The Assistant Treasurer, Senator Rod Kemp today announced changes to the Customs Tariff Act 1995 to combat illicit fuel blending activities.
Illicit fuel blending occurs when parties replace petrol used as transport fuel with product which is subject to a lower rate of excise or a lower rate of customs duty.
Fuel blending constitutes excise evasion and disadvantages Australian manufacturers and retailers who comply with excise law. It will not be tolerated by the Government.
The amendments to the Customs Tariff Act 1995 will ensure an excise equivalent duty is imposed on all imported benzene, toluene, xylenes and mixed alkylbenzenes. These products are currently duty free when classified to the chemicals section (Chapter 29) of the Customs Tariff, however, do incur a customs duty equivalent to the excise rate when classified to the fuels section (Chapter 27).
The Australian Customs Service will consult with industry to develop arrangements to ensure that legitimate users of these imported chemicals will not be disadvantaged.
Today’s announcement complements the measures previously announced on 18 October 1999. The Australian Taxation Office will continue to consult with industry to monitor whether any other products are being used for fuel substitution purposes and if any other action is required.
The changes will tackle revenue loss through excise evasion, however it is important that State Fair Trading Ministers ensure that motorists are protected under State consumer protection laws.
States have the responsibility to ensure that when consumers pay for petrol, that is what they get.
The tariff changes will take effect from 10 March 2000 the day after the tabling of the Tariff Proposal.
CANBERRA
6 March 2000
Contacts: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360
Mark Jackson Australian Taxation Office (02) 6216 5400