Show download pdf controls
  • Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Adjustments and mistakes

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    An adjustment is necessary when you have already claimed fuel tax credits based on your intention to use that fuel in a certain way, and you end up using some of that fuel in a different way. Therefore, your BAS was correct at the time of lodgment because you intended to use the fuel that way.

    A mistake is when the amount you claimed on your BAS was not correct at the time you lodged it because you made an error.

    Any outstanding fuel tax credits must be claimed within four years of the end of the tax period to which they apply.

    If you forget to claim fuel tax credits that you are entitled to, this is not considered a mistake. You can claim them using your current BAS rather than revising an earlier BAS that relates to the date of the invoice.

    If you are including fuel you omitted from a previous BAS period, from 1 December 2011 to 30 June 2015 you need to use the rate that applied when you acquired the fuel.

    Find out about:

    Adjustments

    Making an adjustment may increase or decrease your fuel tax credit entitlement. A decrease may mean you have to repay a debt to us.

    If an adjustment results in an increase in your fuel tax credit entitlement, then you add the dollar amount of the adjustment to your fuel tax credit entitlement at label 7D (Fuel tax credit) on your BAS.

    If an adjustment results in a decrease in your entitlement, then you have been overpaid fuel tax credits. Write this dollar amount at label 7C (Fuel tax credit over claim) on your BAS.

    Types of adjustments

    You may have to make a fuel tax credit adjustment on your BAS for a number of reasons. The table below outlines how to make an adjustment in a range of situations.

    Table 1: Types of adjustments – Change to your intended use of fuel

    Type of adjustment

    Increase or decrease in entitlement

    Which label to complete on your BAS

    When to make the adjustment

    Used more fuel for an eligible use than intended.

     

    See example 1.

    Increase

    Label 7D

     

    Fuel tax credit

    On the BAS for the tax period in which you become aware of the actual use of the fuel.

    Used less fuel for an eligible use than intended.

     

    See example 2.

    Decrease

    Label 7C

     

    Fuel tax credit over claim

    On the BAS for the tax period in which you become aware of the actual use of the fuel.

    Used the fuel for a different eligible use than intended, increasing your entitlement.

     

    See example 3.

    Increase

    Label 7D

     

    Fuel tax credit

    On the BAS for the tax period in which you become aware of the actual use of the fuel.

    Used the fuel for a different eligible use than intended, decreasing your entitlement.

     

    See example 4.

    Decrease

    Label 7C

     

    Fuel tax credit over claim

    On the BAS for the tax period in which you become aware of the actual use of the fuel.

    Table 2: Types of adjustments – Fuel lost, stolen or otherwise disposed of

    Type of adjustment

    Increase or decrease in entitlement

    Which label to complete on your BAS

    When to make the adjustment

    Claimed for fuel for an eligible use and it was later lost, stolen or otherwise disposed of, decreasing your fuel tax credit entitlement.

     

    See example 5.

    Decrease

    Label 7C

     

    Fuel tax credit over claim

    On the BAS for the tax period in which you become aware of the loss, theft or disposal of the fuel.

    Generally, when calculating your fuel tax credit entitlement, use the fuel tax credit rate that applied at the time you acquired the fuel.

    Rates are subject to change annually to 1 July 2015, then six monthly thereafter, due to changes in the carbon price.

    If you pay your GST in instalments and are registered for fuel tax credits, special rules apply. Under these rules, an adjustment may be delayed to a later tax period.

    See also:

    Example 1: Change in the use of fuel – used more fuel than intended, increasing entitlement

    Peter has a grounds maintenance business. He buys 1,500 litres of diesel on 21 July 2012, intending to use 500 litres in his slashers and mowers (eligible for fuel tax credits), and 1,000 litres in his two tonne diesel truck that travels on public roads (ineligible for fuel tax credits). Peter claimed fuel tax credits on his September quarterly BAS of $159 (500 × $0.31933) for his intended use of diesel in the slashers and mowers, which includes the carbon charge for diesel.

    On 15 October, Peter sells his truck and buys a two tonne petrol utility for the same use (also ineligible for fuel tax credits), so he decides to use the remaining diesel (1,000 litres) in his slashers and mowers.

