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Edited version of private ruling

Authorisation Number: 1011599227967

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Ruling

Subject: Fuel tax credits - tours and 4WD events

Question

Are you entitled to a fuel tax credit for unleaded petrol you acquire for use in vehicles under 4.5 tonnes gross vehicle mass (GVM) for tours and 4WD events on public roads?

Answer

No.

Period the ruling applies to:

2009-2010 income year

2010-2011 income year

Commencement date of scheme:

1 July 2009

Relevant facts and circumstances

Your business activities involve conducting tours and 4WD events on crown land.

You state 99% of your tours and 4WD events are held in remote forests and it is your view they should be classed as private land.

You state that the term "crown land' refers to state forests but that the roads and tracks you use are gazetted for public use.

You state that some of these roads are indicated on maps but not all of them are. Some are considered to be tracks rather than roads.

You have confirmed that your vehicles need to be registered to use the roads. You also state that your vehicles have a gross vehicle mass (GVM) of less than 4.5 tonnes.

You acquire the unleaded petrol used in your vehicles.

You are registered for goods and services tax (GST).

Relevant legislative provisions

Energy Grants (Credits) Scheme Act 2003 subsection 53(1)

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

Fuel Tax Act 2006 41-5

Fuel Tax Act 2006 41-B

Fuel Tax Act 2006 41-20

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

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(1)

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 11(1)(b)(i)

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

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

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

Reasons for decision

Section 41-5 of the Fuel Tax Act 2006 (FTA) provides that you are entitled to a fuel tax credit for taxable fuel that you acquire in Australia to the extent that you do so for use in carrying on your enterprise, if you are registered for GST. However, this entitlement is affected by Division 2 of Part 3 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (FTCTPA) which operates to restrict this entitlement to specific activities for fuel purchased between

1 July 2008 and 30 June 2012, whilst retaining entitlements under the Energy Grants (Credits) Scheme Act 2003 (EGCSA).

The specific items for which an entitlement exists under section 41-5 of the FTA are relevantly listed within subitem 11(1) of Schedule 3 to the FTCTPA.

Subparagraph 11(1)(b)(i) of Schedule 3 to the FTCTPA provides entitlement to a fuel tax credit arises under section 41-5 of the FTA for taxable fuel acquired for use in a vehicle travelling on a public road in carrying on your enterprise.

Public road

Your business activities involve conducting tours and 4WD events on crown land. You acquire unleaded petrol for use in 4WD vehicles with a gross vehicle mass (GVM) under 4.5 tonnes for this purpose.

The roads and tracks you use are gazetted for public use. In determining whether an owner of land has dedicated it as a public road under common law, the following factors may be considered:

Whilst you state that your activities occur within state forests and believe these should be classed as private land, as the roads and tracks you use are gazetted for public use ie: they would have been declared as such, the roads and tracks used by you on crown land would be considered "public roads".

Vehicles

However, subparagraph 11(1)(b)(i) of Schedule 3 to the FTCTPA is subject to a number of disentitlement rules outlined at subdivision 41-B of the FTA.

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

Whilst you acquire taxable fuel (unleaded petrol) for use in vehicles that travel on public roads, your vehicles have a GVM of less than 4.5 tonnes. Therefore, section 41-20 of the FTA applies and you would not be entitled to a fuel tax credit for the use of fuel in a vehicle with a GVM of 4.5 tonnes or less travelling on a public road.

Further, subitem 11(3) of Schedule 3 to the FTCTPA provides that you are entitled to a fuel tax credit if you would have been entitled to an on-road credit under the EGCSA.

As there was no entitlement under the EGCSA for vehicles with a GVM of less than 4.5 tonnes, you would not have been entitled to an on-road credit under the EGCSA. Therefore, subitem 11(3) of the FTCTPA is not satisfied.

Further, subitem 11(5) of Schedule 3 to the FTCTPA provides that you are entitled to a fuel tax credit if you would have been entitled to an off-road credit under the EGCSA.

Subsection 53(1) of the EGCSA states that you are entitled to an off-road credit if you purchase or import into Australia off-road diesel fuel for a use by you that qualifies. Further subsection 53(2) states that use in primary production (other than for the purpose of propelling a road vehicle on a public road), is a use that qualifies. Primary production includes forestry.

However, use of vehicles on a public road is specifically excluded by subsection 53(2) of the EGCSA as outlined above. Accordingly, you would not have been entitled to an off-road credit under the EGCSA. Therefore, subitem 11(5) of the FTCTPA is not satisfied.

Accordingly, you are not entitled to a fuel tax credit for unleaded petrol acquired for use in vehicles under 4.5 tonnes GVM for tours and 4WD events on crown land.

Please note that whilst subitem 11(6) of Schedule 3 to the FTCTPA provides that from 1 July 2008, an entitlement to a fuel tax credit will arise under the FTA if you were not previously entitled to an on-road or an off-road credit, this provision is subject to the disentitlement rules of subdivision 41-B of the FTA which disallows a fuel tax credit for fuel used in vehicles with a GVM of less than 4.5 tonnes travelling on public roads.

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