Edited version of private ruling

Authorisation Number: 1011586576306

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Ruling

Subject: Fuel tax credits - waste management

Question 1:

Are you entitled to an on-road credit for the diesel and petrol that you purchase and use in your vehicles, that have a gross vehicle mass (GVM) of less than 4.5 tonnes, when travelling on-road for the period 1 July 2005 to 30 June 2006?

Answer:

No.

Question 2:

Are you entitled to an on-road credit for diesel that you purchase and use in your vehicles that have a GVM of greater than 20 tonnes when travelling on-road or incidental use in relation to the vehicles travelling on-road, for the period 1 July 2005 to 30 June 2006?

Answer:

Yes.

Question 3:

Are you entitled to an off-road credit for the petrol and liquefied petroleum gas (LPG) that you purchase and use in your vehicles undertaking waste management activities for the period 1 July 2005 to 30 June 2006?

Answer:

No.

Question 4:

Are you entitled to an off-road credit for diesel that you purchase and use in your vehicles undertaking waste management activities for the period 1 July 2005 to 30 June 2006?

Answer:

No.

Question 5:

Are you entitled to an off-road credit for diesel that you purchase and use in your generator for electricity generation for your enterprise for the period 1 July 2005 to 30 June 2006?

Answer:

No.

Question 6:

Have you lodged a valid notification, within four years after the end of the tax period, for your entitlement to fuel tax credits for the monthly tax period 1 July 2006 to 31 July 2006, for the purposes of section 105-55 in Schedule 1 to the Tax Administration Act 1953 (TAA)?

Answer:

No. Accordingly, you have no entitlement to fuel tax credits for the period 1 July 2006 to 31 July 2006.

Question 7:

Have you lodged a valid notification, within four years after the end of the tax period, for your entitlement to fuel tax credits for the monthly tax periods from 1 August 2006 to 31 December 2006, for the purposes of section 105-55 in Schedule 1 to the TAA?

Answer:

Yes. The Commissioner requests that you quantify your outstanding claims within three months.

Question 8:

Are you entitled to a fuel tax credit, for the diesel and petrol you acquire and use in vehicles that have a GVM less than 4.5 tonnes, when travelling on public roads for the period 1 August 2006 to 30 June 2012?

Answer:

No.

Question 9:

Are you entitled to a fuel tax credit at the full rate less road user charge (RUC), for the diesel you acquire and use in vehicles that have a GVM greater than 4.5 tonnes when travelling on public roads or incidental use in relation to the vehicles travelling on a public road for the period 1 August 2006 to 30 June 2012?

Answer:

Yes.

Question 10:

Are you entitled to claim a fuel tax credit for the LPG that you use in your vehicles undertaking waste management activities, when not on a public road, for the period 1 August 2006 to 30 June 2011?

Answer:

No.

Question 11:

Are you entitled to a fuel tax credit at the full rate, for the diesel and petrol you acquire and use in your vehicles and equipment, undertaking waste management activities, when not on a public road, for the period 1 August 2006 to 30 June 2012?

Answer:

No.

Question 12:

Are you entitled to a fuel tax credit at the half rate, for the diesel and petrol you acquire and use in your vehicles and equipment that undertake waste management activities, when not on a public road, for the period 1 July 2008 to 30 June 2012?

Answer:

Yes.

Question 13:

Are you entitled to claim a fuel tax credit at the full rate, for the diesel you acquire and use in your generators for electricity generation for your enterprise for the period 1 August 2006 to 30 June 2012?

Answer:

Yes.

This ruling applies for the following periods:

2005-2006 income year

2006-2007 income year

2007-2008 income year

2008-2009 income year

2009-2010 income year

2010-2011 income year

2011-2012 income year

The scheme commences on:

1 July 2005

Relevant facts and circumstances

You conduct waste management activities.

To undertake your waste management activities, you have advised that you use an assortment of vehicles and equipment.

Your vehicles and equipment have various gross vehicle masses; operate on a variety of fuel that includes petrol, diesel and liquefied petroleum gas (LPG); and operate both on (public) roads and not on roads. Equipment and vehicles that operate on LPG were sold before 30 June 2011.

