Unlicensed bio-diesel blenders face retrospective fines

By: Graham Gardiner


Unlicensed manufacturers that blend bio-diesel and diesel fuels in depot tanks will soon learn if they face retrospective fines, the

Unlicensed manufacturers that blend bio-diesel and diesel fuels in depot tanks will soon learn if they face retrospective fines, the likes of which may have significant implications for bio-diesel consumption in the transport industry.

The Australian Taxation Office (ATO), during the Fuel Schemes Advisory Forum in March, is due to hand to the Australian Trucking Association (ATA) its review into bio-diesel excise regulations.

The review was commissioned after the ATA raised concerns over laws governing depot tank blending of bio-diesel and diesel fuels.

A briefing paper released by the ATA says the current excise system permits those blending fuels straight into a truck’s fuel tank to do so without charge.

However, it is not clear if operators that blend and store biodiesel in a depot tank are manufacturing an excisable product and whether they must hold an excise licence.

As such, ATA CEO Stuart St Clair says there is uncertainty among the industry when an excise licence is required, which means there is a possibility unlicensed operators may face hefty fines if they are found to be manufacturing an excisable product without a licence. St Clair says fines would range depending on the severity of each case.

Operators could also face retrospective liability fines in regards to fuel tax credits. The briefing paper released by the ATA says uncertainty over current regulations means some operators may be prosecuted for unwarily claiming the wrong fuel tax credit.

Presently there are a number of credit claim entitlements on bio-diesel, diesel and bio-diesel/diesel blends.

To avoid potential liability cases, the ATA wants depot blending of bio-diesel and diesel to be exempted from the excise licensing requirements.

Furthermore, St Clair says current regulations are of particular concern to non-commercial manufacturers. He says the ATO does not distinguish between those that sell blended fuels and those who blend fuel to use themselves. In other words, non-commercial manufacturers face the same excise regulations as those who profit from blending fuels.

St Clair says although the cost of obtaining a licence is rather insignificant, non-commercial manufacturers face "extraordinarily onerous" administration costs such as maintaining complex accounting records.

However, he is quick to point out that the ATA believes it is an "unintended consequence" on the part of the ATO, but one which must be amended.

"It’s an issue that we think is serious," he says.

"We are making representation to the Tax Office to ensure those people who are genuinely doing the right thing get some sort of exemption."

St Clair says the ATA will take further action if the ATO returns an unfavourable report.

"If the ATO’s review is not favourable, the ATA will seek amendments to the tax law to have an exemption from the excise manufacturing regime applied to the depot tank blending of bio-diesel and diesel by trucking operators before they use it on the road," St Clair says.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook