Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2016 (No. 1)

Administered by Department of the Treasury

Legislation au F2016L00133 Not in force Legislative Instrument

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Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1)

 

 

Explanatory Statement

 

 

General Outline of Instrument

  1. This Explanatory Statement is provided in accordance with section 26 of the Legislative Instruments Act 2003.
  2. Under section 65 of the Excise Act 1901 (Excise Act) the CEO may make rules for determining the volume of excisable goods.
  3. This instrument is made under section 65 of the Excise Act.  It provides rules for working out the excisable volume of liquid fuel that is being entered for home consumption, and for the purposes of working out the amount of excise duty payable on such fuel.

 

Repealing of previous instrument

4.        Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2015 (No. 1) - F2015L01732) registered on the 02/11/2015 is repealed on the commencement of this determination.

5.        The new instrument includes directions on the manner of incorporation of the extrinsic materials that are referenced within the determination.

6.        Aside from these updated directions the circumstances set out in the previous determination remain unchanged.

7.        The previous 2015 determination (F2015L01732) replaced Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2011 (No. 1) - F2011L02373 (the original instrument).

8.        Paragraph 8 of the original instrument provided a definition of biodiesel that was mirrored in the Excise Tariff Act 1921 (Tariff Act). The legislative provisions in the Excise Tariff Amendment (Ethanol and Biodiesel) Act 2015 resulted in a new definition for biodiesel in the Tariff Act. Additionally, paragraph 11 of the original instrument contained a reference to subitem 10.11 of the Schedule to the Tariff Act which has been repealed by the above mentioned excise tariff amendment.

9.        The replacement of the original instrument gave effect to the above changes by referring to the new definition of biodiesel in the Tariff Act and deleting from paragraph 11 references to subitem 10.11. In addition, paragraph 12 of the original instrument had been amended to take into account a reference to the Excise (Volume - recycled waste oil) Determination 2006 (No. 2) which will cease on 1 October 2016 due to the sun-setting provisions under the Legislative Instruments Act 2003.  

 

Date of effect

10.    The determination will have effect from the day after it is registered.

 

Effect of this instrument:

11.    The determination specifies the methods available for determining the volume of excisable liquid fuel. The determination also specifies the types of fuel and aggregated clearances as factors that permit the use of a particular method.

12.         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.

 

The rules

13.    The volume of liquid fuel must be determined at the time of delivery for home consumption using one of the permissible methods.

14.    Pursuant to Method 1, a person who has aggregated clearances of liquid transport fuels exceeding 50,000 litres per accounting period must, depending on the type of fuel, use either the American Society for Testing and Materials (ASTM) volume correction factors or the Practical Alcohol Tables. Both available methods are used to convert the volume of fuel at ambient temperature to volume of fuel at 15o Celsius.

Revised computerised software editions of the above measurement standards installed in metering equipment may also be used to calculate the volume of liquid transport fuels in litres at 15 Celsius during dispensation.

Example:  If 1 litre of diesel has a density of 840 kg/m3 at 15o Celsius, then 30,000 litres of diesel at 30o Celsius would need to be adjusted by the volume correction factor of 0.9873 m3 (as per the ASTM Petroleum Measurement Tables) to determine its volume at 15o Celsius.  Application of the relevant factor would result in an adjusted volume of 29,619 litres.  Excise duty is then calculated on 29,619 litres for a person who has aggregated clearances of transport fuels exceeding 50,000 litres per accounting period.

15.    A person who does not have aggregated clearances of liquid transport fuels exceeding 50,000 litres per accounting period and does not have a requirement on their periodic settlement permission to correct to 15º Celsius on all their fuel clearances may either correct the volume of fuel to 15 degrees Celsius (Method 1) or use the measured volume of fuel at ambient temperature (Method 2).

Example:  Following on from the example at paragraph 15 if that person’s aggregated clearances of liquid transport fuels are less than 50,000 litres per accounting period, that person may either correct the volume of fuel to 15o Celsius (i.e. 29,619 litres) or use the measured volume of fuel at ambient temperature (i.e. 30,000 litres).

16.    A person who has clearances of fuels classified to sub-items 10.1, 10.2, 10.3, 10.15, 10.16, 10.25, 10.26, 10.27 and 10.28 of the Schedule to the Tariff Act in any quantity may use either Method 1 or 2.

17.    A person must use one Method for the duration of an accounting period, unless authorised in writing by the CEO to do otherwise.

18.    Aggregated clearances means the volume of liquid fuel delivered for home consumption in an accounting period of 12 months from all excise licensed establishment/s based on historical data or the volume of liquid fuels reasonably expected to be delivered for home consumption in an accounting period if no historical data is available.

19.    The period adopted for the calculation of aggregated clearances is the accounting period adopted for income tax purposes as provided in section 18 of the Income Tax Assessment Act 1936.

20.    Liquid transport fuels are defined as gasoline (including that used in an aircraft), diesel, kerosene (for use in an aircraft), fuel oil, fuel ethanol, biodiesel and blends consisting primarily of gasoline or diesel.

21.    For transport fuels classified as gasoline (including that used in an aircraft), diesel, kerosene (for use in an aircraft), fuel oil, biodiesel and blends consisting primarily of gasoline or diesel, the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors, Volume VIII are used to convert the volume of the fuel to 15° Celsius.

22.    For transport fuels classified as fuel ethanol, the Practical Alcohol Tables are used to convert the volume of the fuel to 15° Celsius.