For the period 1 July 2005 to 30 June 2006, none of your vehicles that operated on roads had a GVM of greater then 4.5 tonnes.

You have advised that all your vehicles that travel on public roads are road registered. However, only some of the vehicles that do not travel on public roads have been road registered.

You reported that certain vehicles are over 20 tonnes GVM, and designed to carry goods. These vehicles are used to goods to other sites. You advised that the trucks were not specially modified.

You also stated that that you use the following equipment:

· diesel powered generators used to generate electricity for your enterprise. They are used as back-up power supply.

· a specialised system, acquired after 1 July 2008, that is powered by diesel and relates to one aspect of you business.

You have advised that all your vehicles that travel on public roads satisfy environmental criterion one.

You stated that you acquire all the fuel used in your vehicles and equipment.

You have been registered for goods and services tax (GST).

You identified that you had an entitlement to fuel tax credits in your private ruling application. You indicated your entitlement related to fuel used in off road plant and equipment, and on road vehicles associated with your waste management business.

Relevant legislative provisions

Fuel Tax Act 2006 subdivision 41-B

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 41-20

Fuel Tax Act 2006 section 41-25

Fuel Tax Act 2006 section 43-10(3)

Fuel Tax Act 2006 section 47-5

Fuel Tax Act 2006 subsection 47-10(3)

Fuel Tax Act 2006 section 110-5

Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 1 of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 2 of part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 item 9 of Part 2 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 10(1)(b)(i) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 10(1)(b)(ii) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 10(1)(b)(iii) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 10(5) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 11(1)(b)(i) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 11(1)(b)(ii) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 11(1)(b)(iii) of Part 3 in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(5) in Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(6) in Schedule 3

Energy Grants (Credits) Scheme Act 2003 section 4

Energy Grants (Credits) Scheme Act 2003 section 8

Energy Grants (Credits) Scheme Act 2003 subsection 42(1)

Energy Grants (Credits) Scheme Act 2003 subsection 42(2)

Energy Grants (Credits) Scheme Act 2003 paragraph 42(2)(a)

Energy Grants (Credits) Scheme Act 2003 subsection 43(1)

Energy Grants (Credits) Scheme Act 2003 paragraph 43(1)(a)

Energy Grants (Credits) Scheme Act 2003 section 53

Energy Grants (Credits) Scheme Act 2003 subsection 53(2)

Energy Grants (Credits) Scheme Act 2003 subsection 53(4)

Energy Grants (Credits) Scheme Act 2003 paragraph 53(4)(a)

Energy Grants (Credits) Scheme Act 2003 subparagraph 53(4)(a)(i)

Energy Grants (Credits) Scheme Act 2003 subparagraph 53(4)(a)(ii)

Energy Grants (Credits) Scheme Act 2003 subsection 56(1)

Energy Grants (Credits) Scheme Regulations 2003 regulation 9

Energy Grants (Credits) Scheme Regulations 2003 subregulation 9(3)

Energy Grants (Credits) Scheme Regulations 2003 paragraph 9(3)(a)

Taxation Administration Act 1953 section 105-55 in Schedule 1

Reasons for decision

For the period of this ruling, two different Acts were relevant. For the period 1 July 2005 to 30 June 2006 entitlement was provided under the Energy Grants (Credits) Scheme Act 2003 (EGCSA).

For the period 1 July 2006 to 30 June 2012, entitlement is provided under the Fuel Tax Act 2006 (FTA) and the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (FTCTPA) which provide for the phased implementation of the fuel tax credit system to particular uses of fuel at certain times from 1 July 2006 to 1 July 2012.

Energy grants credits scheme - 1 July 2005 to 30 June 2006

In undertaking your waste management enterprise, you conduct activities on-road and off-road using a variety of vehicles and equipment. These will be examined in turn:

Vehicles with a gross vehicle mass (GVM) less than 4.5 tonnes travelling on-road

You purchase diesel fuel for use in a number of vehicles. These vehicles have a GVM less than 4.5 tonnes.

