ATO Interpretative Decision
ATO ID 2008/47
Excise
Fuel tax credits and measuring instruments for fuelFOI status: may be released
-
With effect from 1 July 2015, the term 'Australia' is replaced in nearly all instances within the Fuel Tax legislation with the term 'indirect tax zone' by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015. The scope of the new term, however, remains the same as the repealed definition of 'Australia' used in those Acts.
This ATO ID has been amended by replacing the reference to 'relevant State trade measurement legislation' with 'relevant trade measurement legislation' and replacing reference to FTD 2006/1 with FTD 2010/1.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
For the purposes of working out the amount of fuel in respect of which you are entitled to a fuel tax credit under the Fuel Tax Act 2006 (FTA), are you required by the FTA or the Tax Office to use a measuring instrument approved for trade use by the National Measurement Institute and certified in accordance with the relevant trade measurement legislation?
Decision
No. For the purposes of working out the amount of fuel in respect of which you are entitled to a fuel tax credit under the FTA, you are not required by the FTA or the Tax Office to use a measuring instrument approved for trade use by the National Measurement Institute and certified in accordance with the relevant trade measurement legislation?
Facts
You acquire fuel in Australia for use in carrying on your enterprise.
You dispense varying quantities of fuel from a tank into several different vehicles by using metering equipment. The equipment is not approved for trade use by the National Measurement Institute nor certified in accordance with the relevant trade measurement legislation?
You use the records of the quantities of fuel metered into the vehicles to enable you to apportion the fuel between multiple uses. Those uses include uses for which you claim a fuel tax credit.
Reasons for Decision
The FTA provides for the payment of fuel tax credits to ensure that, generally fuel tax is effectively only applied to:
- (a)
- fuel used in private vehicles and for certain other private use; and
- (b)
- fuel used on-road in light vehicles for business purposes.
Section 41-5 of the FTA of the states:
You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacturer in, or import into, Australia to the extent that you do so for use in carrying on your enterprise.
For the purposes of working out your entitlement to a fuel tax credit, the FTA does not specify any method or equipment to calculate the quantity of taxable fuel that you acquire for use in carrying on your enterprise.
In Fuel Tax Determination FTD 2010/1, about calculation methods, the Commissioner has determined that you can use any fair and reasonable method to work out the quantity of fuel for use in carrying on your enterprise.
You need to keep records that detail how the quantity of fuel was worked out in order to show that your method is fair and reasonable and appropriate to your circumstances.
What is fair and reasonable depends on the circumstances, but trade measurement legislation requirements do not limit what is fair and reasonable for the purposes of the FTA. Measuring equipment approved for trade use and certified in accordance with state or national trade measurement legislation can support a method of working out the quantity of fuel used in carrying on your enterprise, and may be one type of measuring equipment that provides a fair and reasonable basis for calculating your entitlement to a fuel tax credit.
Other measuring equipment not so certified may also provide a fair and reasonable basis for calculating your entitlement to a fuel tax credit. Whether use of such equipment meets the requirements of the relevant trade measurement legislation is a separate matter for the relevant authority to determine.
Date of decision: 20 March 2008
Legislative References:
Fuel Tax Act 2006
section 41-5
Related Public Rulings (including Determinations)
Fuel Tax Determination FTD 2010/1
Keywords
FTC fuel tax
ISSN: 1445-2782