    Peter can claim an increase in fuel tax credit entitlements of $319 (1,000 × $0.31933) at label 7D (Fuel tax credit) in his December quarterly BAS as this is the BAS for the tax period in which he became aware of the changed use of the fuel.

    Example 2: Change in the use of fuel – used less fuel than intended, decreasing entitlement

    Chris has an earthmoving business. On 21 July 2012, he buys 4,000 litres of diesel intending to use it in his front-end loader and backhoe working on-site (eligible for fuel tax credits and subject to the carbon charge). Chris claims fuel tax credits of $1277 (4,000 × $0.31933) on his September quarterly BAS.

    In October, Chris changes his business activities. He sells his backhoe and uses 2,000 litres of the diesel in his one tonne utility driving between sites. Chris has used less fuel in an eligible activity than he claimed for as the actual use of the 2,000 litres in his utility is ineligible for fuel tax credits.

    Chris must decrease his fuel tax credit entitlements by $638 (2,000 × $0.31933) at label 7C (Fuel tax credit over claim) on his December quarterly BAS as this is the BAS for the tax period in which he becomes aware of the changed use of the fuel.

    Example 3: Change in the use of fuel – used for a different eligible use, increasing entitlement

    Jess has a primary production business. On 15 July 2012, she buys 5,000 litres of diesel intending to use 2,000 litres in her 10 tonne truck carrying produce to the rail head and 3,000 litres in her tractors and harvester. Both activities are eligible for fuel tax credits but different rates apply. Jess claimed $1,397 on her September quarterly BAS (2,000 × $0.12643 = $252.86) plus (3,000 × $0.38143 = $1,144.29). Jess's primary production business activity is exempt from the carbon charge.

    In October, her truck broke down. Jess had only used 1,000 litres in her truck, so she used the remaining 1,000 litres (intended for her truck) in her tractors and harvester instead. As Jess has used the fuel for a different use than intended, her actual entitlement to fuel tax credits is $1,652 (1,000 × $0.12643 = $126.43) plus (4,000 × $0.38143 = $1,525.72).

    Jess can claim an increase in fuel tax credit entitlements of $255 ($1,652 − $1,397) at label 7D (Fuel tax credit) on her December quarterly BAS as this is the BAS for the tax period in which she becomes aware of the changed use of the fuel.

    Example 4: Change in the use of fuel – used for a different eligible use, decreasing entitlement

    Leo is a commercial fisherman and only uses his boat for business purposes. He buys 12,000 litres of diesel on 28 August 2012, intending to use it in his boat (eligible for fuel tax credits and an activity exempt from the carbon charge), so Leo claimed fuel tax credits of $4,577 (12,000 litres × $0.38143) on his September quarterly BAS.

    In October, Leo uses 1,000 litres of the diesel in his forklift, which he uses on the dock to load his catch for transportation. Leo has used the fuel for a different eligible use than intended, decreasing his entitlement. As it has a different rate, Leo is only entitled to 31.933 cents per litre for the 1,000 litres he used in the forklift as it includes the carbon charge.

    Leo calculates the adjustment by subtracting his actual entitlement from the original amount of fuel tax credits he claimed.

    Leo’s actual entitlement is $4,515 (11,000 × $0.38143 = $4,195.73) plus (1,000 × $0.31933 = $319.33).

    Leo must decrease his fuel tax credit entitlements by $62 ($4,577 − $4,515) at label 7C (Fuel tax credit over claim) on his December quarterly BAS as this is the BAS for the tax period in which he becomes aware of the changed use of the fuel.

    Example 5: Fuel lost, stolen or otherwise disposed of, decreasing entitlement

    Gerry stores his diesel in a bulk tank at his earthmoving business. In September 2012, Gerry buys 5,000 litres intending to use it in his front end loader (eligible for fuel tax credits but subject to the carbon charge) so, on his September quarterly BAS he claimed fuel tax credits of $1,596 (5,000 × $0.31933).

    In October, the tank is damaged and Gerry estimates half the fuel (2,500 litres) is lost. Gerry cannot use that fuel in his business so he is not entitled to fuel tax credits for the lost fuel.

