| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1051235012902
Date of advice: 6 April 2018
Ruling
Subject: Fuel tax credits
Question 1:
This ruling concerned whether an entity was entitled to claim fuel tax credits.
The Commissioner ruled that the entity was entitled to claim fuel tax credits for taxable fuel acquired for use in carrying on its enterprise.
Question 2:
The ruling concerned whether the methodology used by an entity to calculate its fuel tax credit entitlement was fair and reasonable.
The Commissioner ruled that the methodology used by the entity to calculate its fuel tax credit entitlement was fair and reasonable provided the methodology reflects the extent to which taxable fuel is acquired for an eligible activity. Notably, where fuel is apportioned, the fuel tax amount of the apportioned fuel should be reflective of the proportion of fuel used in eligible activities with respect to the total quantity of fuel acquired.
Question 3:
The ruling concerned what type of equipment the entity can use for apportioning fuel to calculate its fuel tax credit entitlement and whether the method was fair and reasonable.
The Commissioner ruled that the legislation does not set out any methods that an entity must use to apportion taxable fuel. An entity may use more than one apportionment method for different fuel types, different activities or different types of vehicles, equipment or machinery.
However any method used to apportion fuel needs to be reviewed to determine if there are any circumstances that may distort results, (for example, acquisitions or events requiring a larger quantity of fuel usage) and to ensure the method does not apportion more taxable fuel than the entity has acquired.
Question 4:
The ruling concerned what was a fair and reasonable method for calculating a fuel tax credit entitlement for apportioned fuel where fuel is acquired and the amount of duty paid on its temperature corrected (15° Celsius) measured volume is known.
The Commissioner ruled that where fuel is apportioned, the fuel tax amount of the apportioned fuel should be reflective of the proportion of fuel used in eligible activities with respect to the total quantity of fuel acquired. Any method in which the amount of fuel tax credit claimed did not exceed the fuel tax amount calculated using the volume of apportioned fuel corrected to 15° Celsius would be fair and reasonable.
This ruling applies for the following periods:
2015 - 2016 income year
2016 - 2017 income year
2017 - 2018 income year
The scheme commences on:
1 July 2015
Relevant legislative provisions
Fuel Tax Act 2006 section 2-1
Fuel Tax Act 2006 section 41-5
Fuel Tax Act 2006 Subdivision 41-B
Fuel Tax Act 2006 Division 43
Fuel Tax Act 2006 subsection 43-5(1)
Fuel Tax Act 2006 subsection 43-5(2)
Fuel Tax Act 2006 subsection 43-5(2A)
Fuel Tax Act 2006 section 43-10
Fuel Tax Act 2006 section 43-6
Fuel Tax Act 2006 Division 70
Fuel Tax Act 2006 section 70-5
Fuel Tax Act 2006 section 110-5
Excise Act 1901 section 4
Excise Act 1901 subsection 54(1)
Excise Act 1901 section 65
Excise Tariff Act 1921 Schedule 1
Customs Tariff Act 1995 section 9
Customs Act 1901
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
