Excise (Volume – residual oil) Determination 2012 (No. 1)

Excise (Volume – residual oil) Determination 2012 (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 working out the volume or weight of excisable goods.
3.                This instrument is made under section 65 of the Excise Act.  It provides rules for working out the volume of excisable residual oil, classified to sub-item 10.28 of the Schedule to the Excise Tariff Act 1921, which is being delivered for home consumption, and for the purposes of working out the amount of excise duty payable on such fuel.

Date of effect

4.                  The determination will have effect from 10 December 2012.

Effect of this instrument:

5.                  This determination specifies the methods available for determining the volume of excisable residual oil produced and consumed within an excise licensed establishment, by a licensed manufacturer, in the course of refining petroleum condensate or stabilised crude petroleum oil.

6.                  Where a licensed manufacturer consumes residual oil during its own refining operations, the residual oil product will generally not be stored in calibrated tanks or placed into containers which facilitate the measurement of volume. The product may, for example, be stored for a relatively short period in a holding tank or may be fed directly from the remnants of the distillation process into consumption. It is appropriate to use alternative methods for the measuring of volume in such circumstances.

7.                  In these circumstances, the volume of excisable goods may be worked out by using a formula that calculates output on the basis of historical output from similar feedstock or other methods providing comparable degrees of accuracy may be used. The volume determined has to be corrected to 15 degrees Celsius using the American Society for Testing and Materials (ASTM) Petroleum Measurement Tables Volume Correction Factors, Volume VIII.

8.                  While consultation showed that methods such as a properly calibrated flow meters and other measuring devices were not typically used in this situation and hence the need for the Determination, their use would clearly provide acceptable levels of accuracy.

Impact of the instrument

9.                  Compliance cost impact: An assessment of the compliance cost impact indicates that the impact will be minimal for both implementation and on-going compliance costs. The instrument is routine in nature.

Consultation

10.              Consultations on the determination was undertaken by direct contact with affected entities. No comments were received that indicated the proposals in the draft determination should not proceed.

11.              Consultation was undertaken with the Revenue Analysis Branch (RAB) and no monetary, financial or revenue impacts resulting from or associated with this determination were identified.

12.              The Treasury have been consulted and do not have any issue with the determination.

Related Rulings/Determinations:

PS LA 2010/03

FTD 2010/1

Previous Rulings/Determinations:

Subject references:

Excise

Excisable goods

Excise Duty

Legislative references:

Excise Act 1901 section 65

Excise Tariff Act 1921 The 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 (the time of publication this reference is available from www.astm.org)

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 – residual oil) Determination 2012 (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

This legislative instrument specifies methods for measuring excisable residual fuel oil which is produced and consumed within an excise licensed establishment, by a licensed manufacturer, in the course of refining petroleum condensate or stabilised crude petroleum oil.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms.

Conclusion

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