    Gerry must decrease his fuel tax credit entitlements by $798 (2,500 × $0.31933) at label 7C (Fuel tax credit over claim) on his December quarterly BAS as this is the BAS for the tax period in which he becomes aware of the loss of the fuel..

    End of example

    Mistakes

    A mistake on your BAS is different to an adjustment as described in the previous section.

    A mistake occurs when your BAS was not correct when you lodged it. If you realise you have made a mistake on a BAS you must correct it.

    You may need to increase your fuel tax credits – for example, where you used a lower fuel tax credit rate than you were entitled to.

    You may need to decrease your fuel tax credits if you have:

    • made clerical errors – for example, you double-counted some fuel purchases
    • over calculated your eligible quantity of fuel
    • used a higher fuel tax credit rate than you were entitled to
    • claimed fuel tax credits for all fuel acquisitions, instead of only those intended for use in an eligible activity.

    If you meet the rules for correcting mistakes (see below), you can correct a mistake by doing either of the following:

    • increasing your fuel tax credit entitlement in your total at label 7D (Fuel tax credit) on your current BAS
    • decreasing your fuel tax credit entitlement in your total at label 7C (Fuel tax credit over claim) on your current BAS.

    Find out about:

    Rules for correcting mistakes

    If you want to correct mistakes from your previous BAS on your current BAS, some rules apply. These relate to when the mistake occurred and the dollar value of the mistake.

    The value limits apply regardless of whether your entitlement is being increased or decreased. The time limits only apply if your entitlement is being decreased.

    Time limits

    A time limit applies for the correction of mistakes. From the time the mistake occurred (not when it was discovered), you have a limit on the number of subsequent BAS on which you can correct the mistake. If you do not correct the mistake within the time limit, then you will only be able to correct the mistake on the BAS on which the mistake occurred.

    The time limits vary depending on the turnover of your business for GST purposes.

    The time limits for correcting mistakes only apply if your entitlement to fuel tax credits is being decreased.

    Table 2: Time limits for correcting mistakes

    Annual turnover

    Time limit

    Less than $20m

    Up to 18 months, that is:

    • 18 × monthly BAS
    • 6 × quarterly BAS
    • 1 × annual GST return
     

    $20m or more

    Up to three months (3 × monthly BAS)

    Value limits

    The value limit is the maximum dollar amount of corrections you can make on a BAS. You need to work out the net dollar amount of all mistakes from previous BAS that you want to correct on your current BAS.

    The value limit varies depending on the turnover of your business. The limits apply regardless of whether your entitlement is being increased or decreased as a result of correcting the mistake.

    Table 3: Value limits for correcting mistakes

    Annual turnover

    Value limit

    Less than $20m

    Less than $5,000

    $20m to less than $100m

    Less than $10,000

    $100m to less than $500m

    Less than $25,000

    $500m to less than $1b

    Less than $50,000

    $1b or more

    Less than $300,000

    Table 4: Summary of procedures for correcting mistakes

    Type of mistake 

    Are time limits applicable?

    Are value limits applicable?

    If limits are met

    If limits are not met

    Mistakes that increase your fuel tax credit entitlement

    Not applicable

    Yes

    Correct the mistake on your current BAS

    Revise the original BAS on which the mistake occurred

    Mistakes that decrease your fuel tax credit entitlement

    Yes

    Yes

    Correct the mistake on your current BAS

    Revise the original BAS on which the mistake occurred

    Example 6: Correcting mistakes within time and value limits

    Jack operates a transport business with a turnover of $1 million. As a result of clerical errors, he incorrectly over claimed $6,000 in fuel tax credits on his previous two quarterly BAS. Jack had also used the wrong fuel tax credit rate for one of his fuel purchases and claimed $2,900 less than he was entitled to. The net effect of his mistakes was $3,100 ($6,000 − $2,900).

    Correcting these mistakes reduces Jack’s fuel tax credit entitlement so he must consider both the value and time limits.

    Jack can correct the mistakes by including $3,100 at label 7C on his current BAS because the net effect of the mistakes he needs to correct does not exceed the value limit of $5,000 or the time limit of six quarterly BAS.

    End of example

    Mistakes that exceed the time or value limits

    If you become aware of mistakes that exceed the time or value limits, you can only correct these mistakes by revising the original BAS on which the mistake occurred.

