areas for the purposes of section 6CA of the Excise Tariff Act.

 

What is the effect of this instrument

9.                  This instrument prescribes each condensate production area for the purposes of the definition of the term “prescribed condensate production area” contained in subsection 6CA (1) of the Excise Tariff Act.

10.              By prescribing condensate production areas, this instrument makes condensate produced from those areas subject to a duty of excise to be “Free or if higher the amount of duty worked out under section 6CA” of the Excise Tariff Act.

11.              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

12.              This instrument repeals and replaces Excise By-Law 156 (F2008L04516), registered on 27 November 2008 (previous instrument).

13.              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

14.              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

15.              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 during the two week consultation 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.

16.              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.

17.              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 - Prescribed Condensate Production Area

 

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 instrument prescribes petroleum condensate production areas to enable producers to calculate their liability to excise tariffs.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms as it assists petroleum condensate producers to calculate their liability to excise tariffs. 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 - Prescribed Condensate Production Area is a legislative instrument made under the authority of the Excise Act 1901. Enacted in 2019, this instrument aims to address the need for a clear definition and identification of condensate production areas, as required by section 6CA of the Excise Tariff Act 1921. By prescribing specific areas such as relevant accumulations, wells, oil fields, or gas fields, the By-Law ensures that petroleum condensate produced from these areas is subject to an excise duty, calculated either as a fixed amount or as a percentage based on the duty worked out under section 6CA of the Excise Tariff Act. The instrument was developed following consultation with relevant stakeholders and has been designed to maintain continuity with its predecessor, Excise By-Law 156. The policy objective is to provide a straightforward mechanism for condensate producers to determine their tax obligations, ensuring compliance with excise duties.

Scope and Application

The Excise By-Law - Prescribed Condensate Production Area is a legislative instrument made under section 165 of the Excise Act 1901, which prescribes specific areas for the purpose of determining excise duties on petroleum condensate under the Excise Tariff Act 1921. This instrument applies to entities involved in the production of petroleum condensate within the prescribed areas, thereby subjecting them to the excise duties outlined in the Excise Tariff Act. The geographic reach of this legislation is national, applying across all jurisdictions within Australia. The instrument provides a clear definition of "prescribed condensate production area" under section 6CA of the Excise Tariff Act, which encompasses various locations such as relevant accumulations, wells, oil fields, or gas fields. This instrument replaces the previous Excise By-Law 156, maintaining the same scope and requirements to ensure continuity for entities already complying with the earlier legislation. Additionally, the instrument ensures compliance with the Human Rights (Parliamentary Scrutiny) Act 2011, confirming its compatibility with human rights as it does not impose any human rights implications.

Key Provisions

The Excise By-Law - Prescribed Condensate Production Area (F2019L00411) provides specific definitions and requirements under the Excise Tariff Act 1921, particularly focusing on the designation of areas where petroleum condensate is produced. This by-law, made under section 165 of the Excise Act 1901, is essential for determining the excise duty on condensate produced within prescribed areas, as outlined in section 6CA of the Excise Tariff Act. The by-law defines "Prescribed condensate production area" (section 6CA) as areas such as relevant accumulations, wells, oil fields, or gas fields, which are to be prescribed by by-laws. This definition helps in identifying the areas subject to excise duties on condensate. The obligations under this Act primarily focus on ensuring that entities producing condensate within the prescribed areas comply with the defined terms and the resultant excise duties. Producers must accurately identify and report the areas from which they extract condensate, ensuring they meet the criteria set out in the by-law. This requirement is crucial for calculating the correct excise liability as stipulated under subitem 21.3 of the Schedule to the Excise Tariff Act. Breaches of this by-law can lead to significant consequences. While the explanatory statement does not detail specific penalties, non-compliance with excise duties and the failure to correctly identify and report prescribed condensate production areas can result in legal actions. Such actions could include civil penalties for incorrect reporting or evasion of duties, and potentially criminal charges for deliberate non-compliance. The precise penalties for these offences would be determined in accordance with the Excise Tariff Act 1921 and other relevant legislation.

Legal classification tags

Area of Law
Taxation Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Compliance Obligations
Consultation Requirements

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.