You also use petrol in vehicles that have a GVM of less than 4.5 tonnes travelling on roads. The type of fuel, namely petrol will be considered in a later discussion.

Subsection 56(1) of the EGCSA states that if you are entitled to an on-road credit, you are entitled to an energy grant.

Subsection 43(1) of the EGCSA provides that you are entitled to an on-road credit if you purchase on-road diesel fuel for:

…

(a) use in a registered vehicle that has a gross vehicle mass of 4.5 tonnes or more, but less than 20 tonnes, where the vehicle is a vehicle for transporting passengers or goods; or

…

The paragraph effectively imposes four requirements. All of these must be satisfied to be eligible:

1. the vehicle must be a registered,

2. the vehicle requires a GVM of 4.5 tonnes or more,

3. the vehicle must be used for transporting passengers or goods, and

4. must use on-road diesel.

You advised that all your vehicles that travel on-road are registered. As such, you satisfy the first requirement.

The second requirement requires the GVM of the vehicle to be 4.5 tonnes or more. You purchase diesel fuel for use in a number of vehicles with a GVM of less than 4.5 tonnes. These operate for various requirements. As the vehicles do not have the required GVM, you do not satisfy the second requirement.

As you have not satisfied the second requirement, it is not necessary to examine any of the subsequent requirements for eligibility.

Accordingly, you are not entitled to an on-road credit for those vehicles that have a GVM of less than 4.5 tonnes when they travel on-road for the period 1 July 2005 to 30 June 2006.

Vehicles with a GVM greater than 20 tonnes travelling on-road

Subsection 42(1) of the EGCSA provides that you are entitled to an on-road credit if you purchase diesel fuel for use in a registered vehicle that has a GVM of 20 tonnes or more, or incidental use in relation to such a vehicle.

However, subsection 42(2) of the EGCSA further limits entitlement to carrying on your enterprise:

…

(a) if the vehicle is a vehicle for transporting passengers or goods - in operating the vehicle on a road in Australia; or

…

You acquired diesel fuel for use in certain trucks. The trucks were road registered and were used on-road to transport goods as part of your waste management enterprise. Each of these trucks had a GVM greater than 20 tonnes; therefore the requirement of 42(1) of the EGCSA is satisfied.

To determine if your vehicles were for transporting passengers or goods, consideration may be given to its design. You have advised that your trucks were designed to transport goods, namely certain items to various locations. Accordingly, your trucks are vehicles for transporting goods for the purposes of subsection 42(2) of the EGCSA.

'Incidental use' in relation to a vehicle is defined in section 8 of the EGCSA. Whether or not it takes place on a road, incidental use in relation to a vehicle includes (but not limited to) powering the vehicle, or auxiliary equipment in or on the vehicle to load and unload goods that have been transported.

Your trucks are used by you to transport goods to other sites where the goods are unloaded.

As such you are entitled to an on-road credit for the use of diesel fuel in your trucks that have a GVM of more than 20 tonnes, in the transportation of your goods when travelling on-road or incidental use, such as loading and unloading goods for the period 1 July 2005 to 30 June 2006.

Off-road - petrol and liquefied petroleum gas (LPG) vehicles

You purchase petrol and LPG for use in vehicles and equipment

Section 53 of the EGCSA provides that you are entitled to an off-road credit if you purchase off-road diesel fuel for a use by you that qualifies.

'Off-road diesel fuel' is defined in section 4 of the EGCSA as diesel fuel or any other like fuel of a kind that is specified in the regulations.

Regulation 9 of the Energy Grants (Credits) Scheme Regulations 2003 (EGCS Regs) sets out the kinds of fuel that are specified and the requirements which must be satisfied for 'off-road diesel fuel' defined in section 4 of the EGCSA. LPG does not meet the specifications of 'off-road diesel fuel' as set out in the EGCS Regs. Furthermore, 'petrol' is specifically excluded under paragraph (a) of subregulation 9(3) of the EGCS Regs.

As petrol and LPG do not meet the requirements of 'off-road diesel fuel' as set out in the EGCS Regs, it is not necessary to further consider the activities you undertake off-road using these fuels.

