Fuel tax credits for business
Fuel tax credits for business
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Note that the following information is not included in the Portable Document Format (PDF) version of this document.
Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge is being reviewed following a recent court/tribunal decision. As a result, information under the road transport activity may change.
For information about:
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You can download a printable version of Fuel tax credits for business (NAT 14584, 784KB) in PDF.
You can order a printed copy by noting the full title of the publication and either:
About this guide
This guide provides businesses that use fuel with the information you need about fuel tax credits. It will:
- help you assess if you are eligible
- give you an introduction to fuel tax credits
- give more detailed information about eligibility for fuel tax credits
- show you how to work out which fuel tax credit rates apply to your business activities
- explain how to register, if you have not already
- explain what records you must keep
- show you how to work out how much you can claim
- describe how to claim your credits.
Throughout this guide, you will find important notes giving you key information. Look for the  symbol.
You will also find 'more information' boxes (look for the  symbol) that will show any further steps you may need to take or supplementary information you may want to refer to.
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You can also claim fuel tax credits if you are a:
- householder using fuel to generate domestic electricity
- non-profit organisation not registered for goods and services tax (GST) and operating emergency vehicles or vessels.
These activities have separate claiming arrangements.
What is new?
The guide incorporates information about changes that affect fuel tax credits from 1 July 2012. You may be affected by one or more of the following changes:
- an increase in the rate from 19.0715 cents per litre for taxable liquid fuels (eg, petrol and diesel) used in some off-road business activities such as construction and mining
- a carbon charge which reduces the rates for some fuel types and activities (excluding specified agriculture, fishing and forestry and road transport activities and non-combustible fuel use)
- a decrease in the rate for heavy vehicles travelling on public roads
- changes in the rates for some gaseous fuels - these are liquefied petroleum gas (LPG), liquefied natural gas (LNG) or compressed natural gas (CNG)
- changes in the rates for some blended liquid fuels.
A fuel is taxable if excise duty or customs duty is required to be paid on it.
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For more information about these rate changes, refer to Fuel tax credits - changes from 1 July 2012.
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Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge is being reviewed following a recent court/tribunal decision. As a result, information under the road transport activity may change.
For information about:
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Most businesses can claim fuel tax credits - it is just the rate that varies, depending on what fuel you use and how you use it in your business activities.
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For more information, refer to:
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About fuel tax credits
Introduction
Fuel tax credits provide you with a credit for the fuel tax (excise or customs duty) included in the price of fuel you use for your business activities in:
- machinery
- plant
- equipment
- heavy vehicles.
You may also be entitled to a fuel tax credit for compressed natural gas (CNG) that has been subject to the carbon pricing mechanism and used in specified agriculture, fishing or forestry activities.
The only fuels that are not eligible are:
- aviation fuels
- fuels you use in light vehicles of 4.5 tonne gross vehicle mass (GVM) or less, travelling on a public road
- fuel you acquired but did not use because it was lost, stolen or otherwise disposed of
- some alternative fuels.
You must be registered for both GST and fuel tax credits before you can make a claim. You claim fuel tax credits on your business activity statement (BAS).
Depending on your circumstances, you may also need to meet an environmental criterion for heavy diesel vehicles if they were manufactured before 1 January 1996.
Background of fuel tax credits
On 1 July 2006, fuel tax credits were introduced for fuel used in heavy vehicles and in a range of other business activities.
Eligibility was expanded on 1 July 2008 to include (at a half rate) taxable fuels used in other business activities, machinery, plant and equipment as part of a gradual implementation. From 1 July 2012, these activities are eligible for the full fuel tax credit rate, but the rate for most will be reduced by a carbon charge.
From 1 December 2011, excise or customs duty applies to gaseous fuels - that is, liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) - used for transport purposes in most instances. There are also circumstances where excise duty is paid on gaseous fuels that are used for non-transport use. If you acquire, manufacture or import duty paid gaseous fuels for use in eligible off-road business activities, you may be entitled to claim fuel tax credits for those fuels acquired from 1 December 2011.
From 1 July 2012, under the new clean energy laws, a carbon charge generally applies to taxable fuels that are combusted in non-transport activities.
Clean energy and the carbon charge
From 1 July 2012, under the new clean energy laws, a carbon charge applies to certain taxable fuels. The carbon charge is an amount equal to the price of carbon emissions from the use of liquid or gaseous fuels. The amount of the carbon charge varies for different fuels depending on their carbon emissions. The carbon charge will be applied to certain uses of fuel by reducing the fuel tax credit rates by the relevant carbon charge but there are some exceptions.
Fuels and activities not affected by the carbon charge
Fuel tax credit rates will not be reduced by a carbon charge for:
- fuels used in
- vehicles with a gross vehicle mass (GVM) greater than 4.5 tonnes travelling on a public road
- specified activities in the agriculture, fishing or forestry industries
- activities that do not involve combustion of the fuel - for example, fuel used to clean machinery or as a mould release agent
- renewable fuels such as biodiesel or fuel ethanol.
Fuels and activities affected by the carbon charge
Fuel tax credit rates are reduced by a carbon charge for all other taxable fuels and activities where the fuel is combusted.
Carbon charge amounts will increase annually, further reducing fuel tax credits rates over the next three years until 30 June 2015. The rates will then be reviewed on a six-monthly basis from 1 July 2015, due to the commencement of an emissions trading scheme.
Rates and eligible fuels at a glance
Fuel tax credit rates are subject to change due to changes in the carbon price, the road user charge and excise duty rates on gaseous fuels. When calculating your credits, make sure you use the correct and most up-to-date rates for your business.
Eligible fuels
You can claim fuel tax credits for any taxable fuel if you acquired, manufactured or imported it to use in carrying on your business.
Fuel is taxable fuel if excise or customs duty is required to be paid on it. Taxable fuels can be
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The fuel tax credit rates used in the examples in this guide are valid for the situation described and the reporting period. Rates may vary - for the current rates refer to Fuel tax credit rates and eligible fuels.
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Liquid fuels
Liquid fuels (that is, taxable liquid fuels) are:
- petrol
- diesel
- other combustible fossil fuels such as:
- kerosene,
- mineral turpentine,
- white spirit,
- toluene,
- heating oil and
- some solvents.
Fuel ethanol and biodiesel are not included as they have no effective fuel tax and are not fossil fuels.
Gaseous fuels
If you use duty paid gaseous fuels (acquired from 1 December 2011) in eligible business activities you may be entitled to fuel tax credits. Gaseous fuels are:
- liquefied petroleum gas (LPG)
- liquefied natural gas (LNG)
- compressed natural gas (CNG).
Excise or customs duty applies to gaseous fuels used for transport purposes in most instances. From 1 July 2012 to 30 June 2013, excise duty equal to the carbon charge applies to LPG and LNG supplied for non-transport use. From 1 July 2013, LPG and LNG that is not used for transport will be subject to a carbon price under the carbon pricing mechanism rather than as excise duty.
Non-transport CNG is exempt from excise duty. The carbon charge for CNG is applied to the natural gas used to produce the CNG via the carbon pricing mechanism.
