Edited version of private ruling

Authorisation Number: 1011480013531

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Ruling

Subject: Energy grants credits scheme & Fuel tax credits - Arboriculture

Question 1

Are you entitled to an on-road credit for diesel fuel that you purchased and used during the period 1 July 2005 to 30 June 2006 in your vehicles that have a gross vehicle mass (GVM) of less than 4.5 tonnes when travelling on roads?

Answer

No.

Question 2

Are you entitled to an on-road credit for diesel fuel that you purchased and used during the period 1 July 2005 to 30 June 2006 in your vehicle, for carrying passengers or goods, that has a GVM of 4.5 tonnes or more when travelling on roads?

Answer

Yes.

Question 3

Are you entitled to an on-road credit under section 43 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) for fuel used in operating your elevated work platform truck with a GVM of 4.5 tonnes or more on a road, or for any incidental use in relation to it, for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 4

Are you entitled to claim diesel fuel purchased and used in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2005 to 30 June 2006?

Answer

Yes.

Question 5

Are you entitled to claim diesel fuel purchased and used in equipment and machinery in maintaining forestry roads in areas NOT set aside for logging for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 6

Are you entitled to claim an off-road credit for diesel fuel you purchase and use in vehicles and equipment undertaken in and around a metal smelting facility for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 7

Are you entitled to claim an off-road credit for diesel fuel you purchase and use in vehicles and equipment around farm buildings for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 8

Are you entitled to claim an off-road credit for diesel fuel you purchase and use in vehicles and equipment undertaking railway work for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 9

Are you entitled to claim an off-road credit for diesel fuel you purchase and use in vehicles and equipment undertaking work for councils and on private properties for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 10

Are you entitled to claim an off-road credit for petrol you purchase and use in vehicles and equipment undertaking work for your customers for the period 1 July 2005 to 30 June 2006?

Answer

No.

Question 11

Are you entitled to a fuel tax credit at the full rate minus the road user charge for diesel fuel that you acquire and use in your vehicles that have a GVM of less than 4.5 tonnes when travelling on public roads for the period 1 July 2006 to 30 June 2012?

Answer

No.

Question 12

Are you entitled to a fuel tax credit at the full rate minus the road user charge, for diesel fuel that you acquire and use in your vehicles that have a GVM of greater than 4.5 tonnes when travelling on public roads for the period 1 July 2006 to 30 June 2012?

Answer

Yes.

Question 13

Are you entitled to a fuel tax credit at the full rate minus the road user charge, for diesel fuel that you acquire and use in your EWP vehicle that has a GVM of greater than 4.5 tonnes when stationary and undertaking EWP activities for the period 1 July 2006 to 30 June 2008?

Answer

No.

Question 14

Are you entitled to a fuel tax credit at the full rate for diesel fuel acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2006 to 30 June 2012?

Answer

Yes.

Question 15

Are you entitled to a fuel tax credit at the full rate for petrol acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2008 to 30 June 2012?

Answer

Yes.

Question 16

Are you entitled to a fuel tax credit at the full rate for diesel fuel acquired for use in work undertaken for maintaining forestry roads in areas NOT set aside for logging, mining, railways and agriculture, councils and on private properties for the period 1 July 2006 to 30 June 2008?

Answer

No.

Question 17

Are you entitled to a fuel tax credit at the half rate for diesel and petrol fuel acquired for use in work undertaken for maintaining forestry roads in areas NOT set aside for logging, mining, railways and agriculture, councils and on private properties and in the EWP when stationary and engaged in it's EWP activities for the period 1 July 2008 to 30 June 2012?

Answer

Yes.

Question 18

Are you entitled to claim an energy grant (on-road or off-road credit) for the period 1 July 2005 to 30 June 2006 on your BAS if you attribute it to a tax period that ends before 30 June 2009?

Answer

Yes.

Question 19

Can you include any unclaimed fuel tax credits that you are entitled to on the BAS?

