Bills Digest No. 149 2003-04
Customs Tariff Amendment (Fuels) Bill 2004
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Customs Tariff Amendment (Fuels) Bill 2004
Date Introduced: 1 April 2004
House: House of Representatives
Portfolio: Justice and Customs
Commencement: The individual parts of the Customs Tariff Amendment
(Fuels) Bill 2004 have various commencement dates which are indicated
in the Main Provisions section of this Bills Digest.
The Customs Tariff Amendment (Fuels)
Bill 2004 (the Bill) proposes the following changes to the Customs
Tariff Act 1995:
-
The implementation of a different customs duty rate for ultra low
sulfur diesel (ULSD) and high sulfur diesel (HSD),
-
An increase of the customs duty rate on aviation fuel to provide
additional funding to the Civil Aviation Safety Authority,
-
The imposition of a customs duty on biodiesel, bringing this currently
untaxed fuel into the existing customs and excise duty system.
See the comments in relation to the distinction between ULSD
and HSD, the introduced rate on aviation fuels and the imposition of a
duty on Biodiesel in the Bills Digest for the Excise Tariff Amendment
(Fuels) Bill 2004.(1)
Item 1 to Item 10 imposes customs duties for diesel and
other fuels such as kerosene or heating oil, with the customs duty rate
to be determined by reference to the sulfur content of the fuel.
From 1 July 2003, the proposed amendment increased the customs duty rate
for fuels with a sulfur content above 50 parts per million (“ppm”) by
one cent, from $0.38143 to $0.39143 per litre. From 1 January 2004, the
proposed amendments increased the customs duty rate for fuels exceeding
the 50 ppm threshold by a further one cent, from $0.39143 per litre to
$0.40143 per litre. The customs duty for diesel fuels with a sulphur content
of 50 ppm of sulphur or below, is $0.38143 per litre
ULSD and the Singapore Australia
Free Trade Agreement (Part 2, Schedule 1)
Part 2 of Schedule 1 of the Bill applies the different customs duty rates
for ULSD and high sulfur diesel to products imported from Singapore, which
are not subject to the Singapore Australia Free Trade Agreement
(“the SAFTA”). This part has taken effect on 28 July 2003, the day the
SAFTA took effect in Australia.
Part 3, Schedule 1 of the Bill increases the customs duty rate for aviation
fuels. This part took effect on 1 July 2003. Item 32 to Item
37 impose an increased customs duty rate for aviation gasoline and
kerosene of $0.03114 and 0.03151 respectively.
Schedule 4, Part 1 of the Bill applies the increased customs duty rates
to aviation fuels imported from Singapore which are not subject to the
SAFTA. This part has taken effect on 28 July 2003, the day the SAFTA took
effect in Australia.
Part 5 of Schedule 1 of the Bill imposes a customs duty rate for biodiesel.
Note that the Bill applies the new customs duty rates to biodiesel imported
from Singapore which is not subject to the SAFTA.
Item 44, Item 46 and Item 51 provide the definition for
the term ‘biodiesel’. The definition is identical with the definition
proposed for biodiesel under the Excise Duty Amendment (Fuel) Bill 2004.
Item 45 introduces a customs duty rate for pure biodiesel derived
from
-
animal fats and oils and their fractions (subheading 1516.10), and
-
vegetable fats and oils and their fractions (subheading 1516.20).
Oils and fats that are not used as fuel for internal combustion engines
do not attract customs duty. Those products would fall into the category
‘Other’, free of customs duty.
The bill makes provision for biodiesel blends that contain more than
70%, by weight, of other petroleum products. Item 47 to Item
50 cover the following blends:
-
pure biodiesel and, by weight, more than 70%, by weight, of light
petroleum oils and preparations (Item 47).
-
pure biodiesel and, by weight, more than 70%, by weight, of heavy
petroleum oils and preparations (Item 48), and
-
pure biodiesel and, by weight, more than 70%, by weight, of petroleum
oils and preparations that qualify as waste oils (Item 49,
Item 50).
The customs duty imposed upon the pure biodiesel component is $0.38143
per litre. The duty payable for the petroleum product component in the
biodiesel blend is determined in accordance with the sulfur content of
the petroleum product.
| Sulfur
content of the petroleum product |
Customs
duty for the petroleum product |
Date |
| < 50 parts per million |
$0.38143 per litre |
1 July 2003 |
| > 50 parts per million |
$0.39143 per litre |
1 July 2003 |
| > 50 parts per million |
$0.40143 per litre |
1 January 2004 |
Biodiesel blends containing, by weight, less than 70% of other substances,
are caught by Item 52. This item imposes the same regime as set
out above for blends with more than 70%, by weight, of petroleum products.
Part 2 of Schedule 2 of the Bill makes further changes to the customs
duty regime applicable to biodiesel blends where those blends contain
ethanol. As the Customs Tariff Amendment Act (No.1) 2004 has commenced,
this part will take effect from 18 September 2003.
Item 2 to Item 17 make amendments applicable to biodiesel
blends with more than 70%, by weight, of petroleum products that also
contain ethanol. The bill determines $0.38143 per litre as the customs
duty for the ethanol component. The incorporation is in line with the
introduction of ethanol as an element into the formulae stipulated in
the Excise Duty Amendment (Fuel) Bill 2004.(2)
Item 18 to Item 21 will effect identical changes to biodiesel
products with less than 70%, by weight, of petroleum products.
See the comments in the Bills Digest for the Excise Tariff Amendment
Bill (Fuels) 2004.
-
See: Bills Digest 149, 2003–04, 'Excise Duty Amendment (Fuel)
Bill 2004', http://www.aph.gov.au/library/pubs/bd/2003-04/04bd149.pdf.
-
See: Bills Digest 149, 2003–04, 'Excise Duty Amendment (Fuel)
Bill 2004', http://www.aph.gov.au/library/pubs/bd/2003-04/04bd149.pdf.
Thomas John
2 June 2004
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2004
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Published by the Parliamentary Library, 2004.
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