Bills Digest No. 185 1997-98
Excise Tariff Amendment Bill (No. 1) 1998
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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Excise Tariff Amendment Bill (No. 1) 1998
Date Introduced: 8 April 1998
House: House of Representatives
Portfolio: Customs and Consumer Affairs
Commencement: The amendments reducing the rate of excise on AVGAS commence
on 3 July 1997 (item 3) and after the commencement of the Excise
Tariff (Fuel Rates Amendments) Act 1997 (items 4 and 5).
The amendments clarifying the classification structure for petroleum products
commence after the commencement of the Excise Tariff (Fuel Rates Amendments)
Act 1997.
The major amendments:
- reduce the rate of excise duty on AVGAS from $0.18003 to $0.17403
per litre; and
- clarify the classification structure for petroleum products.
The major amendments proposed by the Bill can be said to have two effects,
namely, to reduce the rate of excise duty on AVGAS from $0.18003 to $0.17403
per litre, and clarify the classification structure for petroleum products
under item 11 of Schedule 1 of the Excise Tariff Act 1921.
The excise duty on AVGAS assists in recovering Airservices Australia
costs of providing certain services to the aviation sector, including
terminal and navigational services.
While Government information sources are more circumspect in indicating
the source of the proposed reductions in the excise duty payable on AVGAS
proposed by the Bill, Airservices Australia indicates the source to be
the rationalisation of services provided by Airservices Australia.
The Government states in its Explanatory Memorandum to the Bill that:
The reduction results from close scrutiny by Airservices of the forecast
cost of services provided to general aviation and a review of the forecast
level of activity by the general aviation sector in 1997-98.(1)
In Airservices Australia (AA) Annual Report 1996-97, AA states:
[the reduction in duty] is the result of anticipated savings in costs
following the rationalisation of services at a number of General Aviation
Airport Procedures (GAAP) aerodromes.(2)
The proposed clarification of the classification structure for petroleum
products under item 11 of the Schedule to the Excise Tariff Act 1921
relates to a new classification structure for petroleum products introduced
by the Excise Tariff (Fuel Rates Amendments Act 1997. That Act,
which commenced operation on 31 January 1998, amended the Excise Tariff
Act 1921 to define the petroleum products to which a prescribed fuel
marker must be added, prior to their distribution for home consumption.
That Act formed part of a package of 9 Acts aimed at minimising the practice
of avoiding excise duty on transport fuels through the substitution or
unauthorised blending of lower rated petroleum products.
The rationale, as stated by the Minister in the Second Reading Speech
to the Bill, for the clarifying amendments is:
The petroleum industry was consulted at all stages of policy development
and implementation of this package [ie. the package of 9 Acts]. It was
concerned the new structure may create misunderstandings as to how much
excise was payable on some petroleum products intended for particular
uses, particularly products used otherwise than as fuels.
Accordingly, the technical amendments contained in this Bill are designed
to remove any such uncertainty. The amendments insert new subheadings
of "other" in all sub-items of item 11 except sub-item 11(A)
and 11(D), to cover petroleum products used otherwise than as fuel.
The effect of items 3-6 of Schedule 1 of the Bill is to
reduce the excise duty on AVGAS from $0.18003 to $0.17403 per litre.
The amendments proposed by items 7-14 of Schedule 1 of
the Bill are intended to clarify the classification structure for petroleum
products.
1. Excise Tariff Amendment Bill (No. 1) 1998, Explanatory Memorandum,
3.
2. Airservices Australia, Annual Report 1996-97, 35.
Ian Ireland
30 April 1998
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ISSN 1328-8091
© Commonwealth of Australia 1998
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