Accordingly, you are not entitled to an off-road credit for the petrol and LPG that you use in you vehicles and equipment undertaking waste management activities for the period 1 July 2005 to 30 June 2006.

Off-road - diesel vehicles

You also undertake various waste management tasks. These activities are undertaken off roads and diesel fuel has been purchased for use in various vehicles of differing GVM ranges.

As mentioned above, section 53 of the EGCSA provides that you are entitled to an off-road credit if you purchase diesel fuel for a use by you that qualifies. Subsections 53(2) to (7) of the EGCSA specifies the uses that qualify for an off-road credit, as follows:

· mining operations or in primary production (otherwise than for the purpose of propelling any vehicle on a public road)

· marine or rail transport

· generation of electricity for use at certain premises

· use in certain industrial processes

· various other uses

· uses other than in an internal combustion engine where the fuel is of a kind specified in the regulations.

You operate vehicles that undertake waste management activities. Your waste management activities are not directly associated with mining or primary production enterprises. Your waste management activities are not a use that qualifies under subsections 53(2) to (7) of the EGCSA.

As such, you are not entitled to an off-road credit for the use of diesel fuel in your vehicles that undertake waste management activities for the period 1 July 2005 to 30 June 2006.

Electricity generation

You purchase diesel fuel for use in powering generators to generate electricity in you waste management enterprise. The generator is used as a back-up for the power supply.

Subsection 53(4) of the EGCSA provides for qualifying uses at certain premises for the generation of electricity. These include residential premises, particular premises (retail service or the provision of hospitality), hospital or nursing homes etc.

Paragraph 53(4)(a) of the EGCSA will be considered and provides that the following use of diesel fuel qualifies for an off-road credit:

…

use at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that:

(i)  has, as its principal purpose, the retail sale of goods or services (other than electricity) or the provision of hospitality; and

(ii) does not have, at those premises, ready access to a commercial supply of electricity;...

This paragraph effectively imposes three requirements for eligibility:

· the diesel fuel must be used at particular premises to generate electricity

· the enterprise must not have, at those premises, ready access to a commercial supply of electricity, and

· the electricity generated must be used in the course of carrying on at those premises, an enterprise that has the principal purpose of the retail sale of goods or services (other than electricity) or provision of hospitality.

You purchase fuel for use in a generator to generate electricity. The first requirement is clearly satisfied.

The second requirement involves ready access to a commercial supply of electricity.

The phrase 'ready access' is not defined in the legislation, but the Explanatory Memorandum to the Diesel Fuel Rebate Scheme Amendment Bill 2002 (the Explanatory Memorandum) says a business would be regarded as having 'ready access' if:

A commercial supply of electricity was present or convenient to the business and immediately available for connection.

The Diesel Fuel Rebate Scheme was the precursor to the EGCSA, and was administered under the Customs Act 1901 and the Excise Act 1901. The Customs Act and the Excise Act both contained similar provisions to that contained in paragraph 53(4)(a) of the EGCSA. Consequently, the Explanatory Memorandum remains relevant.

The Explanatory Memorandum also states:

The amendment does not extend to businesses ... who operate an emergency backup generator.

You use your generator as a back-up for the existing power supply. The electricity supply is 'present' to your enterprise, in terms that you are already connected to it. The Explanatory Memorandum specifically states that entitlement does not extend to businesses in these circumstances.

In other words, you have ready access to a commercial power supply even when temporary disruptions to that supply require a back-up generator to be used.

As you have not satisfied the second requirement for eligibility, it is not necessary to consider the third requirement.

Accordingly, you are not entitled to an off-road credit for the diesel acquired and used in your generator to generate electricity for the period 1 July 2005 to 30 June 2006.

Fuel tax credits - 1 July 2006 to 30 June 2012

Section 41-5 of the FTA provides that you are entitled to a fuel tax credit for taxable fuel that you acquire in Australia to the extent you do so for use in carrying on your enterprise, if you are registered for GST. However, this entitlement is affected by Divisions 1 and 2 of Part 3 in Schedule 3 to the FTCTPA which operate to restrict this entitlement to specific activities for fuel purchased between 1 July 2006 and 30 June 2012.

