15th August, 2005
LEGAL NOTICE No. 47
IN EXERCISE of the powers conferred by section 234 of the Customs and Excise Act, the Minister for Finance makes the following Regulations-
THE CUSTOMS AND EXCISE (PETROLEUM OILS) (EXCISE) REGULATIONS, 2005
1. These Regulations may be cited as the Customs and Excise (Petroleum Oils) (Excise) Regulations, 2005.
For the purposes of these Regulations, "petroleum oils" means the goods classified under Tariff Number 2710 in Chapter 27 of the East African Community Customs Union Common External Tariff, as set out in Annex 1 to the Protocol on the Establishment of the East African Community Customs Union.
3. Excise duty on petroleum oils shall become due and payable at the time of importation or at the time of release by the customs from the Kenya Petroleum Refineries Limited.
4. Any person importing petroleum oils shall notify proper officer-of his intention to pump such oils by submitting the duly completed prescribed Form P1 set out in the Schedule, accompanied by a copy of -
(a) the manifest of the ship carrying the oils;
(b) the bill, of lading; and
(c) such other shipping documents as the Commissioner may direct.
5. The proper officer shall ascertain the quantity of petroleum oils in the ship prior to permitting the pumping of the oils.
6. Petroleum oils may only be pumped into specified tanks as indicated in the notice of intention given under rule 4.
7. The importer shall, upon completion of pumping under rule 6, notify the proper officer of the quantity of petroleum oils pumped by submitting to the proper officer, a notice in Form P2 in the Schedule.
8. (1) Where petroleum oils are imported through the Kipevu Oil Storage Facility each importer shall upon determination of ownership and assessment of tax liability pay the taxes and levies due on his proportion of such oils upon release thereof by the customs:
Provided that no taxes or levies on petroleum oils imported under this subparagraph shall remain unpaid for more than ten days from the date of entry.
(2) Where refined petroleum oils are released by the customs from the premises of Kenya Petroleum Oil Refineries Limited, all the taxes and levies thereon shall be paid by the respective importers upon such release.
Provided that no tax shall remain unpaid for more than ten (10) days after petroleum oils are transferred to the owners by the Kenya Petroleum Oil Refineries Limited.
9. (1) Where the petroleum oils are entered for transit, the importer shall furnish the proper officer with-
(a) evidence that such oils were ordered for by a person in a foreign country; and
(b) a transit bond in the form of a duly executed guarantee equal to the amount of the taxes and import declaration fee payable on the petroleum oils.
(2) Petroleum oils imported for transit shall be exported within a period of thirty (30) days from the date of importation:
Provided that the Commissioner may, upon request by an importer-
(i)extend the period by fifteen days, where he deems it appropriate to do so; and
(ii)with the approval of the Minister, extend the period specified under subparagraph (a) herein by such further period as may be appropriate in the circumstances.
(3) Duty shall be payable by the importer on any petroleum oils not exported in accordance with paragraph (2).
(4) Petroleum oils entered for transit shall be transported from Mombasa--
(a) by rail; or
(b) by pipeline, in which case the export thereof shall be done from Kisumu or Eldoret.
10. The importer shall, except in cases where subparagraphs (a) or (b) of the proviso to paragraph 9 (2) apply, within thirty (30) days from the date the petroleum oils where entered for transit, account for such oils by furnishing the office where the entry was made with—
(a) documentary evidence of exportation; and
(b) an application for cancellation of the transit bond.
11. Where the proper officer is satisfied that the petroleum oils have been exported, he shall cancel the bond and notify the importer accordingly.
12. Where an importer fails to furnish satisfactory evidence of exportation in accordance with rule 10, the proper officer shall by notice in writing require the guarantor to remit the full amount of the transit bond to the Commissioner within the period specified in the notice.
13. A guarantor who fails to remit the full amount of the bond when required to do so by the Commissioner shall be guilty of an offence and -
(a) liable to a fine equal to two times the amount of duty outstanding; aid
(b) shall not be allowed to conduct any business with the customs.
14. (1) An importer who fails to account for petroleum oils entered for transit in accordance with rule 10 shall be guilty of an offence and liable to- a fine not exceeding three times the duty payable on the petroleum oils entered for transit; or imprisonment for a period not exceeding three years, or both.
(2) A person convicted of an offence under this rule shall not be allowed to conduct any business with the customs.
15. The petroleum oils warehoused at the time of the coming into operation of this notice shall be released as follows-
(a) 25% on or before the 15th August, 2005;
(b) 50% on or before the 31st August, 2005;
(c) 75% on or before 15th September, 2005, and
(d) 100% on or before the 30th September, 2005.
16. No petroleum oils shall be entered for warehousing after the 31' July, 2005.
16A. Taxes and levies shall not be payable on the linefill except in situations where the Kenya Pipeline Company Limited notifies the Commissioner that a petroleum company intends to withdraw from participation either by ceasing operations or winding up business.
16B. (a) petroleum oils may be warehoused at the Kipevu Oil Storage Facility at Kilindini, Mombasa;
(b) Jet fuel and aviation fuel may be warehoused-
(i) in the depots of the Kenya Pipeline Company Limited at the Jomo Kenyatta International Airport and the Moi International Airport; or
(ii) in Lokichoggio, in duly licensed depots maintained by petroleum companies.
17. In any dispute relating to taxes on petroleum oils, the aggrieved person shall deposit the amount of duty demanded prior to lodgement of the dispute.