ATO Interpretative Decision
ATO ID 2007/30 (Withdrawn)
Excise
Excise: fuel tax credits - calculation of effective fuel taxFOI status: may be released
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This ATO ID is withdrawn from 1 July 2015, the date the Energy Grants (Cleaner Fuels) Scheme Act 2004 was repealed. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of a cleaner fuel grant for the period the Act was in force 18 September 2003 up to and including 30 June 2015.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is an amount of cleaner fuel grant taken into account in determining the effective fuel tax under subsection 43-5(2) of the Fuel Tax Act 2006 (FTA) for a quantity of fuel that is a cleaner fuel even though a claim for a cleaner fuel grant has not been made in respect of the fuel?
Decision
Yes. An amount of cleaner fuel grant is taken into account in determining the effective fuel tax under subsection 43-5(2) of the FTA for a quantity of fuel that is a cleaner fuel even though a cleaner fuel grant has not been made in respect of the fuel.
Facts
An entity manufactured a quantity of biodiesel for its own use.
The entity used the fuel for a purpose that would entitle it to a fuel tax credit.
Excise duty was paid on the fuel at a rate of 38.143 cents per litre.
The biodiesel complies with the applicable fuel standard and the entity has a provisional entitlement to a cleaner fuel grant under the Energy Grants (Cleaner Fuels) Scheme Act 2003 (EGCFSA) for the quantity of fuel.
The entity has not claimed the cleaner fuel grant in relation to the biodiesel.
Reasons for Decision
Subsection 43-5(1) of the FTA states that the amount of any fuel tax credit payable on fuel is based on the amount of effective fuel tax that is payable on the fuel.
Under subsection 43-5(2) of the FTA, the amount of 'effective fuel tax' is calculated using a formula that reduces the 'fuel tax amount' by the amount of any 'grant or subsidy that was or would be payable in respect of the fuel by the Commonwealth', at the rate in force at the beginning of the tax period to which the credit is attributed.
The need to take account of grants and subsidies is focused on the fuel and whether a grant could attach to the fuel regardless of any other requirements that may need to be fulfilled for an entity to be paid a grant or subsidy.
In this case the entity manufactures a fuel which meets the definition of biodiesel under the EGCFSA. Under the EGCFSA a cleaner fuels grant is payable for biodiesel. There are other requirements that must be fulfilled before a cleaner fuels grant is paid however these are not in respect of the fuel rather they are in respect of the particular entity, for example the requirement to register and claim. Subsection 43-5(2) of the FTA is focused on the fuel so fuel that is a cleaner fuel under the EGCFSA is therefore a fuel in respect of which a grant 'was or would be payable.'
Therefore, an amount equal to the cleaner fuel grant must be subtracted in determining the amount of effective fuel tax on a quantity of fuel that is a cleaner fuel, notwithstanding that a claim for the cleaner fuel grant has not been made in respect of the fuel.
Date of decision: 6 February 2007
Legislative References:
Fuel Tax Act 2006
subsection 43-5(1)
subsection 43-5(2)
Keywords
FTC effective fuel tax
FTC fuel tax
Fuel tax credits
ISSN: 1445-2782
| Date: | Version: | |
| 6 February 2007 | Original statement | |
| You are here | 3 July 2015 | Archived |