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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012472096245

Ruling

Subject: Fuel Tax Credits - Use of petrol in aircraft

Question 1

Are you entitled to fuel tax credits for taxable fuel (petrol) you acquire and use in your aircraft as part of carrying on your enterprise?

Answer

Yes.

Question 2

Are you entitled to fuel tax credits at the full rate of 38.143 cents per litre (CPl) for the petrol you acquire and use in your aircraft as part of carrying on your enterprise?

Answer

No. The rate of fuel tax credits you can claim for the relevant tax periods are:

1 July 2012 to 30 June 2013 - 32.623 cpl

1 July 2013 to 30 June 2014 - 32.347 cpl

1 July 2014 to 30 June 2015 - 32.047 cpl.

This ruling applies for the following periods:

1 July 2012- 13 income year

1 July 2013-14 income year

1 July 2014-15 income year

The scheme commences on:

1 July 2012

Relevant facts and circumstances

You are registered for goods and services tax (GST)

You provide services and have acquired an aircraft in order to service your clients located in remote locations.

You acquire petrol for use in the aircraft. The fuel is purchased through small retail outlets, which primarily consists of service stations.

Your invoices for the fuel do not show the amount of excise duty paid but include the number of litres purchased, price per litre and total cost. You advised that the fuel is purchased at the going market rate for normal commercial transactions.

Assumption(s)

The petrol you acquire for use in your aircraft is not fuel that was entered into home consumption [domestic market] for use as fuel in an aircraft.

The fuel you acquire is not covered by the Opt-in Scheme from 1 July 2013.

Relevant legislative provisions

Fuel Tax Act 2006 41-5

Fuel Tax Act 2006 section 41-30

Fuel Tax Act 2006 subsection 41-30(1)

Fuel Tax Act 2006 subsection 41-30(2)

Fuel Tax Act 2006 section 43-5

Fuel Tax Act 2006 section 43-8

Fuel Tax Act 2006 subsection 43-8(1)

Fuel Tax Act 2006 section 43-11

Reasons for decision

Question 1 - Entitlement to fuel tax credit

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 for use in carrying on your enterprise, if you are registered for goods and services tax (GST).

Subsection 41-30(1) of the FTA states that you are not entitled to a fuel tax credit for taxable fuel you acquire for use as fuel in aircraft if the fuel was entered for home consumption [domestic market] for that use.

You acquire petrol which is a taxable fuel for use in your business. You purchase this from service stations at the going market rate for normal commercial transactions and as such an assumption has been made that this fuel was not entered for home consumption for use as fuel in an aircraft.

Therefore, section 41-30 does not prevent you from being entitled to a fuel tax credit in respect to the petrol you acquire for use in your aircraft.

Accordingly, you are entitled to fuel tax credits for taxable fuel (petrol) you acquire and use in your aircraft as part of carrying on your enterprise.

Note: Subsection 41-30(2) of the FTA provides that subsection 41-30(1) will not apply to exclude you from a fuel tax credit if the fuel is covered by the Opt-in Scheme - applicable from 1 July 2013.

This would not apply to your circumstances as:

Question 2 - Calculating your fuel tax credit

Section 43-5 of the FTA provides that the amount of your fuel tax credit for taxable fuel is the amount worked out based on the amount (but not below nil) of effective fuel tax less the amount of the carbon reduction.

The amount of effective fuel tax that is payable on the fuel is the amount (but not less than nil) of fuel tax less any grant or subsidy. In your case the effective fuel tax is 38.143 cents per litre (cpl).

Subsection 43-8(1) of the FTA provides that the amount of carbon reduction that applies to a particular quantity of fuel you acquire, manufacture or import is calculated using the following formula:

Quantity of fuel x carbon price x carbon emission rate

The carbon emission rate in relation to petrol is 0.0024 and the carbon price for the financial years commencing 1 July 2012, 1 July 2013 and 1 July 2014 is 2,300 cents, 2,415 cents and 2,540 cents respectively.

Accordingly, the amount of the carbon reduction for the periods ending 30 June 2013, 30 June 2014 and 30 June 2015 is 5.52, 5.796 and 6.096 cents per litre respectively.

Therefore, the rate of fuel tax credits you can claim for the relevant tax periods are:

1 July 2012 to 30 June 2013 - 32.623 cpl

1 July 2013 to 30 June 2014 - 32.347 cpl

1 July 2014 to 30 June 2015 - 32.047 cpl.

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