If you use non-transport gaseous fuels covered by the carbon pricing mechanism in specified agriculture, fishing or forestry activities, you will be entitled to a fuel tax credit in an amount equivalent to the carbon charge. You are entitled to a fuel tax credit in this situation even though no excise or customs duty has been paid on the fuel.
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Terms we use
Transport is when:
- LPG or LNG has had duty paid at a higher rate with the intention that it is for use in an internal combustion engine of either a motor vehicle or vessel, either directly or by filling another tank connected to such an engine
- CNG has had duty paid on the presumption that it is imported or compressed for use as a fuel in a motor vehicle.
Non-transport is when LPG and LNG has had duty paid at a lower rate as it is intended for a use other than in an internal combustion engine of a motor vehicle or vessel - for example, residential heating or burner applications. The lower non-transport duty rate represents the carbon charge for LPG and LNG. If you have acquired non-transport LPG in bulk from a supplier, your invoice should show it is for non-transport purposes.
Gaseous fuel used in forklifts mainly off-road is also considered non-transport.
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The amount of fuel tax credits you can claim for duty paid gaseous fuels will vary over time because the excise or customs duty rates are being phased in over four years with final rates in place from 1 July 2015.
Generally, most businesses that use gaseous fuels for non-transport use will not be able to claim fuel tax credits because the fuel was supplied specifically for non-transport use at a lower excise duty rate. This lower excise rate is equivalent to the carbon charge and as such cannot be offset by a fuel tax credit unless the fuel is used in an activity that is exempt from the carbon charge.
When you acquire LPG at the lower fuel tax rate, your invoice will generally include the following notice:
Not to be used, or supplied, for transport use. Penalties apply.
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Penalties apply if you use or supply LPG that is at the lower fuel tax rate for transport use.
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Example: LPG supplied for non-transport use
In August 2012, Universal LPG delivers bulk LPG to Outback Mining. Outback Mining uses the LPG to fuel their electricity generator.
Universal LPG pays duty at 3.68 cents per litre on the LPG because it is supplied for non-transport use. The invoice from Universal LPG is marked 'Not to be used, or supplied, for transport use. Penalties apply'. Outback Mining is not entitled to claim fuel tax credits for their non-transport use.
Example: LPG not for use as a fuel
In August 2012, Gas Tank Ltd supplies Air Pty Ltd with bulk LPG for non-transport use. The LPG is supplied at the reduced excise rate of 3.68 cents per litre to account for the carbon charge. The LPG used by Air Pty Ltd is not used in an internal combustion engine or combusted, but is used as a propellant in aerosol deodorisers.
As the LPG is not combusted by Air Pty Ltd, it should not be subject to the carbon charge and Air Pty Ltd is entitled to fuel tax credits at a rate of 3.68 cents per litre.
Packagers and suppliers claim the fuel tax credits for LPG duty paid at the higher transport rate where they either:
- package it into containers of 210kg capacity or less for non-transport use
- sell it for transfer to tanks for residential use.
Example: Fuel tax credits claimed earlier in the supply chain
In July 2012 Gas Tank Ltd acquire bulk duty paid LPG for both transport and non-transport use at the rate of 5 cents per litre. They package some of it into small nine kilogram LPG gas bottles that they sell to a service station. The service station then sells the LPG gas bottles to its customers, primarily for BBQ use.
Because Gas Tank Ltd supplied some of the duty paid LPG in containers of 210 kilograms or less for use other than in an internal combustion engine, Gas Tank Ltd is entitled to fuel tax credits at a rate of 1.32 cents per litre for that LPG. Gas Tank Ltd's fuel tax credits are reduced by the carbon charge of 3.68 cents per litre because the LPG is combusted.
Neither the service station nor its customers can claim fuel tax credits for the LPG gas bottles as the fuel tax credit is only available to the packager.
You cannot claim fuel tax credits for duty paid gaseous fuels used in:
- heavy vehicles - those with a gross vehicle mass (GVM) greater than 4.5 tonne - travelling on public roads as the road user charge reduces any fuel tax credit entitlement to nil - see Road transport
- a light vehicle with a GVM of less than 4.5 tonne travelling on a public road - such as a taxi, car or small van.
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Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge is being reviewed following a recent court/tribunal decision. As a result, information under the road transport activity may change.
For information about:
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Conversion rates
If you measure LPG in kilograms or CNG in megajoules, standard conversion rates are provided to help you calculate your fuel tax credit entitlement. The rates are:
- 1 kilogram of LPG = 1.885 litres of LPG
- 1 megajoule of CNG = 0.01893 kilograms of CNG.
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You can only use the conversion rate for LPG if you measure the LPG using equipment other than volumetric measurement equipment.
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Example: LPG conversion
Paul owns a farm that uses LPG to dry his grain. He acquires his LPG by the kilogram. In December 2012, he acquires 4,000 kilograms of LPG that has been duty paid at the higher transport rate for use in his grain dryer.
As Paul is conducting an agricultural activity that is exempt from the carbon charge, he is able to claim the full fuel tax credit of 5.0 cents per litre for the duty paid LPG. So he can claim his fuel tax credits, Paul converts the 4,000 kilograms of eligible LPG to litres as follows:
4,000kg × 1.885 = 7,540 litres of duty paid LPG.
Blended fuels
Diesel blends
Your fuel tax credit is, in part, based on the effective fuel tax paid on the particular fuel. Generally, no effective fuel tax is paid on biodiesel, but special rules apply to diesel blends containing 20% biodiesel or less.
The effective fuel tax paid is calculated as if the fuel you are using is entirely diesel, if both of the following apply:
- your fuel is a blend of diesel and biodiesel
- it contains 20% or less biodiesel (eg, B20).
Petrol blends
Your fuel tax credit is, in part, based on the effective fuel tax paid on the particular fuel. Generally, no effective fuel tax is paid on fuel ethanol, but special rules apply to petrol blends containing 10% ethanol or less.
The effective fuel tax paid is calculated as if the fuel you are using is entirely petrol, if both of the following apply:
- your fuel is a blend of petrol and ethanol
- it contains 10% or less ethanol (eg, E10).
Other blends
For other blends of two or more taxable fuels, the effective fuel tax paid is calculated based on the proportion of each taxable fuel.
Fuels which are not eligible
Some fuels are not eligible, including:
- aviation fuels
- fuels you use in light vehicles of 4.5 tonne gross vehicle mass (GVM) or less, travelling on a public road - for example, a car, small van or taxi
- fuel you acquired but did not use because it was lost, stolen or otherwise disposed of
- fuels, such as ethanol or biodiesel that have already received another grant or subsidy.
Eligible activities
The amount of fuel tax credits you are entitled to claim depends on what fuel you use and what business activity you use it in.
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Fuel is combusted when it is burnt or ignited, for example, in an internal combustion engine or in a cement kiln.
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Activities where the fuel is combusted
- Road transport - that is, vehicles with a gross vehicle mass (GVM) greater than 4.5 tonne travelling on a public road - diesel vehicles you acquired before 1 July 2006 can equal 4.5 tonne GVM.
