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Edited version of your private ruling

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Ruling

Subject: Fuel tax credits - forklift - loading and unloading

Question 1:

Are you entitled to claim a fuel tax credit for diesel fuel you acquire and use in your forklift to load and unload goods from your trucks for tax periods after 1 July 2012?

Answer:

Yes.

Question 2:

Are you required to claim your claim fuel tax credits via your business activity statement?

Answer:

Yes.

This ruling applies for the following periods:

2012-13 income year

2013-14 income year

2014-15 income year

The scheme commences on:

1 July 2012

Relevant facts and circumstances

You operate a transport business. As part of your business operations, you use a forklift to load and unload goods from trucks.

Your forklift is not registered for on-road use.

You acquire diesel fuel for use in the forklift which is used off-road to load and unload trucks in the loading yard.

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

Relevant legislative provisions

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 43-5

Fuel Tax Act 2006 section 43-8

Fuel Tax Act 2006 subsection 43-8(4)

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.

Section 43-5 of the FTA provides the amount of the fuel tax credit to which you are entitled for taxable fuel is the amount of effective fuel tax that is payable on the fuel less the amount of carbon reduction (if applicable).

Carbon reduction

Section 43-8 of the FTA sets out the rules for working out the amount of the carbon reduction to fuel tax credit calculations from 1 July 2012.

It provides that the amount of carbon reduction that applies to a particular quantity of taxable fuel is worked out using the following formula:

Quantity of fuel x carbon price x carbon emission rate

Circumstances where the carbon reduction does not apply

Subsection 43-8(4) of the FTA provides for those circumstances where the amount of carbon reduction is nil. That is, where the fuel is acquired for use:

in specified activities within agriculture, fishing operations or forestry; or

in vehicles with a gross vehicle mass (GVM) of more than 4.5 tonnes travelling on a public road; or

otherwise than for combustion.

The amount of carbon reduction that applies to the fuel will also be nil if covered by the Opt-in-Scheme from 1 July 2013.

Off-road use of fuel in forklift

You state that your forklift is not registered for on-road use and is used for the single purpose of loading and unloading goods from trucks in a loading yard.

As such, diesel fuel is being used in the forklift exclusively off-road and none of the above mentioned exceptions apply.

Therefore, whilst an entitlement to a fuel tax credit entitlement for this activity arises under section 41-5 of the FTA, the amount of fuel tax credit for which you are entitled is subject to the carbon reduction as described above.

In relation to diesel fuel, the carbon reduction is equal to the quantity of diesel fuel multiplied by the carbon emission rate of 0.0027, multiplied by the carbon price. The carbon price for the year starting on 1 July 2012 is 2,300 cents and this amount will rise to 2,415 cents for the year starting 1 July 2013 and 2,540 cents for the year starting 1 July 2014.

Accordingly, you are entitled to claim a fuel tax credit for diesel fuel used in your forklift to load and unload goods from your trucks for tax periods after 1 July 2012.

Claiming fuel tax credits

You calculate your fuel tax entitlement by working out the number of eligible litres for each relevant business activity, multiplied by the applicable fuel tax credit rate.

Once you have calculated your fuel tax credit entitlement, you can claim this on your business activity statement (BAS) similar to the way in which you claim GST credits. You record your fuel tax credit entitlement for the relevant tax period at label 7D.

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