Commentary on provisions of Act Section 18: Tax on commercial exploitation of aggregate
This section, along with section 19 and Schedule 1, provides the mechanism for bringing to an end the collection and management of the UK’s aggregates levy in Scotland and allowing the Scottish Parliament to introduce its own tax on the commercial exploitation of aggregate in Scotland. Aggregates levy is a tax on the commercial exploitation of aggregate (rock, sand and gravel) in the UK, with ‘commercial exploitation’ defined by reference to four events which trigger a charge to the tax.
	This section sets out the scope of the Scottish Parliament’s power to introduce a tax on the commercial exploitation of aggregate in Scotland. The commercial exploitation of aggregate for fuel (as defined) is excluded from the scope of the tax. Subject to this limitation, the section leaves the terms ‘aggregate’ and ‘commercial exploitation’ undefined, so that the Scottish Parliament may decide its own definitions.
	Subsection (1) inserts a new Chapter 6 (section 80M) into Part 4A of the Scotland Act 1998.
	In new section 80M:
Subsection (1) provides that a tax charged on aggregate when it is subjected to commercial exploitation in Scotland is a devolved tax.
Subsections (2) and (3) provide that the devolved tax cannot be charged when aggregate is subjected to commercial exploitation for fuel, that is, used as a fuel (for example, when coal is burned) or processed in order to extract or produce fuel (for example, when shale is hydraulically fractured to extract gas). The exclusion also applies when aggregate is supplied under a contract for any of these purposes.
Subsection (2) of this section provides that the devolved tax cannot be charged on the commercial exploitation of aggregate in Scotland before a date to be specified in secondary legislation. Subsection (4) provides for the date of the changes made by subsection (3) and Schedule 1 to be appointed by regulations made by the Treasury.