Answer

Yes, however, you are subject the 4 year time limit.

This ruling applies for the following period

2005-2006 income year

2006-2007 income year

2007-2008 income year

2008-2009 income year

2009-2010 income year

2010-2011 income year

2011-2012 income year

The scheme commenced on

1 July 2005

Relevant facts and circumstances

You are registered for goods and services tax (GST) and have been operating for a number of years.

Your business operates consists of:

Tree felling and trimming

Land clearing; and

Tree mulching and stump grinding.

You work for various customers including:

Forestry

Metal processing

councils

On railways and

Private customers.

Your work for an entity involves clearing of roadways by trimming and removal of trees and the installation of equipment not related to the thinning or felling of timber. Some of this work is conducted in forests which can be used for logging and some of the work is conducted in areas which will not be used for logging.

You also work in and around a metal smelting facility.

Some of your private customers are farmers. Your work for them involves the removal of trees from around their farm buildings which is generally too dangerous for them to do. You contract directly with farmers for this work.

The machines you own and use for your business are 4WD vehicles, wood chippers, trucks, elevated work platform (EWP), skid steer and other small equipment

The 4WD vehicles have a gross vehicle mass of less than 4.5 tonnes.

Your heavy road vehicles are trucks which have a gross vehicle mass (GVM) of 4.5 tonnes or more.

The EWP truck is a truck with an EWP permanently bolted to it. It is used to allow operators to reach heights in your arboriculture activities.

None of your vehicles are designed to operate on rails.

You acquire your fuel through a fuel retailer.

Relevant legislative provisions

Fuel Tax Act 2006 subdivision 41-B

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 41-20

Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 1 of Schedule 3

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

Fuel Tax (Consequential and Transitional Provisions) Act 2006 item 11 of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 item 9 of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 10(1) of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 10(1)(b)(i) of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 10(1)(b)(ii) of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 10(5) of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(1) of Schedule 3

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

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

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(5) of Schedule 3

Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(6) of Schedule 3

Energy Grants (Credits) Scheme Act 2003 Part 3 of Division 3

Energy Grants (Credits) Scheme Act 2003 Part 4 of Division 3

Energy Grants (Credits) Scheme Act 2003 section 4

Energy Grants (Credits) Scheme Act 2003 section 8

Energy Grants (Credits) Scheme Act 2003 subsection 11(1)

Energy Grants (Credits) Scheme Act 2003 paragraph 11(1)(a)

Energy Grants (Credits) Scheme Act 2003 paragraph 11(1)(b)

Energy Grants (Credits) Scheme Act 2003 subparagraph 11(1)(b)(i)

Energy Grants (Credits) Scheme Act 2003 subparagraph 11(1)(b)(ii)

Energy Grants (Credits) Scheme Act 2003 subsection 11(3)

Energy Grants (Credits) Scheme Act 2003 section 21

Energy Grants (Credits) Scheme Act 2003 section 22

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(a)

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(b)

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(c)

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(d)

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(e)

Energy Grants (Credits) Scheme Act 2003 paragraph 22(1)(i)

Energy Grants (Credits) Scheme Act 2003 section 27

Energy Grants (Credits) Scheme Act 2003 subsection 35(a)

Energy Grants (Credits) Scheme Act 2003 subsection 35(b)

Energy Grants (Credits) Scheme Act 2003 subsection 35(c)

Energy Grants (Credits) Scheme Act 2003 subsection 35(f)

Energy Grants (Credits) Scheme Act 2003 section 38

Energy Grants (Credits) Scheme Act 2003 section 39

Energy Grants (Credits) Scheme Act 2003 section 43

Energy Grants (Credits) Scheme Act 2003 subsection 43(1)

Energy Grants (Credits) Scheme Act 2003 paragraph 43(2)(a)

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

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

Reasons for Decision

For the period of this ruling two different Acts were relevant. For the period 1 July 2005 to 30 June 2006 entitlement was provided under the Energy Grants (Credits) Scheme Act 2003 (EGCSA).