- Specified off-road activities in:
- agriculture
- fishing
- forestry.
- Other off-road activities, for example:
- mining
- marine and rail transport
- nursing and medical services
- burner applications
- electricity generation by commercial generator plant, stationary generator or a portable generator
- construction
- manufacturing
- wholesale/retail
- property management
- landscaping.
Activities where the fuel is not combusted
Non-combustible uses include:
- Fuel you use directly onto a surface, for example, as a solvent
- Fuel you use as an input or ingredient in the manufacture of products
- Packaging or supplying fuel:
- Packaging liquid fuels in containers of 20 litres or less
- Filling LPG into cylinders of 210kg capacity or less for supply for non-transport use
- Supplying duty paid LPG for transfer into tanks for residential use
- Supplying or distributing kerosene or heating oil fuel for domestic home heating.
Road transport
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Refer to Fuel tax credit rates and eligible fuels for the rates from 1 July 2012 for heavy vehicles travelling on a public road.
You need to use the rate in effect at the beginning of the tax period covered by your BAS.
Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge is being reviewed following a recent court/tribunal decision. As a result, information under the road transport activity may change.
For information about:
Currently, fuel tax credits for heavy vehicles are not reduced by the carbon charge, but they are reduced by the road user charge.
If your activity is not listed here, it may be eligible under another activity.
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Heavy vehicles - those with a gross vehicle mass (GVM) greater than 4.5 tonne using taxable fuels (such as petrol or diesel) and travelling on a public road - are entitled to fuel tax credits. However, the amount of fuel tax credits you can claim is reduced by the road user charge, which is subject to change. For gaseous fuel, the current road user charge exceeds the fuel tax credit rate thereby reducing entitlement to nil.
You can claim fuel tax credits for taxable liquid fuels you use in a heavy vehicle, including emergency vehicles, travelling on a public road if the vehicle meets all the following conditions:
- it is used in carrying on a business
- it has a GVM greater than 4.5 tonne - diesel vehicles acquired before 1 July 2006 can equal 4.5 tonne GVM
- diesel vehicles meet any one of the environmental criteria.
For fuel tax credits, the GVM of a vehicle is the GVM accepted by the authority that registered the vehicle. Trailers cannot be included in the GVM of a rigid vehicle. For prime movers, the GVM is the gross combination mass - that is, the mass of the vehicle and the trailer.
Incidental use
Fuel use includes any incidental use that is integral to operating the vehicle, including parts of a journey where the vehicle is stationary. For example, you can claim for fuel you use to power auxiliary equipment in (or on) the vehicle, such as refrigeration units, cement mixers or garbage compactors. If your vehicle uses more than one type of fuel, such as diesel to power the engine and petrol to power auxiliary equipment, you can claim both fuels.
Incidental use does not include fuel you use in mobile equipment such as mobile cranes, forklifts and bobcats. This type of plant or equipment may be eligible under Other off-road activities where the fuel is combusted.
Other travel
Trips that are part of normal transport operations (such as trips on private access roads to transport depots, including within transport depots) are eligible for fuel tax credits under the road transport activity.
Road user charge
For heavy vehicles (that is, those with a GVM greater than 4.5 tonne) travelling on a public road the amount of fuel tax credits is reduced by the road user charge, which is subject to change.
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Duty paid gaseous fuels - that is, LPG, LNG and CNG, used in heavy vehicles travelling on a public road are eligible for fuel tax credits.
However, the road user charge currently reduces any fuel tax credit entitlement to nil for these fuels.
You can convert the road user charge rate to cents per kilogram for LNG and CNG by multiplying it by 1.333.
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Example: Road user charge
Jim's Deliveries operates four 5 tonne diesel trucks. All the fuel Jim acquires for the trucks is used for travelling on public roads.
In May 2012, Jim's Deliveries acquired 10,000 litres of diesel to use in their trucks. The fuel tax credit rate for heavy vehicles in May 2012 was 15.043 cents per litre (that is, 38.143 cents per litre less the road user charge of 23.1 cents per litre).
When lodging his monthly BAS for May 2012, Jim's fuel tax credit claim was $1,504. This was worked out by fuel acquired in May 2012 −
10,000 litres × 15.043 cents per litre = $1,504.30.
On 1 July 2012, the road user charge increased, which meant the fuel tax credit rate for heavy vehicles changed to 12.643 cents per litre.
In July 2012, Jim's Deliveries acquired another 10,000 litres of diesel. When lodging his monthly BAS for July 2012, Jim's fuel tax credit claim was $1,264. This was worked out by fuel acquired in July 2012 −
10,000 litres × 12.643 cents per litre = $1,264.30.
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For the current and previous years' rates for a vehicle with a GVM greater than 4.5 tonne travelling on a public road:
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Environmental criteria for heavy diesel vehicles manufactured before 1 January 1996
If you use a heavy diesel vehicle on a public road and your vehicle is manufactured before 1 January 1996, you must meet one of the environmental criteria to claim fuel tax credits. If you use farm vehicles mainly on an agricultural property to carry on a primary production business, you do not have to meet any of these criteria.
To meet the environmental criteria you only need to answer 'yes' to one of the following questions about your diesel vehicle:
- Do you service your vehicle in line with a maintenance schedule endorsed by the Transport Secretary?
- Have you registered your vehicle in an audited maintenance program accredited by the Transport Secretary?
- Has your vehicle passed the 'DT80' test - that is, the Australian Transport Council's in-service emission standard for diesel vehicles?
- Is your vehicle retrofitted with an engine manufactured after 1 January 1996 that meets the Australian emissions standards applying after that date?
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For more information about the environmental criteria for heavy diesel vehicles, refer to:
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If you acquired alternative fuel before 1 July 2010, you may also receive an energy grant for the alternative fuel component of the fuel blend under the energy grants credits scheme.
The fuel grant rate for alternative fuels reduced to zero on 1 July 2010. You cannot claim a grant for fuels purchased on or after that date.
You can claim fuel tax credits for taxable fuel you use in an agricultural activity if the purpose of your business is to obtain produce for sale (or it directly supports such a business), including:
- cultivating or gathering in crops
- cultivating the soil
- rearing livestock1
- viticulture, horticulture, pasturage or apiculture
- transporting livestock1 other than on a public road2 - for example, moving for agistment
- hunting and trapping
- removing waste from an agricultural activity.
The following activities are also eligible if they are carried out on an agricultural property:
- drilling bores
- building or maintaining firebreaks
- fencing
- frost abatement
- controlling weeds, pests or disease
- building or maintaining sheds, pens, silos, silage pits, dams, water tanks, troughs, channels, irrigation systems and drainage systems
- planting and tending trees not intended for felling
- constructing earthworks, including dams, levee banks, windbreaks, contour banking and levelling or grading land
- conserving soil and water
- milking, shearing and mustering stock
- breeding animals for working the land, such as draught horses
- breeding animals for livestock activities, such as stockhorses or working dogs
- baling hay on the agricultural property where the hay was cut3
- service, maintenance and repairing business vehicles or equipment
- storing or packing produce
- preventing produce deterioration
- disposing of waste from an agricultural activity
- use of the fuel for a residential premises by the farmer for themselves and other residents of the premises for meeting their domestic requirements.
