Explanatory Statement
Fuel Tax Act 2006
Fuel Tax (Revocation) Determination 2006 (No. 1)
General Outline
- Fuel Tax (Revocation) Determination 2006 (No. 1) is made under section 95-5 of the Fuel Tax Act 2006 (Fuel Tax Act).
- The instrument commences in accordance with section 12 of the Legislative Instruments Act 2003.
- 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.
Commissioner of Taxation
[14 December 2006]
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.
Overview
The Fuel Tax (Revocation) Determination 2006 (No. 1) was enacted to address confusion and compliance burdens arising from the coexistence of two similar instruments governing fuel tax credits on certain fuels. This instrument, made under section 95-5 of the Fuel Tax Act 2006, revokes the Fuel Tax (Fuel Blends) Determination 2006 (No. 2) to align with amendments introduced by the Fuel Tax Amendment Regulations 2006 (No. 1). The latter regulation expanded the range of fuel blends eligible for a packaging concession under subsection 41-10(2) of the Fuel Tax Act, thereby rendering the older determination redundant. The revocation is intended to streamline compliance processes and reduce any potential confusion, ensuring that the new regulation provides a seamless and less burdensome approach for taxpayers. This determination was enacted by the Commissioner of Taxation and is designed to facilitate easier compliance with the updated fuel tax regulations.
Scope and Application
The Fuel Tax (Revocation) Determination 2006 (No. 1) applies to fuel blends that were previously subject to the Fuel Tax (Fuel Blends) Determination 2006 (No. 2). This determination, made under section 95-5 of the Fuel Tax Act 2006, revokes the earlier determination to ensure consistency and reduce compliance burdens. The revocation aligns with the Fuel Tax Amendment Regulations 2006 (No. 1), which broaden the scope of the packaging concession for fuel tax credits. This instrument operates nationally within Australia, affecting all entities involved in the acquisition, manufacture, or importation of fuel blends packaged into containers of 20 litres or less for non-internal combustion engine use. The revocation aims to eliminate confusion and streamline compliance by integrating the packaging concession under the amended Fuel Tax Regulations 2006.
Key Provisions
The main operative sections of the Fuel Tax (Revocation) Determination 2006 (No. 1) involve the revocation of Fuel Tax (Fuel Blends) Determination 2006 (No. 2) in light of the amendments made to the Fuel Tax Regulations 2006 through the Fuel Tax Amendment Regulations 2006 (No. 1) (section 4). This revocation is intended to streamline the application of the packaging concession provided in subsection 41-10(2) of the Fuel Tax Act 2006, ensuring that all relevant fuel blends are uniformly covered under the updated regulations (section 5). The Determination No. 2 was found to potentially create confusion and add unnecessary compliance burdens, which the new regulations aim to alleviate by providing a similar outcome for fuel blends while being less onerous (sections 6-9).
The Act imposes specific obligations on the parties or entities it governs, primarily concerning the accurate application of the fuel tax credit for certain fuels and blends. These obligations include adhering to the revised packaging concession requirements as outlined in the amended regulation 41-10 (section 5). Entities must ensure that any fuel or fuel blend qualifying for the packaging concession is correctly identified and managed under the new regulatory framework, which simplifies the process compared to the previous Determination No. 2 (section 7).
There are no specific offences, penalties, or civil/criminal consequences detailed in the Fuel Tax (Revocation) Determination 2006 (No. 1) itself. However, non-compliance with the broader Fuel Tax Act 2006 or the amended regulations could lead to penalties. For example, under the Excise Act 1901, failure to comply with excise laws could result in fines and other penalties as stipulated by the relevant legislation (subsection 77H(1)). It is essential for entities to stay updated with the current regulations to avoid any potential penalties associated with non-compliance.