Notification of fuel tax credit entitlement

Section 47-5 of the FTA states that you cease to have an entitlement to a fuel tax credit to the extent that you have not taken them into account in working out your net fuel amount during the period of four years after the day on which you were required to give the Commissioner a return for a tax period.

However, subsection 47-10(3) of the FTA provides that you do not cease to be entitled to a fuel tax credit under section 47-5 of the FTA if you give the Commissioner notice not later than 4 years after the end of the tax period to which the credit would be attributable.

The Commissioner's view on the requirements for a valid notification under section 105-55 in Schedule 1 to the TAA is expressed in Miscellaneous Taxation Ruling MT 2009/1 Miscellaneous taxes: notification requirements for an entity under section 105-55 of Schedule 1 to the Taxation Administration Act 1953.

The requirements set out in MT 2009/1 for a valid notification are that it should:

· assert that you have an entitlement

· provide a description of the nature of entitlement which is sufficient to bring to the Commissioner's attention the basic factual and legal basis for the entitlement , and

· specify the tax periods or importation

MT 2009/1 also states that a valid notification should be in writing, must be received on or before the fourth anniversary of the end of the relevant tax period, and will only be valid from the date when sufficient information to meet the requirements of a valid notification is received.

Further, MT 2009/1 states the Commissioner's practice is to ask that within three months the entity quantify the claim or provide an explanation why further time is required.

Your private ruling application, dated and received after 31 July 2010 , indicated that you had an entitlement to fuel tax credits associated with fuel used in off-road plant and equipment, and registered vehicles travelling on roads associated with your waste management business.

You provided the tax period 1 July 2005 to 30 June 2012 for the private ruling as well as asserted that you have the required documentation to make a claim. You confirmed the information in the telephone conversation at a later date.

As such, we have considered that you lodged a valid notification to the Commissioner for the purposes of section 105-55 in Schedule 1 to the TAA after 31 July 2010.

Accordingly, you have lodged your valid notification of entitlement within four years after the end of the tax period for 1 August 2006 to 31 December 2006.

However, you have not lodged the valid notification of entitlement for fuel tax credits within four years after the end of the tax period for the 1 July 2006 to 31 July 2006 business activity statement. The time limitation required the valid notification to be received on or before 31 July 2010.

Therefore, you do not have an entitlement to fuel tax credits for the period 1 July 2006 to 31 July 2006. This limitation will be reflected in the following fuel tax credit entitlement considerations.

Vehicles less than 4.5 tonnes GVM travelling on a public road

Section 41-20 of the FTA states that you are not entitled to a fuel tax credit if the fuel is for use in a vehicle with a GVM of 4.5 tonnes or less travelling on a public road.

You acquire petrol and diesel for numerous vehicles. These vehicles travel on public roads and have a GVM of less than 4.5 tonnes.

As such, you are not entitled to a fuel tax credit for the petrol or diesel you acquire and use in these vehicles when they are travelling on public roads for the period 1 August 2006 to 30 June 2012.

Vehicles greater than 4.5 tonnes GVM travelling on a public road

Subparagraphs 10(1)(b)(i), 10(1)(b)(ii), 11(1)(b)(i) and 11(11(b)(ii) of Part 3 in Schedule 3 to the FTCTPA provide an entitlement to a fuel tax credit under section 41-5 of the FTA for taxable fuel that you acquire and use in a vehicle travelling on a public road or incidental use in relation to that vehicle travelling on a public road for the period 1 July 2006 to 30 June 2012.

Incidental use for the purpose of subparagraphs 10(1)(b)(ii) and 11(1)(b)(ii) of Part 3 in Schedule 3 to the FTCTPA has the meaning of section 8 of the EGCSA which was explained previously.

However, sections 41-20 and 41-25 of the FTA state that you are not entitled to a fuel tax credit for the fuel used in vehicles that have a GVM of 4.5 tonnes or less, or do not meet certain environmental criteria.