The following activities are also eligible for fuel tax credits at the full rate if they are carried out on, or adjacent to, an agricultural property:
- pumping and supplying water solely for use in agriculture
- building or maintaining firebreaks
- fire fighting.
Example: Agriculture
Siena uses a diesel-powered tractor to cart materials around her vineyard. The fuel she uses for this activity is eligible for fuel tax credits at the rate of 38.143 cents per litre.
Siena also uses a petrol-fuelled ride-on mower and whipper-snipper to maintain her vineyard. From 1 July 2008, Siena can claim fuel tax credits at 38.143 cents per litre for the fuel she uses in this equipment.
As Siena uses fuel for an activity exempt the carbon charge, she is able to claim the full amount of fuel tax credit and continues to use the rate of 38.143 cents per litre after 1 July 2012.
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For more information and a comprehensive list of agricultural activities:
- refer to Fuel Tax Ruling FTR 2012/1 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'agriculture' as defined in section 43-15 of the Fuel Tax Act 2006
- phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.
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Notes:
1. For the purposes of fuel tax credits, livestock includes any animal raised to produce food, fibres, skins, fur or feathers or for use in farming the land.
2. Transporting livestock on a public road may be eligible under the road transport activity.
3. If the hay is baled on the agricultural property where it was grown, it does not matter who actually performs the baling.
Fishing
If you are undertaking commercial fishing operations, you can claim for taxable fuel (for example, diesel, petrol or duty paid gaseous fuels) you use for any of the following activities, if these activities are not connected with sport, recreation or tourism:
- taking, catching, capturing of fish4
- processing fish on board vessels
- fish farming
- constructing ponds and tanks or other structures to contain fish to be farmed, as long as this is done by the fish farmer or a contractor or subcontractor to the farmer
- pearling
- operating a dedicated mother vessel in connection with eligible fishing operations
- sailing a vessel to or from a port for the purpose of refitting or repairing the vessel or its equipment
- undertaking trials connected with the repair or refit.
Example: Fishing
Boris is a commercial fisherman and he owns five petrol-driven vessels for off-shore fishing. From 1 July 2008, Boris can claim fuel tax credits at 38.143 cents per litre for the petrol he uses in his fishing business.
As Boris uses fuel for an activity exempt from the carbon charge, he is able to claim the full amount of fuel tax credit and he continues to use the rate of 38.143 cents per litre after 1 July 2012.
Boris also uses a petrol-driven forklift to load his fish onto trucks for delivery to the local fish markets. From 1 July 2012, Boris can claim fuel tax credits at 32.623 cents per litre for the petrol he uses in the forklift. This rate includes the carbon charge. The use of the forklift by Boris is not an exempt activity and the carbon charge applies to the fuel used in his forklift.
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For more information about the eligibility of fishing activities:
- refer to Fuel Tax Ruling FTR 2012/3 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'fishing operations' as defined in section 43-70 of the Fuel Tax Act 2006
- phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.
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Note:
4. For the purposes of fuel tax credits, fish means freshwater and saltwater fish, and includes crustaceans, molluscs and any other living resource sourced from the sea, seabed, fresh water or the bed below fresh water.
Forestry
If you are undertaking commercial forestry operations, you can claim for taxable fuel (for example, diesel, petrol or duty paid gaseous fuels) you use for any of the following activities:
- planting or tending trees in a forest or plantation that is intended for felling
- felling or thinning trees in a forest or plantation
- transporting, milling or processing trees in the forest or plantation in which they were felled - if the transport is not on a public road
- transporting timber to a sawmill or chip mill that is outside the forest or plantation but inside Australia - if the transport is not on a public road
- milling timber at a sawmill or chip mill outside the forest or plantation
- constructing and maintaining roads in a forest or plantation, if the roads are integral to eligible forestry activities - this does not include quarrying activities or transporting any materials you use for road building.
Example: Forestry
Forest First Pty Ltd has been claiming fuel tax credits at 38.143 cents per litre for the diesel they acquired prior to 1 July 2012 for use in machinery constructing forestry roads. As this activity is exempt from the carbon charge, they continue to use the rate of 38.143 cents per litre after 1 July 2012.
Forest First Pty Ltd also use diesel in machinery used for slicing timber into veneer and they had been claiming 19.0715 cents per litre for the diesel acquired prior to 1 July 2012, they can claim 31.933 cents per litre. This activity is subject to the carbon charge.
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For more information and a comprehensive list of forestry activities:
- refer to Fuel Tax Ruling FTR 2012/2 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'forestry' as defined in section 43-75 of the Fuel Tax Act 2006
- phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.
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Other off-road activities where the fuel is combusted
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Refer to Fuel tax credit rates and eligible fuels for the rates from 1 July 2012, for these activities. You need to use the rate that applied when you acquired the fuel.
Fuel tax credits for these activities are reduced by an amount of carbon charge relevant to the fuel you use.
You may have previously claimed for these activities at either the full rate (38.143 cents per litre) or the half rate (19.0715 cents per litre) for taxable liquid fuels you acquired before 1 July 2012.
If your activity is not listed here, it may be eligible under another activity.
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Examples of these activities
The following are examples of eligible off-road activities where the fuel is combusted - it is not a complete list:
- mining
- marine and rail transport
- nursing and medical services
- burner applications
- electricity generation by commercial generator plant, stationary generator or a portable generator
- construction
- manufacturing
- wholesale/retail
- property management
- landscaping
- dredging
- panel beating
- greenhouse heating
- in cement kilns
- quarrying
- in industrial furnaces.
Example: Quarrying
Michael's Sand Supplies Pty Ltd quarries sand to use in landscaping. From 1 July 2008, Michael has been claiming fuel tax credits at 19.0715 cents per litre for the diesel he uses in his excavators.
For diesel acquired from 1 July 2012 to 30 June 2013, Michael can claim 31.933 cents per litre for this activity - which is the full fuel tax credit rate of 38.143 cents less the carbon charge for diesel. This rate will change annually.
Example: Generating electricity
Natalie operates a caravan park and supplies electricity for residents to use. From 1 July 2006, she has been claiming fuel tax credits at the rate of 38.143 cents per litre for the diesel she uses in her stationary generator.
From 1 July 2012 to 30 June 2013, Natalie can claim fuel tax credits at the rate of 31.933 cents per litre for the diesel acquired and used in her generator. This rate will change annually.
Example: Burner use
Pauline operates a foundry and uses diesel to run her furnace. From 1 July 2006, Pauline has been claiming fuel tax credits at the rate of 38.143 cents per litre.
For diesel acquired from 1 July 2012 to 30 June 2013, the fuel tax credit rate is reduced to 31.933 cents per litre due to the carbon charge. This rate will change annually.