    If you revise a previous BAS because you have over claimed fuel tax credits, you will be liable to pay the general interest charge.

    Correcting mistakes on previous or current BAS

    Where the net effect of mistakes from one or more of your previous BAS exceeds your value limit, you must revise those original BAS. In some cases, each of your original BAS must be revised. In other cases, you may only need to revise some of your previous BAS for you to bring the net effect of your remaining mistakes below the value limit.

    Example 7: Correcting mistakes exceeding the value limits

    Amy operates an agricultural business with an annual turnover of $1 million. She incorrectly claimed $11,000 in fuel tax credits on her previous two quarterly BAS.

    The breakdown of her mistakes is:

    • quarter ended 31 March 2012 – $5,000  
    • quarter ended 30 June 2012 – $6,000.

    Amy would like to correct the mistakes on her BAS for the quarter ended 30 September 2012 (her current BAS).

    The net value of the mistakes means that Amy’s fuel tax credit entitlement will be reduced. Therefore, she is subject to both the value and time limits. The time limit of six quarterly BAS has not been exceeded. However, her mistakes exceed the value limit of $5,000.

    As the value limit for the correction of mistakes on any BAS is $5,000, Amy can do either of the following:

    • correct each mistake on the original BAS in which the mistake occurred by revising each BAS  
    • correct the $5,000 mistake on her BAS for the quarter ended 30 September 2012 (her current BAS) and revise her original BAS for the quarter ended 30 June 2012 for the $6,000 mistake – being the BAS on which the mistake occurred.

    The general interest charge is payable on any revision to her BAS for the tax periods ended 31 March 2012 and 30 June 2012.

    End of example

    You can request a BAS revision form:

    • electronically (provided you are registered to deal with us online) through the Business Portal
    • through your tax agent
    • by phoning us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.

    Conditions for using the correction of mistakes arrangements

    We have established these arrangements to help you comply with your obligations. However, we are not bound by these arrangements if you misuse them, misrepresent your intentions of fuel use or make unreasonable and unsupportable calculations of your entitlement to fuel tax credits.

    Mistakes you can correct

    You can only use these arrangements to correct mistakes that are genuine and reasonable. They do not apply in circumstances where we think you are deliberately manipulating your affairs to take advantage of the arrangements. If we think this is the case, you will need to go back and revise each BAS on which an error occurred and the general interest charge will apply from the due dates on those BAS. We may also withdraw the right for you to use these arrangements in the future.

    If you establish a regular pattern of correcting mistakes by adjusting your current BAS for amounts that are at the upper end of the correction limits, we may also consider this as an abuse of the arrangements. Where these mistakes are genuine and occur in the normal course of business, you must demonstrate how these mistakes have occurred.

    When a mistake should be corrected

    Corrections decreasing your fuel tax credit entitlement should be made as soon as possible after the mistake is found, either by making the correction in the next BAS or by requesting a revision of the original BAS in which the mistake occurred. We consider you to be taking advantage of the correction arrangements if you deliberately delay the correction of a mistake that decreases your entitlement to fuel tax credits until the last tax period before the time limit runs out.

    What if you are being audited or reviewed?

    If you receive advice from us about our intention to conduct a review, you are not able to apply these arrangements from that date until the review has been finalised. Our advice may be in writing or by phone. We will arrange to revise all relevant BAS to correct any errors uncovered in the review, including any voluntary disclosures notified at the start of, or during the course of, the review. Where any previous BAS is corrected, the general interest charge will apply from the due date of that BAS.

    If you find errors in a previously lodged BAS after we have notified you of a review, it is in your best interests to voluntarily disclose the errors. If you tell us about your mistake it will be taken into account when we consider the application of a penalty.

    If an error is found during your review and it is clear you have made a genuine attempt to comply with your tax obligations, there will be no penalty on the shortfall amount. If the error is within the value and time limits (where applicable) we may allow you to use these arrangements and include the amount in your next BAS. If the error is outside the value or time limits we will revise your fuel tax credit entitlements for the relevant tax period and you will be sent a notice of assessment. The general interest charge may need to be paid on a revision to a BAS for an earlier tax period.

      Last modified: 23 Jul 2013QC 35869