For the period 1 July 2006 to 30 June 2012, entitlement is provided under the Fuel Tax Act 2006 (FTA) and the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (FTCTPA) which provides for the phased implementation of the fuel tax credit system to particular uses of fuel at certain times from 1 July 2006 to 1 July 2012.

Energy grants credits scheme - 1 July 2005 to 30 June 2006

In undertaking your business you undertake work for various corporate customers whose activities include forestry, mining, railways, and agriculture, referred to as off-road activities. You also undertake road transport in your vehicles, referred to as on-road activity. Each of these of these activities will be considered in turn.

On-road / Road Transport

You have vehicles with a GVM of less than 4.5 tonnes, trucks with a GVM of greater than 4.5 tonnes and a truck that has a GVM of greater than 4.5 tonnes which is specially fitted with an elevated work platform (EWP). Each will be considered.

Vehicles with a gross vehicle mass (GVM) of less than 4.5 tonnes

Subsection 43(1) of the EGCSA provides that you are entitled to an on-road credit if you purchase diesel fuel for use in a registered vehicle that has a GVM of 4.5 tonnes or more, but less than 20 tonnes where the vehicle is a vehicle for transporting passengers or goods or for incidental use in relation to such a vehicle.

You have vehicles with a GVM of less than 4.5 tonnes. Therefore subsection 43(1) of the EGCSA does not apply. Accordingly you are not entitled to an on-road credit for diesel fuel purchase and used in these vehicles for the period 1 July 2005 to 30 June 2006.

Trucks with GVM of 4.5 tonnes or more travelling on roads

You have trucks that have a GVM of 4.5 tonnes or more but less than 20 tonnes. This truck is used for carrying mulch, machinery and towing wood chippers. As this vehicle was designed for carrying goods or passengers it meets the requirements of subsection 43(1) of the EGCSA.

Section 43 of the EGCSA specifies the circumstances when an entity will be entitled to an on-road credit for the use of diesel fuel or alternative fuel in a vehicle that has a GVM of 4.5 tonnes or more, but less than 20 tonnes, where the vehicle is a vehicle for transporting passengers or goods.

Paragraph 43(2)(a) of the EGCSA relevantly restricts entitlement to an on-road credit to the use of on-road diesel fuel in carrying on your enterprise in operating the vehicle on a road in Australia on a journey between two points outside the metropolitan areas.

Your business operates solely in a regional area. Any travel undertaken in your regional area is a journey as defined above as the travel is between two points outside a metropolitan area.

Accordingly, you are entitled to an on-road credit for the use of diesel fuel in your truck with a GVM of greater then 4.5 tonnes in undertaking these journeys for the period 1 July 2005 to 30 June 2006.

Elevated work platforms (EWP truck)

As stated above, subsection 43(1) of the EGCSA provides that you are entitled to an on-road credit if you purchase diesel fuel for use in a registered vehicle that has a GVM of 4.5 tonnes or more, but less than 20 tonnes where the vehicle is a vehicle for transporting passengers or goods or for incidental use in relation to such a vehicle.

In determining whether a vehicle is a 'vehicle for transporting passengers or goods', the Explanatory Memorandum to the Diesel and Alternative Fuels Grants Scheme Bill 1999 should be considered, as the Diesel and Alternative Fuels Grants Scheme Act 1999 contains the same terminology to that used in the EGCSA.

When discussing the eligibility of 'vehicles for transporting passengers or goods', the Explanatory Memorandum refers to vehicles that are;

...designed for transporting passengers or goods... [emphasis added]

The Explanatory Memorandum to the Energy Grants (Credits) Scheme Bill 2003 and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill 2003 provides an example of a vehicle that is not for transporting goods or passengers.

Paragraph 2.8 of the Explanatory Memorandum states:

If a vehicle is not for transporting goods or passengers (e.g. special purpose vehicles such as mobile cranes)

Based on the two explanatory memoranda, the following tests are relevant in determining whether a particular vehicle is a vehicle for transporting goods or passengers:

(a) Is the vehicle designed for the purpose of transporting goods or passengers?  

