ATO Interpretative Decision

ATO ID 2007/83 (Withdrawn)

Excise

Fuel Tax: Transitional - energy grants claimed under the Fuel Tax Act 2006 and adjustments
FOI status: may be released

This ATO ID is withdrawn from 1 July 2013, the date from which Item 9 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 can no longer be relied on to attribute a decreasing fuel tax adjustment. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of the tax period ending 30 June 2009.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Does an entity have an increasing fuel tax adjustment, pursuant to Division 44 of the Fuel Tax Act 2006 (FTA), when they have a decreasing fuel tax adjustment pursuant to item 9 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (Fuel Tax Transitional Act) and they subsequently use the fuel for a purpose that would not have entitled them to an on-road or off-road credit under the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?

Decision

Yes. An entity, has an increasing fuel tax adjustment when they have a decreasing fuel tax adjustment pursuant to item 9 of Schedule 3 to the Fuel Tax Transitional Act, and they subsequently use the fuel for a purpose that would not have entitled them to an on-road or off-road credit.

Facts

An entity purchased on-road diesel fuel between 1 July 2003 and 30 June 2006 and was entitled to an on-road credit under the EGCSA.

The entity has not previously made a claim for payment of an energy grant in relation to the fuel under section 15 of the Product Grants and Benefits Administration Act 2006 (PGBAA).

The entity included the amount of the credit as a decreasing fuel tax adjustment in their business activity statement for a tax period that ends before 1 July 2009.

The entity subsequently used the relevant fuel for a purpose for which it would not have been entitled to an on-road or off-road credit under the EGCSA.

Reasons for Decision

Subitem 9(1) of Schedule 3 to the Fuel Tax Transitional Act provides that an entity has a decreasing fuel tax adjustment if it would otherwise have been able to claim an energy grant in respect of fuel purchased between 1 July 2003 and 30 June 2006, provided they have not made a claim for the energy grant under the PGBAA.

Divisions 41-A and 42 of the FTA provide that entities have an entitlement to a fuel tax credit for taxable fuel that they acquire, import into Australia or manufacture to the extent they do so for certain purposes. This entitlement to a fuel tax credit arises at the time of acquisition, importation or manufacture so an entity must estimate the extent of their entitlement.

If the entity's ultimate use of the fuel, if known at the time of acquisition, importation or manufacture, would have resulted in a different entitlement to fuel tax credits, subsection 44-5(1) of the FTA provides that the entity has a fuel tax adjustment. Fuel tax adjustments can be either increasing fuel tax adjustments or decreasing fuel tax adjustments.

The scope of subsection 44-5(1) of the FTA is broadened by subitem 9(4) of Schedule 3 to the Fuel Tax Transitional Act, which provides that if an entity has a decreasing fuel tax adjustment under item 9, then Division 44 of the FTA applies as if the reference to a fuel tax credit were instead a reference to an on-road credit or an off-road credit as the case requires.

When subitem 9(4) of Schedule 3 to the Fuel Tax Transitional Act is read in conjunction with subsection 44-5(1) of the FTA, the entity has a fuel tax adjustment if the on-road credit that it claimed (in the form of a decreasing fuel tax adjustment) is higher or lower than the on-road credit to which it would have been entitled based on its actual use of the fuel.

As the decreasing fuel tax adjustment attributed by the entity in respect of its on-road credit entitlement has subsequently been found to be higher than the on-road credit to which the entity would have been entitled based on the actual use of the fuel, the entity has an increasing fuel tax adjustment.

Date of decision: 23 April 2007

Legislative References:
Fuel Tax Act 2006
   Division 44
   section 44-5
   subsection 44-5(1)
   subsection 44-5(4)

Fuel Tax (Consequential and Transitional Provisions) Act 2006
Schedule 3 Item 9
Schedule 3 Subitem 9(4)

Product Grants and Benefits Administration Act 2000
section 15

Energy Grants (Credits) Scheme Act 2003
EG(C)S03

Keywords
FTC attribution rules for fuel tax credit
FTC fuel tax adjustment
Increasing fuel tax amount

Business Line: Indirect Tax

Date of publication: 4 May 2007

ISSN: 1445-2782

history

	Date:	Version:
	23 April 2007	Original statement
You are here	24 October 2014	Archived

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