Recycled Gear Oil, Lubrication Oil by Filtration and Purification & Repacking of Bulk oil into smaller containers

1.     PREPARATION OF LUBRICATING OIL BY REFINING, FILTRATION AND/OR 

        ADDITION OF SUBSTANCE FROM RECYCLED LUBRICATION OIL

2.     REPACKING LUBRICATION OIL FROM BULK CONTAINERS INTO SMALLER 

        PACKS

Definition of “Manufacture” Section 3, Sales Tax Act –as regarding Petroleum has been revised as compared to the previous definition. The following is the new definition:

(b)    in relation to petroleum, any process of separation, purification, refining, conversion and blending.

           (Sales Tax Act 2018)

My Opinion:

        The new definition of manufacture in relation to Petroleum is much broader compared to the definition that existed in the Sales tax Act 1972. Therefore recyclers of Gear oil and Lubricating oil from used oil will be required to register and pay Sales tax ie  same as Manufacturers of primary Gear oil or Lubricating oil ie from Petroleum Refineries.

          It would be advisable for manufacturers of Lubricating oil and Gear oil to apply for a Customs Ruling in case there is still harbor doubt about their 'manufacturing process'

Below is a decision that was made regarding Recycled Lubrication oil under the previous legislation:

In regards to repacking eg from large 44 gallon drums to 4 litre or 1 litre packs, is an exempted process 

as there is no change in the nature of the product.This activity is not considered Manufacturing 

even under Sales Tax Act 2018.Refer Sales Tax (Exemption from Registration ) Order 2018- item 8:

      8.   The repacking of bulk goods into smaller packages by a person other than a 

            registered manufacturer.

"Further manufacturing or to complete its manufacture" and definition of "Goods"

"goods are for further manufacturing or to complete its manufacture"

This is  a term found in column 4 titled  'Conditions' in the SALES TAX (PERSONS EXEMPTED FROM PAYMENT OF TAX) ORDER 2018. What are we to make of this? Does it mean that goods subcontracted have at least been worked upon or need to undergo some basic process of manufacture?

Under the previous legislation (Sales Tax Act 1972) a broad scope was adopted :

Definition of "Goods"

This is another word that needs clarification. Does "goods" refer to products that are complete ie have undergone the complete manufacturing process? Not so as the following decision shows:

This means that a Trader may source for semi  finished goods or partially manufactured goods for Export.