You operate trucks with a GVM of greater than 4.5 tonnes, travelling on public roads to transport goods and, some of these vehicles load and unload these goods on sites. You have also advised that your vehicles satisfy the environmental criteria. Accordingly, you satisfy subparagraphs 10(1)(b)(i), 10(1)(b)(ii), 11(1)(b)(i) and 11(11(b)(ii) of Part 3 in Schedule 3 to the FTCTPA.

As you satisfy the relevant requirements of the FTCTPA, you are entitled to a fuel tax credit under the FTA for the use of diesel in your trucks for the period 1 August 2006 to 30 June 2012.

The fuel tax credit rate you are entitled to claim depends on whether you are subject to the road user charge (RUC).

Subsection 43-10(3) of the FTA provides that an entity's fuel tax credit is reduced by the RUC if they acquire taxable fuel for use in a vehicle travelling on a public road.

As such, you are entitled to a fuel tax credit at the full rate less the RUC for the fuel acquired and used in your vehicles that have a GVM greater than 4.5 tonnes when travelling on public roads or incidental use in relation to that vehicle travelling on a public road for the period 1 August 2006 to 30 June 2012.

Waste management activities - LPG vehicles

As previously stated, section 41-5 of the FTA provides that you are entitled to a fuel tax credit for taxable fuel that you acquire for use in carrying on your enterprise if you are registered for GST. 

For an entitlement to a fuel tax credit under the FTA you must first acquire taxable fuel and then use it in an eligible activity in carrying on your enterprise.

Section 110-5 of the FTA defines taxable fuel to mean fuel in respect of which duty is payable. Section 110-5 states:

taxable fuel means fuel in respect of which duty is payable under:

· the Excise Act 1901 and the Excise Tariff Act 1921; or

· the Customs Act 1901 and the Customs Tariff Act 1995;

but does not include fuel covered by:

· item 15, 20 or 21 of the Schedule to the Excise Tariff Act 1921; or

· any imported goods that would be classified to item 15 of the Schedule to the Excise Tariff Act 1921, if the goods had been manufactured in Australia…

You conduct a waste management enterprise that has vehicles that operate on LPG.

To be entitled to claim a fuel tax credit for LPG it must be a taxable fuel under section 110-5 of the FTA. LPG is not classified within the Schedule to the Excise Tariff Act 1921, nor is it a product on which excise duty is payable under the Excise Act 1901.

Unlike diesel fuel where a duty of 38.143 cents per litre is paid and is reflected in the price of the diesel fuel, there is no duty payable on LPG at this stage. As such, LPG is not a taxable fuel.

Accordingly, you are not entitled to claim a fuel tax credit for the LPG that is not a taxable fuel that you use in your vehicles undertaking waste management activities for the period 1 August 2006 to 30 June 2011.

Waste management activities - diesel and petrol vehicles, and specialised system

Subitems 10(5) and 11(5) of Part 3 in Schedule 3 to the FTCTPA state that you are not entitled to a fuel tax credit under the FTA unless you would have been entitled to an off-road credit under the EGCSA.

You undertake various waste management tasks. These activities are undertaken off road, with petrol and diesel fuel purchased for use in various vehicles of differing GVM ranges. As previously determined, you are not entitled to an off-road credit under the EGCSA for the waste management activities you undertake as they are not a use that qualifies under subsections 53(2) to (7) of the EGCSA.

You acquire diesel fuel for use in a specialised system that was acquired after 1 July 2008. The system is part of your waste management activities at a certain site. As discussed previously, there are certain qualifying uses eligible for off-road credits, for example, mining, agriculture etc. Waste management activities that require the use of the specialised system are not a qualifying use under subsections 53(2) to (7) of the EGCSA. As such, you are not entitled to an off-road credit under the EGCSA for fuel acquired and used in this equipment to undertake your waste management activities.

Accordingly, you are not entitled to a fuel tax credit, at the full rate, for diesel and petrol used in your vehicles and specialised system, undertaking waste management activities, when not on a public road, for the period 1 August 2006 to 30 June 2012.

