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Ruling

Subject: Fuel tax credits - road transport - GVM<4.5 tonnes

Question

Are you entitled to fuel tax credits for taxable fuel used in your vehicles with a gross vehicle mass (GVM) of less than 4.5 tonnes for travel on public roads?

Answer: No.

This ruling applies for the following period/s:

1 July 2009 to 30 June 2010

1 July 2010 to 30 June 2011

1 July 2011 to 30 June 2012

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You operate a fleet of vehicles.

It is your view that these vehicles should be described as trucks rather than light vehicles.

The Specifications, which you provided, shows the GVM can be 4.5 tonne or 5.5 tonne.

You provided copies of the registration papers for a sample of your vehicles, which show the GVM to be less than 4.5 tonnes for all of the sample. You have stated that the GVM on the registration papers for all your other vehicles is the same.

You contend that this specific vehicle has a unique ability in which a simple change to the manufacturer compliance plate changes payload ability of the "same" vehicle. The anomaly allows the same vehicle to be both eligible and ineligible for fuel tax credits depending of the plate uses.

You believe it is not the intention of the Fuel Tax Act 2006 to rule the client out of being eligible for fuel tax credits.

You have requested that we assess the vehicles on the basis of the specifications and their day to day use and apply the intention of the Fuel Tax Act 2006 rather than ruling it out based on procedural guidelines.

Relevant legislative provisions

Fuel Tax Act 2006 section 2-1

Fuel Tax Act 2006 paragraph 2-1(a)

Fuel Tax Act 2006 paragraph 2-1(b)

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 41-20

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

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

Fuel Tax (Consequential and Transitional Provisions) Act 2006 item 12 of Part 4 of Schedule 3

Reasons for decision

Section 2-1 of the Fuel Tax Act 2006 (FTA) provides for the overview and purpose of the fuel tax law and states:

This Act provides a single system of fuel tax credits. Fuel tax credits are paid to reduce or remove the incidence of fuel tax levied on taxable fuels, ensuring that, generally, fuel tax is effectively only applied to:

(a) fuel used in private vehicles and for certain other private purposes; and

(b) fuel used on-road in light vehicles for business purposes.

To give effect to this, 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 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.

Subparagraph 11(1)(b)(i) of Part 3 of Schedule 3 to the FTCTPA provides an entitlement to claim a fuel tax credit will arise under section 41-5 of the FTA for taxable fuel acquired between 1 July 2008 and 30 June 2012 for use in carrying on your enterprise, where that fuel is for use in a vehicle travelling on a public road.

However, section 41-20 of the FTA provides 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.

Item 12 of Part 4 of Schedule 3 to the FTCTPA provides that, if you acquired a vehicle before 1 July 2006 that has a GVM of 4.5 tonnes, you are entitled to fuel tax credits for fuel used in that vehicle, notwithstanding section 41-20 of the FTA.

Paragraph 1.35 of the Explanatory Memorandum to the Fuel Tax Bill 2006 states:

The grant available as an on-road credit under the Energy Grants (Credits) Scheme for fuel used in vehicles of 4.5 tonnes is grandfathered by a proposed transitional provision that provides a fuel tax credit to fuel acquired after 30 June 2006 and is used in vehicles of 4.5 tonnes where the vehicle was acquired before 1 July 2006.

Thus the purpose of item 12 of Part 4 of Schedule 3 to the FTCTPA was to provide an ongoing entitlement for those with vehicles of 4.5 tonnes that had been eligible to claim energy grant credits. It is not to provide an entitlement for vehicles of 4.5 tonne purchased after the commencement of the FTA.

Further, paragraph 2.48 of the Explanatory Memorandum to the Fuel Tax Bill 2006 states:

The break point of 4.5 tonnes or less gross vehicle mass aligns the eligibility for fuel tax credits with the additional licensing conditions that must be met in all Australian jurisdictions to drive a vehicle of this mass or greater and the Australian Design Rules for heavy vehicles. In addition, the Heavy Vehicle Charges Determination that establishes the road-user charges for heavy vehicles applies to vehicles over 4.5 tonnes.

The relevant licensing authority in your state divides both driving licence requirements and vehicle registrations between vehicles of 4.5 tonne or less and those greater than 4.5 tonnes.

The GVM of a vehicle is a question of fact to be determined on the available evidence.

The term 'gross vehicle mass' is not defined in the FTA and takes its ordinary meaning, as the gross vehicle mass specified by the authority that registered the vehicle.

The registration papers for your vehicles show that the GVM is less than 4.5 tonnes.

There is no legislative provision that provides for the Commissioner to exercise discretion to rule that a vehicle with a GVM of less than 4.5 tonne has a GVM of greater than 4.5 tonne.

Accordingly, you are not entitled to fuel tax credits for the use of taxable fuel in vehicles with GVM of less than 4.5 tonnes for travel on public roads.

However, where the authority that has responsibility for vehicle registrations accepts that the vehicle should be properly licensed as having a GVM of greater than 4.5 tonnes, then the Commissioner would accept the new registration papers showing that the GVM is greater than 4.5 tonne as evidence.

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