Issue
Is Liquefied Petroleum Gas (LPG) 'off-road diesel fuel' as defined in regulation 9 of the Energy Grants (Credits) Scheme Regulations 2003 (the Regulations) for the purposes of the Energy Grants (Credits) Scheme?
Decision
No. LPG is not 'off-road diesel fuel' as defined in regulation 9 of the Regulations for the purposes of the Energy Grants (Credits) Scheme.
Facts
An entity purchases LPG for use in 'agriculture' as defined in section 22 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA).
Reasons for Decision
Under the Energy Grants (Credits) Scheme, an entity is generally entitled to an energy grant if they are entitled to an off-road credit.
To be entitled to an off-road credit, the entity must purchase, or import into Australia, 'off-road diesel fuel' for use in one of the defined eligible activities, such as agriculture.
For the purposes of the EGCSA, 'off-road diesel fuel' is defined in regulation 9 of the Regulations.
Sub regulation 9(1) states that the following are off-road diesel fuel: (a) a product on which: ... (ii) excise duty has been paid at a rate that is applicable to diesel fuel, under the Schedule to the Excise Tariff Act 1921, at the time of payment; that is capable of being used as fuel in a diesel engine ...
Under the Schedule to the Excise Tariff Act 1921, two rates are given for diesel fuel, depending on the sulphur content of the diesel. Accordingly, LPG will be considered to be 'off-road diesel fuel' if: (a) excise duty has been paid on the LPG at either of the rates that apply to diesel fuel; and (b) the LPG is capable of being used as a fuel in a diesel engine.
Under the Excise Act 1901(Excise Act), excise duty is only imposed on excisable goods. Subsection 4(1) of the Excise Act defines 'excisable goods' as: goods in respect of which excise duty is imposed by Parliament, and includes goods the subject of an Excise Tariff or Excise Tariff alteration proposed in the Parliament.
LPG is not classifiable to the Schedule and is therefore not an excisable good. Accordingly, LPG is not a product on which excise duty has been paid at the diesel rate and consequently is not 'off-road diesel fuel' as defined in regulation 9 of the Regulations for the purposes of the Energy Grants (Credits) Scheme. [ HISTORY : The last paragraph of this ATO id has been amended for the purpose of clarity]