Activities previously not eligible

Subitem 11(6) of Part 3 in Schedule 3 to the FTCTPA provides an entitlement to a fuel tax credit under section 41-5 of the FTA for taxable fuel from 1 July 2008, if you were not previously entitled to an on-road or an off-road credit. The amount of the credit is half of the amount of the full rate.

This provision is subject to the disentitlement rules of subdivision 41-B of the FTA which disallows a fuel tax credit:

· if another entity was previously entitled to the credit;

· for fuel used in vehicles with a GVM of less than 4.5 tonnes travelling on public roads;

· for fuel used in motor vehicles that do not meet environmental criteria when travelling on a public road; or

· for fuel used in aircraft.

As previously advised, for the period to 30 June 2011, LPG is not a taxable fuel. You would not have an entitlement under subitem 11(6) of Part 3 in Schedule 3 to the FTCTPA.

However, you are entitled to a fuel tax credit at the half rate for the acquisition and use of petrol and diesel for activities which were previously not eligible (with the exception of LPG). The activities that you were previously not eligible for fuel tax credits included:

· vehicles that do not travel on public roads in undertaking waste management activities (i.e.: off-road); and

· your specialised system.

Therefore, you would be entitled to a fuel tax credit at the half rate for diesel and petrol acquired and used in vehicles and equipment in undertaking your various waste management functions.

Electricity generation

Subparagraphs 10(1)(b)(iii) and 11(1)(b)(iii) of Part 3 in Schedule 3 to the FTCTPA provide an entitlement to a fuel tax credit will arise under section 41-5 of the FTA for taxable fuel that you acquire and use in generating electricity.

In the context of the fuel tax provisions, it is the purpose for which the fuel is acquired that is important when deciding whether it was acquired to generate electricity.

Fuel is used for the purpose of generating electricity where the electricity is an end in itself and can in turn be used for any purpose for which electricity is required. This includes fuel used in generating electricity when it is used in a generator to provide power to a business premises and/or a range of equipment.

You acquire diesel for use in generators to generate electricity for your enterprise. The fuel you use in your generators is for the purpose of generating electricity and therefore satisfies subparagraph 11(1)(b)(iii) of Part 3 in Schedule 3 to the FTCTPA.

As such, you are entitled to a fuel tax credit at the full rate for the fuel you acquire and use to generate electricity for your enterprise for the period 1 August 2006 to 30 June 2012.

Unclaimed on-road credits under the Energy Grants Credits Scheme

As stated above, for the period 1 July 2005 to 30 June 2006, you are entitled to claim an on-road credit for the diesel that you acquired and used in your three vehicles that were designed to carry goods and that had a GVM of 20 tonnes or more when they travelled on road.

Item 9 of Part 2 in Schedule 3 to the FTCTPA provides that you have a decreasing fuel tax adjustment if:

· you purchased or imported on-road diesel fuel or off-road diesel fuel between 1 July 2003 and 30 June 2006 (inclusive); and

· you were entitled to an on-road credit or an off-road credit in respect of the fuel; and

· you have not made a claim for payment of an energy grant under section 15 of the Product Grants and Benefits Administration Act 2000.

In order to claim a decreasing fuel tax adjustment under item 9 of Part 2 in Schedule 3 to the FTCTPA you must attribute amounts to a tax period of your choice that ends before 1 July 2009,.

For the period 1 July 2005 to 30 June 2006 you were entitled to claim an on-road credit for the diesel that you acquired and used in your three trucks that were designed to carry passengers or goods and that had a GVM greater than 20 tonnes travelling on roads. As such, you can attribute the amount for diesel acquired and used by you to one of your monthly business activity statements (BAS) from 1 August 2006 to 30 June 2009.

Note, the four year limit in section 105-55 of Schedule 1 to the Taxation Administration Act 1953 applies. A copy of ATO Interpretative Decision ATO ID 2007/129 Fuel tax credits: business taxpayers and energy grants claimed under the FTA as a decreasing fuel tax adjustment and the 4-year limit is enclosed.

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