EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 320
EXCISE REGULATIONS (AMENDMENT)
Issued by the Authority of the Minister of State for Industry and Commerce.
Section 78 of the Excise Act 1901 provides, amongst other things, for remissions, rebates and refunds of duty in such circumstances as may be prescribed.
Excise Regulation 50 provides circumstances that are prescribed circumstances for the purposes of section 78 of the Excise Act 1901.
The purpose of the attached regulations is to amend Excise Regulation 50 to prescribe a new circumstance for the purposes of section 78 of the Excise Act 1901 so as to provide for an exemption from duties of Excise on fuel oil used as a chemical reductant in the nickel oxide refining process and not in the traditional sense as an energy source.
The Government’s decision to grant this exemption followed representations from Queensland Nickel Pty Ltd that fuel oil used at that company’s Greenvale Nickel Project is used mainly as a chemical reductant in the nickel oxide refining process and not in the traditional sense as an energy source.
The regulations effect this Excise duty exemption by adding a new paragraph in Regulation 50 of the Excise Regulations specifying the conditions to be met before the duty exemption will apply. The exemption is only to apply if the fuel oil is:
(i) delivered for home consumption under a permission pursuant to section 61C of the Excise Act 1901;
(ii) used in the chemical reduction in herreshoff-type roasters of oxides and other compounds of nickel and cobalt in lateritic nickel ore to produce elemental nickel and cobalt; and
(iii) used at a place that is not a natural gas area within the meaning of section 3A of the Liquefied Petroleum Gas (Grants) Act 1980.
Overview
The Excise Regulations (Amendment) Statutory Rules 1984 No. 320 were enacted to address a specific issue identified by Queensland Nickel Pty Ltd, whereby fuel oil used at their Greenvale Nickel Project was primarily employed as a chemical reductant in the nickel oxide refining process rather than being used as a conventional energy source. This legislation amends Excise Regulation 50 under the Excise Act 1901 to introduce a new exemption from excise duties on such fuel oil. The amendment was authorised by the Minister of State for Industry and Commerce, and the policy objective is to provide relief to Queensland Nickel Pty Ltd by exempting them from excise duties on fuel oil used in their specialised refining process. The regulations were enacted by the Parliament of Australia to fill the identified gap in the existing legislative framework.
Scope and Application
The Excise Regulations (Amendment) Statutory Rules 1984 No. 320 amend the Excise Regulations to provide for an exemption from excise duties on fuel oil used as a chemical reductant in the nickel oxide refining process, which is not used in the traditional sense as an energy source. This amendment applies to specific circumstances outlined in the Excise Regulations, aligning with section 78 of the Excise Act 1901, which allows for remissions, rebates, and refunds of duty under prescribed circumstances. The exemption applies to fuel oil delivered for home consumption under a permission pursuant to section 61C of the Excise Act 1901, used in the chemical reduction of oxides and other compounds of nickel and cobalt in lateritic nickel ore to produce elemental nickel and cobalt, and used at a place that is not a natural gas area as defined by the Liquefied Petroleum Gas (Grants) Act 1980. This exemption was enacted following representations from Queensland Nickel Pty Ltd, recognising the unique use of fuel oil in their nickel refining process at the Greenvale Nickel Project.
Key Provisions
The Excise Regulations (Amendment) Statutory Rules 1984 No. 320 primarily concern the amendment of Excise Regulation 50 to introduce a new circumstance for the purposes of section 78 of the Excise Act 1901. This amendment provides an exemption from excise duty on fuel oil when it is used as a chemical reductant in the nickel oxide refining process, rather than as a traditional energy source. The changes are implemented through the addition of a new paragraph to Regulation 50, which specifies the conditions under which the duty exemption will be applicable. According to the new provision, the exemption will only apply if the fuel oil is delivered for home consumption under a permission granted under section 61C of the Excise Act 1901, used in the chemical reduction process of nickel and cobalt oxides in lateritic nickel ore, and used at a location that does not fall within the definition of a natural gas area as per section 3A of the Liquefied Petroleum Gas (Grants) Act 1980.
The Excise Regulations (Amendment) impose specific obligations on entities seeking to avail themselves of the duty exemption. Firstly, they must ensure that the fuel oil is delivered for home consumption, with a permission granted under section 61C of the Excise Act 1901. Secondly, the fuel oil must be used for its intended purpose: the chemical reduction of nickel and cobalt oxides in lateritic nickel ore using herreshoff-type roasters. Lastly, the location where the fuel oil is used must not be classified as a natural gas area under the Liquefied Petroleum Gas (Grants) Act 1980. These conditions must be strictly adhered to in order for the exemption to be valid.
Failure to comply with the conditions outlined in the Excise Regulations (Amendment) can result in various legal consequences. While the specific offences and penalties are not detailed in the explanatory statement, it is reasonable to infer that any breach of the conditions specified in Regulation 50 could lead to a reversion of the duty exemption, resulting in the obligation to pay excise duty on the fuel oil. Additionally, depending on the severity and intent behind the non-compliance, there could be further civil or criminal penalties imposed by relevant authorities. However, the exact nature of these penalties would need to be referred to the primary legislation or other regulatory frameworks for a definitive understanding.