Excise Tariff Amendment Act 2020

Overview

The Excise Tariff Amendment Act 2020 was enacted by the Parliament of Australia to amend the Excise Tariff Act 1921. This Act was introduced to address gaps in the excise duty regime by updating the classification and taxation of certain petroleum-based and synthetic equivalent oils and greases. The policy objective is to ensure that the excise duty accurately reflects the nature and intended use of these goods. The Act commenced on 8 September 2020, the day after it received Royal Assent. The amendments specified in Schedule 1 of the Act modify the classification of goods subject to excise duty, ensuring that the tax is applied appropriately to lubricant and fluid oils, recycled oils and greases, and petroleum-based and synthetic equivalent greases. These changes ensure that the excise duty is correctly levied on goods based on their specific use and composition.

Scope and Application

The Excise Tariff Amendment Act 2020 modifies the Excise Tariff Act 1921 to adjust the excise duties on certain petroleum-based and synthetic equivalent oils and greases. This Act applies to goods that are petroleum-based oils or greases, or their synthetic equivalents, which are entered for home consumption on or after the day the Bill for this Act was introduced into the House of Representatives. The amendments impact a range of goods including petroleum-based oils and greases, as well as synthetic equivalents, and exclude specific items such as diesel, blends of diesel, goods used as fuel, and other prescribed goods. The amendments also specify the excise duty rates for these goods, which are set at $0.085 per litre for oils and $0.085 per kilogram for greases, depending on their intended use. The changes are intended to take effect immediately following Royal Assent, which occurred on 8 September 2020, and are enforced across the Commonwealth of Australia.

Key Provisions

The Excise Tariff Amendment Act 2020 primarily amends the Excise Tariff Act 1921 to adjust the excise tariffs on certain goods. Section 15 of the Excise Tariff Act 1921 is specifically targeted, with amendments being made to items 15 to 15.4. The most significant change involves the replacement of the previous definition of goods subject to excise with a new list that excludes diesel, blends of diesel and other goods, goods for use as a fuel, goods ordinarily used as a fuel, exempt oils and hydraulic fluids, and any other goods prescribed for the purposes of this paragraph. The new list includes petroleum-based oils that are lubricant/fluid/oil products or greases and their synthetic equivalents, with specific tariffs applied. For instance, petroleum-based oils and their synthetic equivalents are subject to a tariff of $0.085 per litre when recycled for use as lubricant/fluid/oil products but not as greases, and $0.085 per kilogram when recycled for use as greases (Schedule 1, items 15.1 to 15.4). The Act imposes clear obligations on entities subject to the excise tariffs. These entities must ensure that they accurately classify the goods they are dealing with to apply the correct tariff. Specifically, they must distinguish between goods that are subject to excise and those that are exempt, such as diesel and blends of diesel, goods used as fuel, and exempt oils and hydraulic fluids. Furthermore, they need to differentiate between petroleum-based and synthetic equivalents of lubricant/fluid/oil products and greases, applying the correct tariff based on the type and intended use of the goods (Schedule 1, items 15 to 15.4). Failure to comply with the new excise tariffs or misclassifying goods can lead to significant consequences. Although the Act does not explicitly detail penalties for non-compliance, breaches of excise laws generally attract penalties under the Excise Act 1901 and the Customs Act 1901. The Excise Act 1901 provides for civil penalties, including financial penalties up to $22,200 for individuals and $111,000 for bodies corporate, along with criminal penalties that may include fines and imprisonment. The Customs Act 1901 also imposes penalties for non-compliance with customs duties, which could include fines and imprisonment for serious or repeated offences. Therefore, entities must ensure strict adherence to the new tariffs to avoid these severe penalties (Excise Act 1901, s 127; Customs Act 1901, s 213).