Example: Construction
Giorgio's company is contracted to do some earthworks for the local council on sites. From 1 July 2008, Giorgio has been claiming fuel tax credits of 19.0715 cents per litre for the petrol he uses in his bobcat and his compactor.
For petrol acquired from 1 July 2012 to 30 June 2013, Georgio can claim 32.623 cents per litre for this activity. This rate will change annually.
Example: Manufacturing
Wesley operates a diesel forklift to move materials and products around his steel fabrication workshop. From 1 July 2008, Wesley has been claiming fuel tax credits of 19.0715 cents per litre for the diesel he uses in his forklift.
For diesel acquired from 1 July 2012 to 30 June 2013, Wesley can claim 31.933 cents per litre for this activity. This rate will change annually.
Example: Landscaping
Anne-Maree owns a landscaping franchise. From 1 July 2008, she has been claiming fuel tax credits at 19.0715 cents per litre for the petrol she uses in her whipper-snipper and in her ride-on lawn mower.
For petrol acquired from 1 July 2012 to 30 June 2013, Anne-Maree can claim 32.623 cents per litre for this activity. This rate will change annually.
Example: Property management
Kylie has a property management business and maintains a number of rental properties. From 1 July 2008, Kylie has been claiming fuel tax credits at 19.0715 cents per litre for the petrol she uses in her lawn mower, blower-vac and other equipment.
For petrol acquired from 1 July 2012 to 30 June 2013, Kylie can claim 32.623 cents per litre for this activity. This rate will change annually.
Non-combustible use
You can claim fuel tax credits for taxable fuel (for example, diesel, heating oil, kerosene, fuel oil, toluene, mineral turpentine, white spirit, duty paid LPG, LNG or CNG) you use for a non-combustible use in your business.
Refer to Fuel tax credit rates and eligible fuels for the rates from 1 July 2012, for fuel you use for non-combustible activities. You need to use the rate that applied when you acquired the fuel.
Fuel tax credit rates for these non-combustible activities are not reduced by the carbon charge.
If your activity is not listed here, or you use fuel in an activity where the fuel is combusted (eg, in an internal combustion engine or burnt), it may be eligible under another activity.
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Non-combustible use means using fuel in a way that does not ignite or burn the fuel, for example:
- fuel you use directly in a non-fuel manner - that is, it is not combusted
- fuel you use as an input or ingredient in the manufacture of products that are not intended for combustion.
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Fuel you use directly in a non-fuel manner
This category includes fuel that you apply directly onto a surface and not to provide power, for example:
- fuel you use to clean machinery parts or drums
- diesel you spray directly onto a road as a sealant
- fuel you use as a mould release.
Fuel you use as an input or ingredient
You can use fuel in this category as an input or ingredient in the manufacture of another product, as long as that product cannot be used as a fuel in an internal combustion engine, or as a burner fuel. Examples include:
- printing inks
- paint
- plastics
- cleaning agents
- adhesives
- rubber products
- pharmaceutical products.
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We may issue a determination that a blend of a fuel with a non-fuel product does not constitute a fuel. If your blend is subject to such a determination, you may be entitled to fuel tax credits for the fuel component you use in making that blend.
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Example: Non-fuel uses
Ted's Paint Supplies purchases toluene (a fuel) to use in manufacturing paint. The price of the fuel includes the excise duty of 38.143 cents per litre.
Ted blends the toluene with other non-fuel products to make the paint that he then sells to his customers.
Ted is entitled to fuel tax credits of 38.143 cents per litre on the toluene because the final product (the paint) cannot be used as a fuel in an internal combustion engine.
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If you are not sure if the fuel you use to manufacture your products is eligible for fuel tax credits, you can request a private ruling from us. For more information about private rulings:
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Packaging or supplying fuel
You can claim fuel tax credits where you are:
- packaging liquid fuels in containers of 20 litres or less
- transferring LPG that has been duty paid at the higher transport rate into cylinders of 210kg capacity or less for supply for non-transport use
- transferring LPG that has been duty paid at the higher transport rate into tanks at residential premises for use at those premises
- supplying or distributing heating oil or kerosene for domestic home heating.
Packaging liquid fuels in containers of 20 litres or less
You can claim fuel tax credits where you package mineral turpentine, white spirit, kerosene and certain other liquid fuels (prescribed by the regulations) in containers of 20 litres or less for uses other than in an internal combustion engine.
Consumers may use the fuels for a variety of reasons, including cleaning, lamp lighting and other general household uses.
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The products' packaging (including any images or text forming part of the packaging) must not suggest or imply that the fuel can be used in an internal combustion engine.
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Example: Packaging liquid fuels
Acme Painters Supplies buys duty paid turpentine in bulk. They then package it into 2 litre containers ready for sale for use other than in an internal combustion engine. They can claim fuel tax credits of 38.143 cents per litre as duty had been paid on the turpentine and the packaged product is not intended for use in an internal combustion engine.
Filling cylinders of 210kg capacity or less for supply for non-transport use
You may be able to claim fuel tax credits for LPG that has been duty paid at the higher transport rate when you supply it in or into cylinders of 210kg capacity or less for use other than in an internal combustion engine of a motor vehicle or vessel (the exclusion for motor vehicles does not apply to forklifts used mainly off-road).
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If you purchase LPG or LNG that is subject to a full or partial remission of duty, you must not use or supply that fuel for transport use.
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Example: Supplying duty paid LPG
Home Gas Supplies purchases LPG that has been duty paid at the higher transport duty rate to transfer into different cylinder sizes - all less than 210 kilograms. They then sell the full cylinders for a variety of non-transport uses, for example, domestic cooking.
From 1 July 2012 to 30 June 2013, Home Gas Supplies can claim fuel tax credits at 1.32 cents per litre - that is, the rate of duty for LPG of 5 cents less the carbon charge for LPG. The purchasers of their product can not claim fuel tax credits because it has already been claimed by Home Gas Supplies.
Supplying duty paid LPG for transfer into tanks for residential use
You may be able to claim fuel tax credits if you supply LPG that has been duty paid at the transport rate into tanks at residential premises for use at those premises.
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If you purchase LPG or LNG that is subject to a remission of duty, you must not use or supply that fuel for transport use.
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Example: Supply of duty paid LPG into tanks for residential use
Bright Gas Ltd purchases LPG duty paid at the transport rate and they supply this gas into tanks where the fuel is specifically for residential use. Because their LPG is duty paid and it is not being used for transport use, they can claim fuel tax credits.
From 1 December 2011, they were able to claim full fuel tax credits. From 1 July 2012 to 30 June 2013, they can claim fuel tax credits at 1.32 cents per litre - that is, the rate of duty for LPG of 5 cents less the carbon charge for LPG (3.68 cents per litre).
The residential consumer cannot claim fuel tax credits as they have already been claimed further up the supply chain by Bright Gas Ltd.
Supplying or distributing fuel for domestic home heating
If you distribute heating oil or kerosene for residential heating, you can claim fuel tax credits so that individual users do not have to claim them. You must have a reasonable belief that the fuel will only be used for domestic home heating.