(b) Is the vehicle a special purpose vehicle?

Section 4 of the EGCSA defines goods as including a substance and a tangible thing. While any tools and equipment carried by the EWP truck would fall within this definition, and the EWP truck is capable of carrying them, the EWP truck is not a vehicle that has been designed for transporting passengers or goods. Rather, the EWP truck in question is designed specifically to enable operators to reach tall trees and structures.

Therefore, as the EWP truck is not designed for the purpose of transporting passengers or goods and is generally regarded as a special purpose vehicle it is not considered to be a vehicle for transporting passengers or goods for the purposes of section 43 of the EGCSA.

Accordingly, as your EWP truck is not a vehicle for transporting passengers or goods, you are not entitled to an on-road credit under section 43 of the EGCSA for fuel used in operating it on a road or for any incidental use in relation to it for the period 1 July 2005 to 30 June 2006.

Off-road credits

In undertaking your business you undertake work for various corporate customers whose activities include forestry, mining, railways, and agriculture.

Subsection 53(1) of the EGCSA provides that you are entitled to an off-road credit for diesel fuel used in an activity that qualifies. Use in mining operations (otherwise than for the purpose of propelling a road vehicle on a public road), primary production (otherwise than for the purpose of propelling a road vehicle on a public road) or rail transport are uses that qualify. Each will be considered.

Note, you will not be eligible for off-road credits for propelling road vehicles on a road. As discussed above, vehicles travelling on roads are considered under other provisions of the legislation.

Primary production includes agriculture and forestry (section 21 of the EGCSA).

Forestry

Paragraphs 35(a) and 35(b) of the EGCSA contain the central or core forestry activities. The activities outlined in these paragraphs are:

· the planting or tending, in a forest or plantation, of trees intended for felling (paragraph 35(a)); and

· the thinning or felling, in a forest or plantation, of standing timber (paragraph 35(b)).

Paragraphs 35(c) to 35(f) of the EGCSA expand the meaning of 'forestry' by including specific activities that are undertaken for the purposes of obtaining timber as primary produce. These activities are:

· the transporting, within a forest or plantation of timber felled in the forest or plantation;

· the milling or processing within a forest or plantation of timber felled within the forest or plantation;

· the transporting of felled timber from the forest or plantation where it was felled to a sawmill or chipmill, located outside that forest or plantation;

· the milling of timber at a sawmill or chipmill that is not situated in the forest or plantation in which the timber was felled; and

· the making and maintaining, in a forest or plantation where trees are planted or tended or where standing timber is thinned or felled, of a road that is integral to the forestry activities mentioned in paragraphs 35(a), 35(b) and 35(c) 

The terms forest and plantation are not defined in the EGCSA and therefore they take on their common ordinary meanings.

The Macquarie Dictionary, 2001 rev. 3^rd edition The Macquarie Library Pty Ltd, NSW relevantly defines the term forest as:

1. an area of bushland in which the trees grow to great stature.

2. a tract of land on which trees are cultivated or have been cultivated; a large tract of land covered with trees

What is a forest is a question of fact and degree to be determined having regard to a number of factors including, the area of land on which trees are growing, its size, the use of the land on which the trees are growing, the activity or activities carried on in the area, the size of the canopy and the nature of the trees growing on it. However, not every area of land covered with trees is a forest.

The term plantation is relevantly defined in the Macquarie Dictionary as:

a group of planted trees or plants. In the context of the definition of forestry, a plantation is a group of planted trees, grown specifically for harvesting as timber.

Your work involves clearing of roadways by trimming and removal of trees and the installation of equipment not related to the thinning or felling of timber. Some of this work is conducted in forests which can be used for logging and some is conducted in areas which will not be used for logging.

