ATO Interpretative Decision

ATO ID 2005/220 (Withdrawn)

Excise

• This ATO ID is withdrawn from the database because it contains a view in respect of the Fuel Sales Grant Act 2000. That Act was repealed with effect from 1 January 2007. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for fuel sales before 1 July 2006.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is an entity able to satisfy the requirements for eligibility for an additional amount of fuel sales grant under subregulation 6(3) of the Fuel Sales Grants Regulations 2000 (the regulations), even if there are no persons who offer fuel of the same kind for sale in comparable locations?

Decision

Yes. An entity is able to satisfy the requirements for an additional amount of fuel sales grant under subregulation 6(3) of the regulations, even if there are no persons who offer fuel of the same kind for sale in comparable locations.

Facts

An entity sells fuel from a fuel site in a remote area.

The entity offered gasoline or diesel fuel for sale at a price not less than $1.21 per litre for a period of four weeks and continued to offer for sale fuel of that kind for not less than $1.20 per a litre.

There are no fuel outlets located nearby to this entity's fuel outlet.

Reasons for Decision

Section 7 of the Fuel Sales Grants Act 2000 (FSGA) provides that you are entitled to a fuel sales grant for the sale of fuel where:

(a)

the sale is in an eligible location; and

(b)

the sale is to the end user of the fuel; and

(c)

the sale is after 30 June 2000.

Subsection 8(1) of the FSGA provides that if you are entitled to a fuel sales grant during a payment period, the amount of the fuel sales grant for the payment period is worked out in accordance with the regulations.

Subregulation 6(2) of the regulations provides that the amount of fuel sales grant in respect of the sale of fuel in a payment period in a remote area is two cents for each litre of the fuel sold in the period, together with any additional amount worked out under subregulation 6(3) of the regulations.

Subregulation 6(3) of the regulations provides that the additional amount is one cent per litre of fuel sold during the payment period if the following conditions are satisfied:

...

(a)

the following conditions apply (first claim):

(i)

the claimant offered for sale fuel of that kind for not less than $1.21 for a litre during a period of 4 weeks that ended immediately before making the claim for the additional amount; and

(ii)

immediately after making the claim:

(A)

the claimant has continued to offer for sale fuel of that kind for not less than $1.20 for a litre; and

(B)

fuel of that kind has been offered for sale for not less than $1.20 for a litre by other persons (if any) in comparable locations; or

(b)

the following conditions apply (subsequent claim):

(i)

the claimant has made a previous claim under paragraph (a); and

(ii)

since making that claim:

(A)

the claimant has continued to offer for sale fuel of that kind for not less than $1.20 for a litre; and

(B)

fuel of that kind has been offered for sale for not less than $1.20 for a litre by other persons (if any) in comparable locations.

Paragraph (a) of subregulation 6(3) of the regulations provides various tests in relation to the sale of fuel during the 4 week period to which an entity's claim relates. Paragraph (b) of subregulation 6(3) provides various tests in relation to the sale of fuel following the 4 week period. One requirement common to both paragraphs (a) and (b) (set out in sub-subparagraphs 6(3)(a)(ii)(B) and 6(3)(b)(ii)(B)) is that fuel of the kind to which the claim relates was offered for sale for not less than $1.20 per litre by other persons (if any) in comparable locations.

A comparable location, in relation to the location at which an entity sells fuel, is defined in subregulation 6(4) of the regulations as a location that is 'nearby' and to which the fuel is transported at a similar cost. In this instance, there are no fuel outlets located nearby to this entity's fuel outlet.

The Explanatory Memorandum to the Fuel Sales Grant Bill 2000 explained that Parliament's intention was to pay higher rates of fuel grant for fuel sold in remote areas (and thereby reduce the cost of fuel to the public and business in those areas).

Residents of remote areas will often have only one fuel outlet available to them. Parliament's intention of providing a higher grant to fuel outlets located in remote areas would not be fulfilled in these instances if a condition of payment was that the relevant fuel outlet must have nearby competitors. Accordingly, the term 'if any' in the above test is interpreted as meaning that if there are no fuel outlets nearby to an entity's outlet, this test will not apply. However, if there are any fuel outlets located nearby to the entity's outlet, it will be necessary for the other fuel outlets to sell fuel for a price of at least $1.20 per litre.

In this case there are no fuel outlets in comparable locations because there are no fuel outlets located nearby to the entity's outlet. Therefore, the tests in sub-subparagraphs 6(3)(a)(ii)(B) and 6(3)(b)(ii)(B) of the regulations are satisfied. The entity will be eligible for an additional amount of fuel sales grant under subregulation 6(3) of the regulations provided it meets the remaining tests.

Legislative References:
Fuel Sales Grants Act 2000
   Section 7
   Subsection 8(1)

Other References:
The Explanatory Memorandum to the Fuel Sales Grant Bill 2000

Keywords
Excise payments
FSGS remote zone premium
Fuel sales grants scheme

Business Line:  Excise

Date of publication:  29 July 2005

ISSN: 1445-2782