Petroleum Excise (Prices) Amendment Regulations 2000 (No. 1) 2000 No. 23
EXPLANATORY STATEMENT
STATUTORY RULES 2000 No. 23
Issued by the authority of the Minister for Industry, Science and Resources
Petroleum Excise (Prices) Act 1987
Petroleum Excise (Prices) Amendment Regulations 2000 (No. 1)
Section 14 of the Petroleum Excise (Prices) Act 1987 (the Act) provides that the Governor-General may make regulations for the purposes of the Act. The Act provides the legislative basis for the calculation of the monthly crude oil excise price base. The purpose of the Act, expressed in Section 7, is to ensure that the crude oil excise is based on the average unit price obtained for crude oil sales by the producers from each excisable crude oil producing region.
The purpose of the Petroleum Excise (Prices) Regulations 1988 (the Principal Regulations) is to provide for the manner in which transaction prices for quantities of crude petroleum oil are to be calculated for the purposes of determining the volume weighted average of realised (VOLWARE) prices for a month and an oil producing region.
As of 1 July 2000 the introduction of the Goods and Service Tax will impose an additional tax component to the 'Price' of domestically marketed crude oil. The Government has decided that secondary taxation would not impose a 'tax on a tax'. The purpose of these new Regulations is to remove the GST added component of the transaction prices and the GST component of eligible deductions from the calculation of the monthly excise price base.
Details of the new Regulations are set out below:
Regulation 1 brings the citation of the Regulations into line with current practices.
Regulations 2, 3 and 4 define the appropriate GST terminology.
Regulations 5 to 11 describe the information that is required to be submitted by the producers to separate the GST component of sales prices and deductions.
Regulations 12 to 14 allow for the exclusion from the excise price base calculation of the GST component from the contract prices and allowable deductions.
The proposed Regulations would commence on commencement of the A New Tax System (Goods and Services Tax) Act 1999. That Act commences on 1 July 2000.
Overview
The Petroleum Excise (Prices) Amendment Regulations 2000 (No. 1) were enacted to address the implications of the introduction of the Goods and Services Tax (GST) on the calculation of the monthly crude oil excise price base. This set of regulations was introduced under the authority of the Minister for Industry, Science and Resources, in accordance with Section 14 of the Petroleum Excise (Prices) Act 1987. The primary policy objective was to ensure that the imposition of the GST on domestically marketed crude oil would not result in a 'tax on a tax', which would otherwise be applied to the excise price base. Consequently, these regulations aimed to refine the calculation methodology by removing the GST component from the transaction prices and eligible deductions used in determining the excise price base. This adjustment was necessary to maintain the integrity of the excise system in light of the new tax landscape introduced by the A New Tax System (Goods and Services Tax) Act 1999.
Scope and Application
The Petroleum Excise (Prices) Amendment Regulations 2000 (No. 1) are subordinate legislation enacted under the Petroleum Excise (Prices) Act 1987. They apply to producers of crude oil within Australia and are aimed at ensuring that the excise imposed on petroleum is calculated accurately, particularly in light of the introduction of the Goods and Services Tax (GST) from 1 July 2000. The regulations are designed to prevent the imposition of secondary taxation by excluding the GST component from the calculation of the monthly excise price base. This is achieved by requiring producers to provide specific information that separates the GST component of sales prices and deductions, and by explicitly excluding this component from the excise price base calculation. These Regulations will commence on the same day as the A New Tax System (Goods and Services Tax) Act 1999, which is 1 July 2000.
Key Provisions
The Petroleum Excise (Prices) Amendment Regulations 2000 (No. 1) (the Regulations) provide amendments to the Petroleum Excise (Prices) Regulations 1988 (Principal Regulations) to adjust for the introduction of the Goods and Services Tax (GST) on 1 July 2000. These changes are primarily focused on ensuring the excise base price calculation for crude oil remains accurate and fair, by removing the GST component from the calculation. Regulation 1 updates the citation of the Regulations to reflect current practices, while Regulations 2, 3, and 4 define relevant GST terminology for clarity and consistency. Regulations 5 to 11 mandate that producers must provide detailed information separating the GST component of sales prices and deductions. Regulations 12 to 14 specifically exclude the GST component from the calculation of the monthly excise price base, ensuring that the excise applied is not compounded by the GST.
The Regulations impose certain obligations on oil producers and entities involved in the sale and production of crude oil. Producers are required to submit detailed information about the GST components of their sales prices and deductions as specified in Regulations 5 to 11. This includes ensuring that the GST component is clearly separated from the other components of the transaction price and eligible deductions. Additionally, these entities must ensure that the GST component is excluded from the excise price base calculation as outlined in Regulations 12 to 14. These obligations are necessary to maintain the integrity of the excise price base calculation and to ensure compliance with the legislative intent of the Petroleum Excise (Prices) Act 1987.
Failure to comply with the requirements set out in the Regulations could result in civil or criminal consequences. While specific penalties are not detailed within the explanatory statement, breaches of regulations made under the Petroleum Excise (Prices) Act 1987 could potentially lead to fines, enforcement actions, or other legal repercussions. The penalties for non-compliance would be determined based on the severity of the breach and the intent behind it. The introduction of the GST component into the excise price base calculation, if not properly managed, could lead to significant financial discrepancies and legal challenges, underscoring the importance of adhering to the stipulated requirements.