The Commissioner considers that maintaining of a road under the forestry provisions encompasses a range of road maintenance activities, necessary to maintain a road to the operational standard required specified in the relevant Forestry Code of Practice or state Regulatory regime.

Diesel fuel - areas set aside for logging

Consequently, the trimming and clearing of forestry roads you undertake in areas set aside for logging are considered to be forestry activities and you would be eligible for an off-road credit for the diesel fuel you purchased and used in those activities.

Diesel fuel - areas not set aside for logging

In contrast, the road maintenance activities you undertake in areas which have not been set aside for logging are not considered to be forestry activities. As such, you would not be eligible for an off-road credit under the EGCSA for diesel fuel purchased and used in machinery and equipment in areas not set aside for logging.

Mining - work undertaken at a metal processing works

You undertake work for a metal processing works. Your work is not undertaken on a mine site rather, in and around the metal smelting facility.

Subsection 53(2) of the EGCSA provides that use in mining operations (otherwise than for the purpose of propelling any vehicle on a public road) is a use that qualifies.

The term mining operations is defined in subsection 11(1) of the EGCSA as:

(a) exploration or prospecting for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or

(b) operations for the recovery of minerals, being:

(i) mining for those minerals including the recovery of salts by evaporation; or

(ii) the beneficiation of those minerals, or of ores bearing those minerals;

and includes: …

Subsection 11(3) of the EGCSA provides that operations for the recovery of a mineral cease when the process of beneficiation ceases; or in the absence of a beneficiation process, when the mineral or ores bearing the mineral are either first stockpiled or are removed from the ore body or deposit.

Beneficiation is a technical term applicable to a range of processes undertaken in the mining or metallurgical industries. It is used to describe a treatment to improve, upgrade or concentrate the quality of mineral bearing ore up to, but not including, the refining or final pyrometallurgical or hydrometallurgical process whereby metal is produced.

It is clear that 'beneficiation' is distinct from refining to produce metal, or the process of manufacturing, or a process, which results in the destruction of a recovered mineral.

You purchase diesel fuel for use in your business and your customer processes certain ores into metal. The work undertaken by you is in and around the metal smelting facility. A metal smelting facility is not a place where mining operations are undertaken for the purposes of section 11 of the EGCSA and entitlement to an off-road credit. As such, fuel purchased and used in undertaking your work for this customer is not considered to be mining operations. Consequently, you would not be eligible for an off-road credit in respect of the fuel you acquire and use in your vehicles and equipment in and around a metal smelting facility for the period 1 July 2005 to 30 June 2006.

Agriculture

The expression agriculture under section 22 of the EGCSA means:

…

the cultivation of the soil; or

(b) the cultivation or gathering in of crops; or

(c) the rearing of live-stock; or

(d) viticulture, horticulture, pasturage or apiculture;

and includes:

….

(i) a sundry agricultural activity.

You confirmed that the work for farmers that you are contracted to, involves the removal of trees from around their farm buildings which is generally too dangerous for them to do. It is clear that these activities undertaken by you for farmers would not be considered cultivation of the soil; cultivation or gathering in of crops; or rearing of live-stock or viticulture etc.

The term sundry agricultural activity is defined in section 27 of the EGCSA as meaning a number of activities including:

· planting or tending of trees,

· firefighting activities,

· weed, pest or disease control.

Tending of the trees for the purposes of section 27 of the EGCSA means the undertaking of activities to ensure the survival of the trees or to enhance their growth, quality and vigour. For example, fertilising after planting, spraying tress against pests and diseases, eliminating weeks, fire protection measures and watering would be considered tending of trees.

The information provided by you did not indicate that the activities undertaken by you were for the tending of trees. As such, any fuel purchased for use in your equipment and machinery would not qualify as a sundry agricultural activity. Furthermore, it does not qualify within the meaning of agriculture under section 22 of the EGCSA.

As such, you would not be entitled to an off-road credit for diesel fuel purchased and used in your equipment and machinery to remove trees for farmers from around their farm buildings for the period 1 July 2005 to 30 June 2006.

