Fuel Tax (Revocation) Determination 2006 (No. 1)

Explanatory Statement

Fuel Tax Act 2006

Fuel Tax (Revocation) Determination 2006 (No. 1)

General Outline

1.                Fuel Tax (Revocation) Determination 2006 (No. 1) is made under section 95-5 of the Fuel Tax Act 2006 (Fuel Tax Act). 
2.                The instrument commences in accordance with section 12 of the Legislative Instruments Act 2003.
3.                The instrument revokes Fuel Tax (Fuel Blends) Determination 2006 (No. 2) (Determination No. 2) with effect from the commencement of Fuel Tax Amendment Regulations 2006 (No. 1).

Purpose and effect of the instrument

4.                  The amendments to the Fuel Tax Regulations 2006 (the Regulations) effected by Fuel Tax Amendment Regulations 2006 (No. 1) broaden the range of fuels (including fuel blends) to which the packaging concession in subsection 41-10(2) of the Fuel Tax Act applies.

5.                  As a consequence, all of the fuel blends covered by Determination No. 2 fall within the scope of amended regulation 41-10.

6.                  Determination No. 2 and amended regulation 41-10 have a similar purpose, namely, providing entitlement to a fuel tax credit on certain fuels or fuel blends acquired or manufactured in, or imported into, Australia where the fuel is packaged into containers of 20 litres or less for non-internal combustion engine use.

7.                  If Determination No. 2 were left in place, it could create confusion as to how the packaging concession operates[1]. Specifically, it would be necessary to determine first if a particular fuel blend were covered by Determination No. 2. If not, it could be covered by the Regulations. Having to apply this process increases the burden of compliance and achieves no real benefit as both the determination and the Regulations generally provide for a similar outcome for the fuel blend.  

8.                  For these reasons it is necessary to revoke Determination No. 2.

9.                  The revocation takes effect on the commencement of Fuel Tax Amendment Regulations 2006 (No. 1). This ensures a seamless transition into the revised packaging concession under the Regulations.

Consultation

10.              The explanatory statement to the Fuel Tax Amendment Regulations 2006 (No. 1) describes the consultation undertaken by Treasury in relation to the fuel packaging concessions.

11.              The Tax Office advised Treasury of its intention to revoke Determination No. 2 when it provided comment on the proposed amendments to the Regulations. The Tax Office did not consider it necessary to consult with industry as the revocation is essentially a consequential matter and compliance will be easier under the packaging concession requirements in amended regulation 41-10, which are less onerous than those in Determination No. 2. 

Previous draft:

Related Rulings/Determinations:

Fuel Tax (Fuel Blends) Determination 2006 (No. 2)

Subject references:

Fuel tax

Fuel tax credits

Fuel blending

FTC fuel

FTC blended fuel

Fuel packaging

Legislative references:

Excise Act 1901, subsection 77H(1)

Excise Tariff Act 1921, the Schedule, subitem 10.30

Fuel Tax Act 2006, section 95-5

Fuel Tax Act 2006, subsection 41-10(2)

Fuel Tax Amendment Regulations 2006 (No. 1)

Fuel Tax Regulations 2006, regulation 41-10

Legislative Instruments Act 2003, section 12

Other references:

ATO references  

[1] Due to the fact that blends covered by the Determination are exempt blends and therefore not classified to subitem 10.30 of the Excise tariff: subsection 77H(1) of the Excise Act 1901. Amended reg 41-10 applies to blends that are classified to subitem 10.30.