Amounts that are to be subtracted, such as foreign exchange losses, interest received or receivable and allowable deductions, must be entered in the return as a positive amount. When calculating the value of coal recovered, ROS will automatically subtract all deductible amounts.
2.1 Assessable revenue
Assessable revenue is the total Australian dollar amount (AUD) received or recoverable by you in respect of the quantity (tonnes) of coal disposed of, by you during the royalty period.
The calculation of assessable revenue for a royalty period, involves totalling:
- export, domestic and other disposals
- foreign exchange gains and losses.
Less, any interest received on coal sold on an extended credit basis, but only to the extent that the interest has been included in the AUD amount of disposals.
2.1.1 Disposals of coal
All coal that is recovered under your mining lease and disposed of must be accounted for and reported in your royalty returns at a price that would reasonably be expected to have been obtained if the coal had been sold to an arm's length buyer (“the arm’s length price”). The return requires you to enter the tonnes and AUD value for all disposals.
Export disposals
Coal that was recovered under your mining lease and is for consumption at a destination outside of Australia.
Domestic disposals
Coal that was recovered under your mining lease and is consumed or to be consumed within Australia.
Other disposals
These are disposals of coal not otherwise captured by ‘Export disposals’ or ‘Domestic disposals’. This may include disposals where:
- an authorised officer has made a determination of price and quantity for certain disposals.
- related party transactions have occurred (disposals to a related entity).
- coal that has been loaned.
- coal that has been disposed of for nil consideration.
What you must include when reporting disposals in your return
You must include amounts received or recoverable by you from disposals of the coal that has been recovered from your mining lease, including:
- All sales and transfers of coal.
- Any sales of coal to another colliery (colliery sales).
- Coal that you have disposed of or transferred for nil consideration, including any loans of coal. These are deemed a sale for royalty purposes and must be included as a disposal at an arm’s-length price.
Colliery sales and loans are to be reported as export disposals unless it is known that the coal is to be consumed domestically and therefore reported as a domestic disposal.
Do not include:
- Invoiced purchases and ‘borrows’ - coal that you have purchased or borrowed is not to be reported in your royalty return. This is coal that has been recovered by another leaseholder, who will be including the value of that coal as a disposal in their own royalty return.
- Any amounts received or recoverable by you from disposals of coal that were recovered by a different leaseholder and transferred to you.
- Foreign exchange gains or losses (these are recorded in the return in a separate field).
2.1.2 Arm’s length price
All disposals of coal must be reported in your royalty return at an arm’s length price.
In determining whether there is an arm’s length price, the substance of the dealing and the relationship between the parties are considered. An arm’s length transaction is taken to have occurred where the parties to a transaction have acted severally and independently to form their bargain. The relationship between the parties or their associates is relevant, as associated parties may not act independently in forming their bargain in the same manner that unrelated or non-associated parties would normally do.
You may be requested to demonstrate that you have applied an arm’s length price in calculating the ‘value of coal recovered’. If an authorised officer is not satisfied that the price applied to a disposal of coal is an arm’s length price, an authorised officer may determine an appropriate price.
2.1.3 Foreign exchange gains and losses
Coal disposed of in a foreign currency will have foreign exchange gain or loss implications for the seller and buyer.
A foreign exchange gain or loss is the difference between the Australian dollar value of the invoice at the time of disposal and the Australian dollar amount at the time of payment.
When selling coal in a foreign currency, you must disclose any foreign exchange gain or loss in your royalty return.
Foreign exchange gains and losses are included in ‘Assessable Revenue’ when calculating the royalty payable.
Please refer to the Determination for full details of foreign exchange gains/losses.
2.1.4 Interest received or receivable
This is the total amount of any interest received or receivable by the leaseholder in respect of coal sold during the royalty period on an extended credit basis. You only enter an amount in the royalty return if that interest amount was included in the disposal values.
2.2 Allowable deductions
The following are the allowable deductions for the purposes of calculating the value of coal recovered, as set out in clause 3(3)(a) of the Determination.
- Beneficiation costs
- Coal research levy
- Mine subsidence levy
- Commonwealth levy for long service leave
- Mines rescue levy
- Bad debts – an authorised officer must be satisfied that an amount owing to a leaseholder is irrecoverable (please refer to item 6 of Schedule B of the Determination).
- Such other charges paid or incurred by a leaseholder, as determined by an authorised officer.
No cost or expense other than those specified are an allowable deduction.
2.2.1 Beneficiation
Beneficiation is the process of removing impurities from the mined coal, thereby improving its quality.
Beneficiation costs of coal recovered under your lease and disposed of by you during the royalty period are claimable as an allowable deduction at the following rates:
- Coal subjected to a full cycle of washing – $3.50 per tonne.
- Coal subjected to a simple wash/wet jigging – $2.00 per tonne.
- Coal crushed and screened, but not subjected to a washing process – $0.50 per tonne.
You only enter the tonnes of coal subject to each beneficiation method (‘full wash’, ‘simple wash/wet jigging’ and ‘crushed and screened’). When you enter the tonnes, the return will calculate and populate the corresponding AUD field.
Where a leaseholder incurs beneficiation costs that relates to multiple mining leases that they hold or different methods of recovering coal from a mining lease, the cost must be apportioned between the mining leases or coal extracted by different methods on a fair and reasonable basis. An authorised officer may substitute an apportionment method if not satisfied that the method adopted by the leaseholder is fair and reasonable in the circumstances.
2.2.2 Levies
The following levies are allowable deductions:
- Coal research levy – this levy is payable to Australian Coal Research Ltd for the Australian Coal Association Research program. You can only claim the amount (if any) of levy paid or incurred by the leaseholder, that relates to coal recovered and disposed of by the leaseholder during the royalty period for the mining lease.
- Mine subsidence levy – colliery proprietors are required to pay an annual levy into the Mine Subsidence Compensation Fund under the Coal Mine Subsidence Compensation Act 2017. The amount of that levy paid or incurred by a leaseholder during a royalty period is an allowable deduction for that royalty period.
- Commonwealth levy for long service leave – is a monthly levy is imposed under the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 on all employers in the coal industry to fund long service leave entitlements to employees in the coal mining industry. You may only claim the amount (if any) of the levy paid or incurred, by a leaseholder, during a royalty period that relates to or can reasonably apportioned to the leaseholder’s mining lease.
- Mines rescue levy – payable by coal mine owners under the Coal Industry Act 2001 for the funding of mines rescue services. The amount of that levy paid or incurred by a leaseholder during a royalty period is an allowable deduction for that royalty period.
Where a leaseholder incurs a levy or levies that relates to multiple mining leases or different methods of recovering coal from a mining lease, the cost must be apportioned between the mining leases or coal extracted by different methods on a fair and reasonable basis. An authorised officer may substitute an apportionment method if not satisfied that the method adopted by the leaseholder is fair and reasonable in the circumstances.
2.2.3 Other charges paid or incurred
An authorised officer may determine that other charges may be claimed as an allowable deduction. To claim any other charges as an allowable deduction, you must have prior approval from an authorised officer. Written evidence of such approval must be provided on request or can be uploaded. See section 1.6.1.
2.3 Value of coal recovered
The value of coal recovered is the result of Assessable Revenue less Allowable Deductions.
2.4 Opening and closing stock
These are the reportable stock totals at the beginning and end of the royalty period. Stock should include Run of Mine (ROM) stockpiles, washed stock, stock in transit and stock at port.