Example: Supply of fuel for domestic home heating
Mark purchases bulk heating oil at a cost that includes excise duty. He sells and distributes the heating oil to various locations in Tasmania. He delivers to both households for use in heating and to a number of businesses including a bakery which uses the heating oil to fire its ovens.
Mark is entitled to claim fuel tax credits on the heating oil he sells to the households. He can take the fuel tax credit entitlement into account when setting the price of the heating oil.
Mark is not entitled to claim fuel tax credits for the heating oil he sells to businesses as each business is entitled to claim fuel tax credits in their own right.
Prior to 1 July 2012, Mark claimed 38.143 cents per litre for the heating oil he delivered to households. From 1 July 2012, the amount of fuel tax credit Mark can claim for the heating oil he delivers to households is reduced by the carbon charge to 31.933 cents per litre. This rate will change annually.
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For more information about eligible activities associated with non-combustible use:
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Public and private rulings
We have a public rulings program that provides our view on various subjects, such as entitlements for different industries and record keeping requirements. We have public rulings on fuel tax credits for the following activities:
- agriculture - Fuel Tax Ruling FTR 2012/1 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'agriculture' as defined in section 43-15 of the Fuel Tax Act 2006
- fishing - Fuel Tax Ruling FTR 2012/3 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'fishing operations' as defined in section 43-70 of the Fuel Tax Act 2006
- forestry - Fuel Tax Ruling FTR 2012/2 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving 'forestry' as defined in section 43-75 of the Fuel Tax Act 2006
We also have public rulings on fuel tax credits covering certain circumstances, such as:
- vehicle and equipment hire arrangements - Fuel Tax Ruling FTR 2009/1 Fuel tax: entitlement to a fuel tax credit under section 41-5 of the Fuel Tax Act 2006 in a vehicle or equipment hire arrangement
- incidental travel on a public road and the road user charge - Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge
- the meaning of 'acquire', 'manufacture' and 'import' - Fuel Tax Ruling FTR 2007/1 Fuel tax: the meaning of 'acquire', 'manufacture' and 'import' in the expression 'taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that you do so for use in carrying on your enterprise' in the Fuel Tax Act 2006.
If this guide or any related fact sheets or public rulings do not answer your specific questions about your entitlement to fuel tax credits, you can apply to us for a private ruling.
You may need a private ruling
If your circumstances are complex or confusing, you can apply to us for a private ruling that will clarify how fuel tax credits apply to you. Once you have read this guide and any related fact sheets or public rulings, you can apply for a private ruling if you still have a specific question about your entitlement.
You can then rely on this ruling as a statement of how the current law applies to you for your fuel tax credit eligibility. If you choose to do this, we must apply the law to you in the way set out in the ruling. However, if we think the ruling is incorrect and disadvantages you, we can apply the law in a way that is more favourable for you - unless we are prevented from doing so by a time limit imposed by the law.
If it turns out that the ruling does not correctly state how the current law applies to you, you do not have to:
- repay any credit we overpaid you
- pay any penalties or interest for the matters the ruling covers.
You cannot rely on this ruling if either of the following applies:
- you already have a ruling on your activity and you did not tell us about this
- we revise or change this ruling before your activity starts and before the relevant income year or other period starts.
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For more information about rulings:
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Self assessment
You must self-assess your fuel tax credit claims. This means you are responsible for:
- assessing your own eligibility for fuel tax credits
- working out the dollar amount
- keeping records that support your claims.
Self assessment for indirect taxes (including fuel tax credits) commenced on 1 July 2012. When you lodge a BAS for tax periods that commence on or after that date, you will still include the dollar amounts of fuel tax credit and fuel tax credit over claim for the tax period. You will also include your GST payable, input tax credits and other amounts as required.
The Commissioner is taken to have made an assessment of your net credit or liability (known as your net amount or net fuel amount) based on the amounts you include on your BAS on the day you lodge. Your BAS is treated as being a notice of assessment signed by the Commissioner and issued on the day it is given to us.
Registering
Before you can claim, your business must be registered for both of the following:
- goods and services tax (GST)
- fuel tax credits.
If you are already registered for GST but have not yet registered for fuel tax credits, you can do this at any time without affecting your GST tax period - whether it is monthly, quarterly or annual.
How to register for fuel tax credits
The registration process is slightly different depending on whether it is for an existing business or a new business.
Existing businesses
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To register for fuel tax credits by phone, we must have you listed as an authorised contact person for the business.
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If you are already registered for GST, you can register for fuel tax credits by:
- phoning our automated registration service on 13 72 26 at any time - make sure you have your Australian business number (ABN) and your tax file number available
- phoning us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday
- completing the Add a new business account (NAT 2954) form.
If you have an ABN but are not registered for GST, you can register for GST and fuel tax credits at the same time by:
- registering electronically through the Business Portal (to use this service you must be registered to deal with us electronically)
- completing the Add a new business account (NAT 2954) form
- phoning us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.
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To obtain a copy of the form:
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New businesses
You can register for an ABN, GST and fuel tax credits at the same time by:
- registering electronically through the Australian Business Register
- using the electronic lodgment service through your registered tax agent
- completing either of these forms
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For more information about how to deal with us electronically, visit Online Services.
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How to cancel your registration
If your circumstances change and you are no longer eligible to claim fuel tax credits, you should cancel your registration by:
Changing tax periods
Some businesses may consider changing their fuel tax credit period so they can access their fuel tax credits more frequently. However, this also involves changing your GST tax period, which might impact on your other reporting obligations. We recommend you think this through carefully or seek the advice of your tax or business adviser.
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For information about changing your GST tax period, refer to the fact sheets:
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Working out your fuel tax credits
Before you can claim your fuel tax credits on your business activity statement (BAS), you must know what records you need to keep and how to work out what you are entitled to.
There are three steps to calculate your fuel tax credits:
- Step 1: Work out the eligible quantity (litres or kilograms) for each fuel type and each business activity
- Step 2: Check which fuel tax credit rate applies for each taxable fuel used in each of your activities
- Step 3: Work out the amount of your fuel tax credits in dollars by multiplying the eligible quantity of fuel by the relevant fuel tax credit rate (Step 1 × Step 2).
The amount of fuel tax credits you can claim depends on what fuel you use, when you acquired it, and how you use the fuel.
There are different rates for different fuels and different activities, so remember to separate your calculations for each fuel type and for each activity that has a different fuel tax credit rate.
You need to use the rate that applied when you acquired the fuel. This may not necessarily be the rate in effect when you use the fuel or claim your fuel tax credits.
For heavy vehicles travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your BAS.
Records you must keep
To work out your fuel tax credits accurately and to support your claims, you must keep accurate records.
Now that many fuel tax credit rates are changing each year it is even more important to keep good records. You need to show the type of fuel you acquired and the business activities you use it in, such as whether it was for on-road or off-road activities.
You also need to keep records of when the fuel was acquired as this will tell you what fuel tax credit rate to use for each fuel when you work out your fuel tax credits.
You must have business and tax records that show which activities your business is carrying out as well as records to support your actual claim.
