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Renewable Energy (Electricity) Act (the Act) liable entities that pay a large-scale generation
shortfall charge, resulting from a shortfall of surrender of LGCs, may claim a refund for the shortfall charge less an administration fee. Refunds are not available for small-scale technology certificate shortfall charges.
To qualify for a refund, liable entities must surrender additional LGCs to cover all or part of the amount of certificate shortfall for which they initially paid the shortfall charge.
A refund on a paid shortfall charge may only be claimed if:
On 13 September 2021, legislation removing tax on refunds of large-scale generation certificate (LGC) shortfall charges passed Parliament. The new law ensures that no tax is payable when companies receive a refund of their shortfall charge. The new law also categorises LGC shortfall charge refunds as non-assessable non-exempt income for all refunds received after 1 January 2019. For more information, visit the
Refunds can only be claimed for LGC shortfall charges that are incurred when a liable entity lodges an energy acquisition statement and renewable energy shortfall statement for the assessment year.
If a liable entity does not lodge a LGC shortfall statement for an assessment year, the agency will complete a default assessment of shortfall charges. In this scenario the liable entity would not be eligible for a refund, because they did not lodge a shortfall statement and begin the allowable refund period.
Refunds can only be claimed during the ‘allowable refund period’. The allowable refund period:
For example, a liable entity pays shortfall charges for the 2020 assessment year in February 2021. The allowable refund period begins when the liable entity lodges its large-scale generation shortfall statement (reporting no certificate shortfall) for the 2021 assessment year in February 2022. The allowable refund period would end in February 2024.
A liable entity can only claim a refund if it did not have any LGC shortfall, including carried forward shortfall, in the most recent energy acquisition statement that has been lodged or validated. For example, if, in the 2022 calendar year, a liable entity plans to claim a refund on its 2020 shortfall charge, it could only do so if it fully surrendered against its 2021 LGC liability.
A liable entity that has met the eligibility requirements for claiming a refund can make the claim by surrendering additional LGCs to clear all or part of the shortfall. The liable entity can then request a refund of that shortfall charge (less an administration fee).
A liable entity is not required to claim a refund for the total shortfall charge amount. A liable entity can make partial additional certificate surrenders toward a refund claim for the same assessment year, up to the full shortfall charge amount.
vintage rule does not apply to LGCs surrendered for a refund claim.
Refund claims are lodged on the
REC Registry. The liable entity must also send a letter nominating bank account details for the refund to be paid in to. This letter must be on company letter head signed by the CFO or equivalent.
The standard processing time for a refund claim is up to 6 weeks. Additional time may be required for more complex claims or where additional information is required.
The examples below outline some potential ways that a liable entity could claim a refund of paid shortfall charges. Please note, these examples are illustrative only and do not reflect every scenario. Please contact the
RET Liability team for specific advice.
Yes. The liable entity is eligible for a refund of the shortfall charge paid for the 2020 assessment year, less an administration fee. The liable entity:
Yes. The liable entity is eligible for a refund of the shortfall charges paid for the 2020 and 2021 assessment years, less an administration fee. The liable entity:
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