23.    To convert the volume of the fuel to 15° Celsius a person must use the current edition or any future editions of the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors, Volume VIII and similarly the Practical Alcohol Tables, as they change from time to time.

 

Consultation

24.    Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate.  One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law. 

25.    Because there is no substantive change to the scope of the previous instrument, this instrument is considered to be minor or machinery in nature.

26.    As such, no further consultation has been undertaken in the development of this instrument.

 

 

 

Tim Dyce

Deputy Commissioner of Taxation

17/02/2016

 

Related Rulings/Determinations:

 

Previous Rulings/Determinations:

Excise (Volume of Fuels – Temperature Correction) Determination 2009 (No. 1) – F2009L02547

Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2011 (No. 1) – F2011L02373

Excise (Volume of Liquid Fuels – Temperature Correction) Determination 2015 (No. 1) – F2015L01732

 

 

Subject references:

Excise

Excisable goods

Excise Duty

 

Legislative references:

Excise Act 1901 section 65

Excise Tariff Act 1921 (Schedule)

Legislative Instruments Act 2003 section 26

Income Tax Assessment Act 1936 section 18

 

Case references:

 

Other references:

American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors Volume VIII (at the time of publication this reference is available from http://www.astm.org )

 

Practical Alcohol Tables (PAT) (at the time of publication this reference is available from http://bookshop.europa.eu )

 

 

 

 

 

 

 

 


Statement of Compatibility with Human Rights

 

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1)

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

 

Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) amends and replaces Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2015 (No. 1). The determination provides rules for working out the excisable volume of liquid fuel that is being delivered for home consumption which is then used for the purposes of working out the amount of excise duty payable on such fuel.

 

 

Human rights implications

 

This legislative instrument does not engage any of the applicable rights or freedoms as it is considered to be minor or machinery in nature. It provides greater certainty in relation to excise obligations around the measurement of liquid fuels.

 

Conclusion

 

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) was enacted to provide rules for calculating the excisable volume of liquid fuels for home consumption, thereby determining the excise duty payable on such fuels. This determination was made under section 65 of the Excise Act 1901 and aims to ensure consistency and accuracy in measuring liquid fuels for excise purposes. The instrument replaced the Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2015 (No. 1) and incorporated updates to definitions and references in the Excise Tariff Act 1921. This legislative instrument is considered minor or machinery in nature, and as such, it does not substantially alter existing laws or engage with any human rights issues, thus it is compatible with human rights. The primary objective is to provide clarity and ensure accurate measurement of liquid fuels for excise duty calculation.

Scope and Application

The Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) applies to entities and individuals involved in the sale and distribution of liquid fuels for home consumption in Australia. This includes entities that must calculate the volume of liquid fuel for excise duty purposes under the Excise Act 1901. The determination is particularly relevant for businesses that handle significant volumes of liquid transport fuels, as it specifies the methods for accurately determining the volume of such fuels at a standard temperature of 15° Celsius. The determination applies across Australia and is intended to ensure consistent application of excise duty regulations related to the measurement of liquid fuel volumes. It supersedes the 2015 version, incorporating updates that reflect changes in related legislation, such as the Excise Tariff Amendment (Ethanol and Biodiesel) Act 2015. The 2016 Determination does not introduce substantive changes to the existing framework but provides clearer guidelines and references to updated standards and tables, ensuring compliance with current legislative requirements. The instrument does not specify exclusions or thresholds beyond those implied by the need to correct volume measurements for excise duty purposes.

Key Provisions

The Excise (Volume of Liquid Fuels - Temperature Correction) Determination 2016 (No. 1) under section 65 of the Excise Act 1901 provides detailed rules for calculating the volume of liquid fuels for excise duty purposes, replacing the 2015 version. Specifically, section 13 of the Determination mandates that the volume of liquid fuel must be measured at the time of delivery for home consumption using one of the permissible methods outlined. Section 14 stipulates that for individuals with aggregated clearances exceeding 50,000 litres per accounting period, the American Society for Testing and Materials (ASTM) volume correction factors or the Practical Alcohol Tables must be used to convert the fuel's volume at ambient temperature to the volume at 15° Celsius. This ensures accurate measurement of the fuel volume for duty calculation purposes. Section 15 provides an alternative for those with lower clearances, allowing them to either correct the volume to 15° Celsius or use the measured volume at ambient temperature. Section 16 mandates that a single method must be used consistently throughout an accounting period unless written authorisation is obtained from the CEO. The Determination imposes specific obligations on the parties involved. Section 17 defines "aggregated clearances" as the volume of liquid fuel delivered for home consumption in an accounting period, based on historical data or expected volumes if historical data is unavailable. Section 18 specifies that the accounting period for calculating aggregated clearances is the same as that adopted for income tax purposes under section 18 of the Income Tax Assessment Act 1936. Section 19 clarifies that "liquid transport fuels" include gasoline, diesel, kerosene, fuel oil, fuel ethanol, biodiesel, and their blends. Section 21 requires the use of ASTM Petroleum Measurement Tables Volume Correction Factors, Volume VIII for specific fuel types to convert the volume to 15° Celsius, while section 22 mandates the use of Practical Alcohol Tables for fuel ethanol. There are no specified offences, penalties, or civil/criminal consequences directly associated with breaches of this Determination. However, non-compliance with the methods for determining the volume of liquid fuel could lead to incorrect calculations of excise duty, potentially resulting in financial penalties or legal repercussions under the broader Excise Act 1901. The Determination ensures that the measurement of liquid fuels for excise purposes is accurate and compliant with the relevant standards, thereby maintaining the integrity of the excise duty system.

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