Records that show your business activities include:
- business expenses that relate to eligible activities
- sales and production records
- lease documents for agricultural land or equipment
- share farming contracts
- vehicle and equipment use and maintenance records
- work contracts
- government requirements - such as licences.
Records that support your claims for fuel tax credits include:
- tax invoices for fuel you have acquired including when it was acquired
- bank statements
- records of how you used the fuel and any that was lost, stolen or otherwise disposed of
- records showing how you have worked out your fuel tax credits - the worksheet we send you with your BAS is a useful record to keep.
For heavy diesel vehicles manufactured before 1 January 1996 and used on a public road, your records must show you meet one of the environmental criteria - for example, you service your vehicle according to an approved maintenance schedule.
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For more information about the environmental criteria for heavy diesel vehicles, refer to:
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If you claim less than $300 in fuel tax credits in a year, you do not have to keep records showing you acquired fuel. However, the fuel you acquire must be for use in an eligible business activity.
The records must be in English (or easily translated into English) and you must keep them for five years after you make the claim. You do not need to send your records to us unless we ask you to.
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For more information about the records you must keep to support your claims, refer to Fuel Tax Determination FTD 2006/2 Fuel tax: what records are required to be kept by taxpayers to substantiate a claim for a fuel tax credit?
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Tax invoices
From 1 July 2010, the requirements for a document to be a valid tax invoice were relaxed. As a result of the changes, documents will generally only fail to be a tax invoice where key information has not been provided.
A tax invoice should include enough information to enable the following to be determined:
- that the document is intended to be a tax invoice
- the date of purchase
- the purchaser's name
- the type of fuel
- the quantity purchased
- the price
- the supplier's name
- the supplier's Australian business number (ABN)
- the goods and services tax (GST) payable.
If you cannot support your claims with adequate records, you may have to repay all or part of the fuel tax credits you have received. You may also incur penalties.
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You cannot claim fuel tax credits for LPG where the first page of the invoice you receive includes the following notice:
Not to be used, or supplied, for transport use. Penalties apply.
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Step 1: Work out the eligible quantity
You will need to do a separate calculation for each fuel type and business activity.
Check the quantity of fuel you have acquired (litres or kilograms) and work out how much of that fuel is eligible for fuel tax credits. You must exclude any fuel that:
- is not eligible because it was used in an ineligible activity - for example, in a vehicle of 4.5 tonne GVM or less travelling on a public road
- is not eligible because it is a gaseous fuel that was duty paid at the lower non-transport rate for LPG and LNG, and exempt non-transport CNG or where the fuel tax credits have already been claimed earlier in the supply chain
- you acquired but did not use because it was lost, stolen or otherwise disposed of.
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If you measure LPG in kilograms or CNG in megajoules, standard conversion rates are provided to help you work out your fuel tax credit entitlement. The rates are:
- 1 kilogram of LPG = 1.885 litres of LPG
- 1 megajoule of CNG = 0.01893 kilograms of CNG.
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There are a number of apportionment methods and measures you can use to work out the eligible quantity of fuel. The common methods are the:
- constructive method - where you add up all the eligible quantities of each fuel type and activity
- deductive method - where you subtract any ineligible fuel, such as fuel you used in small vehicles on a public road, from your total fuel
- percentage use method - where you determine a reliable percentage of eligible fuel usage for a sample period and apply this over a number of tax periods
- estimated use method - where you make a fair and reasonable estimate of the quantity of fuel you acquire for use in a tax period for
- eligible and ineligible activities
- multiple activities that have different fuel tax credit rates.
You can also use a reliable measure as part of an apportionment method, such as:
- odometer readings of kilometres actually travelled
- route distances if a vehicle travels on fixed routes
- kilowatt hours of electricity generated
- hours of operation for the vehicle or equipment
- average hourly fuel consumption of vehicles or equipment.
Step 2: Check the fuel tax credit rate for each taxable fuel type and activity
The amount of fuel tax credits you can claim depends on the fuel you use and how you use it in your business.
You need to use the rate that applied when you acquired the fuel. This may not necessarily be the rate in effect when you use the fuel or claim your fuel tax credits.
However, for heavy vehicles travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your BAS.
Step 3: Work out the fuel tax credit amount
To work out the dollar amount of your fuel tax credit entitlements, you must multiply your eligible quantities of fuel for each activity by the relevant fuel tax credit rate for that fuel type and activity (if you have different rates for different activities or use different fuel types).
When you have worked out the dollar amount for each activity and fuel type, add all these figures together to arrive at a total for each tax period, then claim this amount by writing it at label 7D on your BAS. See Claiming section.
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To help you work out your fuel tax credits, use:
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Claiming
Claiming fuel tax credits
You claim fuel tax credits on your BAS in the same way as you claim GST credits.
For GST group representatives and other businesses with complex structures, the claiming arrangements vary. For:
- GST groups - the representative member of the group claims fuel tax credits on behalf of the group
- GST branches - each branch claims fuel tax credits separately from the parent entity
- GST joint ventures - the operator claims fuel tax credits on behalf of the participants.
If you are claiming fuel tax credits for domestic electricity generation and for eligible business activities, you must claim all of your fuel tax credits on your BAS.
If you pay GST in instalments you can also claim fuel tax credits.
When to claim
You can claim fuel tax credits at the time you acquire, manufacture, or import the fuel into Australia.
If you account for GST on a cash basis, you should claim your fuel tax credits in the BAS period you pay for the fuel. If you account for GST on a non-cash basis, you should claim your fuel tax credits in the BAS period you receive your invoice for the fuel.
How to complete your claim
On your BAS, you must record at fuel tax credit label 7D:
- your fuel tax credit entitlement for the tax period
- any adjustments attributed to the tax period that will increase your entitlement to fuel tax credits.
If you need to make an adjustment in the tax period that will decrease your entitlement to fuel tax credits, you must include this at fuel tax credit label 7C.
Only record the whole dollar amount - leave off any cents.
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You must claim any outstanding fuel tax credits within four years of the end of the tax period to which they apply. You can do this using your current BAS rather than revising an earlier BAS that relates to the date of the tax invoice.
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Your fuel tax credits at label 7D will be offset against any fuel tax credit over claim (label 7C) for the current period, as well as any other outstanding tax obligations or some Australian Government debts you may have.
How to submit your claim
You can claim fuel tax credits by lodging your BAS in one of three ways. You can:
- submit a paper BAS
- lodge electronically through the Business Portal
- have your tax agent submit your claim for you via ELS - our electronic lodgment service.
These claiming methods are explained in more detail below.
Claiming using a paper business activity statement
Once you are registered for both GST and fuel tax credits, your next BAS will include the fuel tax credit labels. You must claim your fuel tax credits on your BAS in the same way you claim your GST credits.
Your BAS must be signed by a person authorised to act on behalf of the business.
Claiming electronically
If you are registered to deal with us online, you can lodge your BAS electronically through the Business Portal.
If you already lodge your BAS using the internet, you have the software to claim your fuel tax credits electronically.
