Amendments to Petroleum Products Subsidy Act 2005
Amendments to the Petroleum Products Subsidy Act 1997
The purpose of the amendments is to:
clarify provisions relating to the payment and refund of subsidies and related offences,
require sellers of subsidised fuel to include the subsidy rate on invoices, and
introduce recovery provisions to:
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a) authorise the Chief Commissioner of State Revenue to assess and recover alleged overpayments of subsidy,
b) authorise the Chief Commissioner to impose a penalty up to the amount of overpaid subsidy, depending on the culpability of the recipient of a subsidy, and
c) implement formal objection and appeal provisions in relation to assessments and penalties.
The amendments to the Petroleum Products Subsidy Act commence on the date of assent except where otherwise specified.
Eligible sales and purchases of subsidised fuel
The petroleum products subsidy scheme provides a subsidy of up to 8.35 cents per litre to sellers of petrol and on-road diesel within 5 zones extending south from the New South Wales-Queensland border. The scheme is designed to ensure sellers of petroleum in northern New South Wales are able to compete fairly with Queensland sellers, who receive subsidies from the Queensland Government.
The Commonwealth Government took over responsibility for subsidies relating to off-road diesel from 1 July 2000, when it introduced the goods and services tax and made consequential changes to duties of customs and excise. The NSW subsidy legislation was amended at the time to accommodate the changes, which included abolishing the NSW off-road diesel subsidy scheme.
Further amendments to clarify entitlements to the subsidy and remove redundant provisions commenced on 1 December 2003. Since then, a number of anomalies have been identified in the 2003 amendments, and it is proposed to make further minor amendments to overcome these anomalies. These amendments do not change the operation of the scheme, but merely to clarify eligibility, offences and administration because of ambiguity which creates uncertainty about the eligibility to buy subsidised fuel in certain circumstances.
The amendments are necessary to make the following points clear.
a subsidy is payable on all sales of petrol and diesel delivered for resale from a zone service station.
a consumer buying subsidised fuel from a zone service station does not have to refund the subsidy if the petrol is used for off-road purposes eg lawn-mowing.
in the case of diesel purchased from a zone service station bowser, the requirement to refund the subsidy only applies where the volume of diesel purchased exceeds 100 litres and is pumped from the bowser into a separate drum or tank, then used for off-road purposes.
when subsidised fuel and unsubsidised fuel is stored in the same tank, for the purposes of determining whether the purchaser was entitled to the subsidy or is required to refund the subsidy, in whole or in part, deliveries into and out of the tank are to be accounted for on a first-in-first-out basis.
the offence provisions in section 7C do not apply to registered sellers who deliver subsidised fuel to the premises of an eligible zone retailer, or to the premises of an eligible zone consumer, except in the case of fraud by the seller.
the offence provisions in section 7C do not apply to a seller of subsidised product from a service station bowser located in a subsidy zone, except in the case of fraud by the seller.
Form of approved notice or invoice
A seller of subsidised diesel, other than from a zone service station, is required to provide the purchaser with an approved notice, under section 7B of the Act, showing details specified in section 7A. The approved notice may be in the form of an invoice, and must show either the rate of subsidy or the zone by reference to which the subsidy was calculated.
The amendments alter the form of the approved notice to require the rate of subsidy to be shown on the invoice.
Recovery provisions
Purchasers are required to refund the subsidy if they purchase subsidised fuel but are not entitled to the subsidy. This may occur as a result of reselling subsidised fuel outside the zones or, in the case of diesel, buying subsidised diesel and using it for off-road purposes. However, if someone fails to repay the subsidy, the only remedy specified in the legislation is prosecution for an offence.
The amendments therefore include recovery provisions in the Act to enable the Chief Commissioner of State Revenue to assess the amount of refund due and issue a notice requiring repayment of the subsidy, including provision for imposition of an administrative penalty up to the amount of the subsidy in cases of dishonesty (section 21A).
To complement these proposals, the amendments include a formal objection and appeal process, to allow clients to seek a review when the Chief Commissioner issues such a notice, including a right of review by the Administrative Decisions Tribunal and a right to appeal to the Supreme Court (sections 21B to 21E).
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