ATO Interpretative Decision
ATO ID 2007/55 (Withdrawn)
Excise
Fuel Tax Credits: GST groups and membership of approved environmental programmesFOI status: may be released
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This ATO ID is withdrawn from the database because Division 45 of the Fuel Tax Act 2006 (FTA) was repealed with effect from 1 July 2009. Pursuant to amendments under Tax Laws Amendment (2009 Measures No. 2) Act 2009 (No. 42, 2009) an entity that was not a member of the Greenhouse Challenge Plus Programme (GCCP) was deemed to be a member of the GCPP immediately prior to its termination. Under section 105-55 in Schedule 1 to the Taxation Administration Act 1953 (TAA 1953), the entity will then have four years from the end of the tax period ending 30 June 2009 to make this adjustment - which will remain an adjustment for the June 2009 tax period.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the representative member of a goods and services tax (GST) group required to be a member of a relevant programme for the purposes of section 45-5 of the Fuel Tax Act 2006 (FTA), for the GST group to claim fuel tax credits in excess of $3 million in a financial year?
Decision
Yes. The representative member of a GST group is required to be a member of a relevant programme for the purposes of section 45-5 of the FTA for the GST group to claim fuel tax credits in excess of $3 million in a financial year.
Facts
An entity is registered for GST, and is the representative member of a GST group approved under section 48-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Not all of the members of the GST group use taxable fuel for purposes giving rise to entitlements to fuel tax credits.
The group wishes to claim fuel tax credits exceeding $3 million in a financial year.
Reasons for Decision
Subsection 70-5(1) of the FTA provides that where entities have formed a GST group, as approved under section 48-5 of the GST Act, they are to be treated as a single entity for the purposes of the fuel tax law.
Section 45-5 of the FTA provides that an entity will not be entitled to more than $3 million in fuel tax credits in a financial year unless the entity is a member of the Greenhouse Challenge Plus Programme (GCPP) or another programme determined, by legislative instrument, by the Environment Minister for the purposes of that section.
Given the effect of subsection 70-5(1) of the FTA, it follows that where a GST group exists, the limitation imposed on entitlements by section 45-5 of the FTA applies to the members of the GST group as a collective. Therefore, the GST group must not take into account, in a financial year, a total of more than $3 million of fuel tax credits without having membership of a relevant programme.
The mechanics of how section 70-5 of the FTA applies to GST groups is explained in paragraph 2.104 of the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006, which provides that:
As a GST group is treated as a single entity for fuel tax purposes, the $3 million threshold for entities operating within an approved group, will be calculated as the sum of fuel tax credits received by the group as a whole. If the criterion applies, then the group member claiming fuel tax credits on behalf of the group (as the representative member of the group) will be required to join the GCP Programme and enter into a GCP agreement on behalf of all entities within the group in order to be entitled to payment of fuel tax credits.
Accordingly, the representative member and all members of the GST group must be covered by a GCCP or any other relevant programme membership. By entering into an appropriate agreement, which accommodates the particular structure of the GST group, the representative member is effectively making the membership applicable to all members of the GST group, and thereby satisfying the requirements of section 45-5 of the FTA.
The representative member's role in entering into an agreement on behalf of all the members of the GST group is also consistent with subsection 70-5(2) of the FTA, which provides that where entities form a GST group, the representative member has all the rights, powers and obligations of the GST group under the fuel tax law.
In this case, as the group wishes to claim fuel tax credits exceeding $3 million in a financial year, the representative member must become a member of a relevant programme for the purposes of section 45-5 of the FTA.
Date of decision: 9 March 2007
Legislative References:
Fuel Tax Act 2006
section 45-5
section 70-5
section 48-5
Keywords
Excise
Excise offsets
FTC environmental measures
FTC Greenhouse Challenge Plus Program
Fuel tax credits
GST groups
Single entity
ISSN: 1445-2782
| Date: | Version: | |
| 9 March 2007 | Original statement | |
| You are here | 8 February 2010 | Archived |
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