HCOTEG52500 – Imports: Relief from duty for re-landed 'waste' oil from ships

Extra Statutory Concession

An Extra Statutory Concession (ESC) allowing relief from duty and tax on certain marine waste oil discharged from ships bunkers was granted from 1 January 1998. (This ESC which was published as T/A 1/98 has now been incorporated into this guidance).

This concession is limited to waste heavy fuel oil and does not include waste gas oil.

The ESC granted reads:

“When marine waste oil which meets the Commissioners’ definitions, is discharged from ships it may be relieved from duty and tax”.

At the time of writing the derogation on waste oil is under review by the EC, and although a decision has yet to be made, it is likely that the derogation will be removed in 2008

Background

The treatment of waste oil discharged from ships bunkers is currently covered in Table AHCOTEG210250 and in HCOTEG52750 and Table BHCOTEG210500 of this Guidance.

Information on Waste Oils is to be consolidated into a new Book of Guidance, X-99: Assurance – Waste Oil.

Agreed definition of waste marine oil

Waste heavy Fuel Oil is the more common waste discharged. Waste heavy Fuel oil must meet the following definition:

• The waste must be intended to be discarded by the ships’ master; and
• It must fulfil the following criteria as a minimum:

Traders’ responsibilities

• Liability for excise duty on re-landed fuel rests with the importer. The definition of “importer” is given in Customs and Excise Management Act 1979, Section 1(1) as “in relation to any goods at any time between their importation and the time when they are delivered out of charge, includes any owner or other person for the time being possessed of or beneficially interested in the goods”.
• Therefore either the ship’s master or the processor removing the oil can be construed as being responsible for duty payment.
• At some locations frequent removers of waste oil have been approved as regular importers. The onus for ensuring that discharged oil which does not meet the above definition is entered for excise duty rests with the importer.
• Under the Extra Statutory Concession, there is no entry requirement for waste oil which meets the agreed definition of waste marine oil (above).

Official responsibility

• Our main concern in HMRC is to ensure that ships masters or oil processors do not treat discharged marine gas oil as waste, in particular where diesel-engined ships enter dry dock for refit and the gas oil is discharged from fuel tanks in a relatively clean state.
• Waste processors who remove waste bunkers from ships are obliged to keep records for environmental purposes and these records should assist officers to satisfy themselves that un-entered removals meet the above definition.