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If you want to claim your fuel tax credits online, register by phoning us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.
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If you register to claim your fuel tax credits online, we will send you software with security tools to ensure the information you send via the internet remains secure and is authenticated by electronic signature. After you install this software on your computer, you can:
- access your personalised electronic BAS
- complete your claim as you would for a paper claim
- transmit the completed form to us.
Claiming via your tax agent
Your tax agent may lodge your claim on the internet using the electronic lodgment service. This service is used by most tax agents to lodge business activity statements and income tax returns.
If you pay GST in instalments
If you pay your GST in instalments, you can claim fuel tax credits on a quarterly basis. After you register, you will receive quarterly business activity statements regardless of whether you pay two or four GST instalments for the financial year, instead of receiving an instalment notice.
You can only claim fuel tax credits on your business activity statements. You cannot claim them on your annual GST return.
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Your fuel tax credits are not included in your pre-printed GST instalment amount at label G21. You must report your actual fuel tax credits separately at label 7D on your business activity statements.
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Instalment notices
Once you register for fuel tax credits, instead of receiving an instalment notice with no lodgment requirement, you will receive a quarterly BAS. You lodge this to claim your fuel tax credits.
You only need to lodge a BAS if you want to claim fuel tax credits for the period or if you have an adjustment to make for a fuel tax credit over-claim.
Income tax and fuel tax credits
Fuel tax credits are part of your business income, so you must include them in your tax return, at 'Assessable government industry payments'. They are not subject to GST.
Fuel tax credits are also deemed to be pay as you go (PAYG) instalment income. We will include these amounts in your PAYG instalment amount (at label T7) and the instalment rate (label T2) on your BAS.
You must also include your fuel tax credits as part of your PAYG instalment income at label T1 on your BAS.
Adjustments and mistakes
Sometimes you may need to change the amount of fuel tax credits you have claimed. You can do this by making an adjustment or by correcting a mistake.
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These arrangements only apply to fuel tax credit adjustments and mistakes.
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Adjustments
You must make an adjustment when you use the fuel for a different purpose than the one you intended at the time you acquired, imported or manufactured it, resulting in a change to your entitlement. That is, your entitlement was correct at the time you acquired the fuel and made a claim but your actual use of the fuel later changed.
If you must make an adjustment, you should account for it in the period you actually use the fuel for another purpose.
Example: Adjustment
Mia is a primary producer and is exempt from the carbon charge for fuel used in off-road agricultural activities. On 1 September 2012, she acquires 10,000 litres of diesel to use in her combine harvester. The full fuel tax credit rate for diesel is 38.143 cents per litre, so Mia claims fuel tax credits of $3,814 on her BAS for the quarterly tax period ending 30 September 2012.
During November, Mia uses 1,000 litres of the diesel in her one-tonne utility that she uses for driving to and from town. As she is not entitled to claim fuel tax credits for this fuel (because it is used in a vehicle with a GVM of 4.5 tonne or less, travelling on a public road), Mia must make a fuel tax credit adjustment on her next BAS.
Mistakes
A mistake generally means you have claimed fuel tax credits on a BAS when you were not entitled to, or when you were entitled to a different amount.
Mistakes might be the result of a preparation error. For example, you may have:
- transcribed the wrong final figure into fuel tax credit label 7D
- worked out your entitlement using the wrong fuel tax credit rate
- claimed all of the fuel you acquired, instead of just the portion of fuel that is eligible - for example, you may have claimed for the fuel used in all your vehicles instead of just the heavy vehicles.
Example: Mistake
When Michelle was working out her quarterly BAS, she realised that when she had completed her previous BAS, she had wrongly claimed fuel tax credits for the fuel she used in the ute she drives on public roads. This meant her calculations were wrong and she had entered the wrong amount at label 7D on her BAS.
Michelle works out that she had accidentally over claimed $70 in fuel tax credits, so she includes the $70 at label 7C on her current BAS.
In some circumstances, you can correct mistakes on your current BAS, but there are rules and limits about when you can do this.
Penalties and interest charges
You may be liable for a penalty if you claim more fuel tax credits than you are eligible for. You may also have to pay a general interest charge, which will be worked out from either the due date of the BAS on which you made the over claim or the BAS to which the adjustment relates.
If you make corrections on a BAS immediately after the original claim, you will not receive the general interest charge (GIC) or a penalty. However, there are rules about when you can do this.
We are not necessarily bound by these arrangements in cases where we find you are misrepresenting your fuel use intentions or making unreasonable or unsupportable claims.
If you find a mistake you made in a BAS you lodged before your last one, you must revise your original BAS. In these cases, you must pay the general interest charge and you may have to pay a penalty. However, if you voluntarily disclose the mistake to us, this will be taken into account when we are considering any penalty.
If we conduct an audit or review and you must repay over claimed fuel tax credits, the general interest charge will apply and you may have to pay a penalty. You can claim general interest charges as a deduction on your business's income tax return.
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If you receive an overpayment of fuel tax credits, the overpaid amount should be treated as tax that is due. This means that you must repay the overpayment plus any penalties and the GIC owing from the date of the overpayment.
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Checklist
Registering
Eligibility
Record keeping
Have you kept detailed records of the quantity of fuel you have acquired?
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Do your records show details of your fuel use?
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Do your records prove your eligibility for fuel tax credits?
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Do your records establish the basis and method you used to work out your entitlement?
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Claiming
Fuel tax credits calculation worksheet
Use this worksheet to help you calculate your fuel tax credits and claim them on your business activity statement (BAS). You must be registered for goods and services tax (GST) and fuel tax credits before you can claim.
More information
For more information about fuel tax credits, refer to the following publications:
For more information about the taxation of gaseous fuels, refer to the following publications on our website:
You can also obtain printed copies of many of our publications by:
- visiting online ordering
- phoning the Publications Distribution Service on 1300 720 092.
The Fuel tax credit eligibility tool can help you work out your eligibility for fuel tax credits and the rate at which you can claim.
The Fuel tax credit calculator can help you work out your fuel tax credit entitlements as well as adjustments.
You can also:
- phone 13 28 66 between 8.00am and 6.00pm, Monday to Friday
- write to us at
Australian Taxation Office
PO Box 3001
PENRITH NSW 2740
If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service on 13 14 50.
If you are deaf, or have a hearing or speech impairment, phone the ATO through the National Relay Service (NRS) on the numbers listed below:
- TTY users, phone 13 36 77 and ask for the ATO number you need
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
- internet relay users, connect to the NRS on www.relayservice.com.au and ask for the ATO number you need.
Business Portal
Business Portal users can submit questions by using the 'Mail' function offered on the portal. The Business Portal is a secure website that allows you to access a range of information services online. Portal users can send messages to us and receive messages from us on a range of excise topics including fuel tax credits, petroleum, alcohol and duty free.
The messaging function can be accessed from the portal home page by selecting the 'Mail' link on the left navigation bar.
You can also use the portal to lodge business activity statements, check accounts, update business registration details and perform a range of other transactions online.
Last Modified: Wednesday, 12 December 2012
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