Rail transport

Section 38 of the EGCSA sets out the meaning of the expression 'use in rail transport', and it includes various uses. However the underlying requirement in section 38 is that the fuel must be used in a rail vehicle or in equipment in or on a rail vehicle.

Hence, determining whether the vehicle that the fuel is being used in is a 'rail vehicle' is a vital step in establishing whether the fuel is for use in rail transport.

Rail vehicle is defined in section 39 of the EGCSA to mean a train, tram or any other vehicle operating on rails.

The meaning of the term 'rails' was discussed in Re Serco Australia Pty Ltd and Commissioner of Taxation [2003] AATA 737, with the Administrative Appeals Tribunal noting that the ordinary meaning of 'rails' is:

A bar or continuous line of bars (now usu. of iron or steel) laid on or near the ground (commonly in pairs) to bear and guide the wheels of a vehicle, and enable them to run more easily. Usu.pl.

 

Rail lines clearly constitute 'rails', as they are pairs of continuous lines of bars laid on or near the ground on which the wheels of a vehicle can run more easily.

The Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, defines 'operating' as:

 

1. to work or run, as a machine does.

2. to work or use a machine, apparatus, or the like.

3. to perform some process of work or treatment...

All three definitions are worded in the present tense. Therefore, in the context of the definition of 'rail vehicle', the term 'operating on rails' in effect means working while physically present on rails.

You undertake work on railways. You have purchased fuel for use in your equipment and machinery to undertake this work. None of the vehicles or equipment you use in your business are designed to operate while physically present on rails. As such, the requirement in section 38 of the EGCSA that the off-road diesel fuel is used in a rail vehicle in has not been satisfied. This would preclude the quantity of diesel fuel you acquire and use in those vehicles from an entitlement for an off-road credit under the EGCSA.

Accordingly you are not entitled to an off road credit for the use of diesel fuel in equipment and machinery in conducting work for the railway.

Councils and private properties

There are no provisions within the EGCSA that would provide an entitlement for diesel fuel purchased and used in activities undertaken off public roads for councils and private properties. Therefore, you would not have been entitled to an energy grant (off-road credit) for fuel purchased and used in activities undertaken by you for councils and on private properties for the period

1 July 2005 to 30 June 2006.

Petrol

Petrol was not an eligible 'off-road diesel fuel' for use in activities under the EGCSA. As such, you are not entitled to an off-road credit for petrol that you purchased and used in your equipment for the period 1 July 2005 to 30 June 2006.

Fuel tax credits 1 July 2006 to 30 June 2012

In undertaking your business you undertake work for various corporate customers whose activities include forestry, mining, railways, and agriculture, referred to as off-road activities. You also undertake road transport in your vehicles. Both road transport and off-road activities will be discussed in turn.

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 you do so for use in carrying on your enterprise, if you are registered for GST. However, this entitlement is affected by Divisions 1 and 2 of Part 3 of Schedule 3 to FTCTPA which operate to restrict this entitlement to specific activities for fuel purchased between 1 July 2006 and 30 June 2012.

Road Transport

Vehicles with a gross vehicle mass (GVM) of less than 4.5 tonnes

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

You acquire fuel for use in your 4WD vehicles for transporting crew and machinery. Each of these vehicles has a GVM of less than 4.5 tonnes. As such, you are not entitled to a fuel tax credit for diesel that you acquire and use in these vehicles travelling on public roads for the period

1 July 2006 to 30 June 2012.

Trucks with GVM greater than 4.5 tonnes travelling on public roads

The items listed within subitems 10(1)(b)(i), 10(1)(b)(ii) and 11(1)(b)(i) and 11(1)(b)(ii) of Schedule 3 of the FTCTPA include the use of taxable fuel in a vehicle travelling on a public road and for use of taxable fuel for incidental use in relation to a vehicle travelling on a public road.

Public roads

A road is a public road if:

· it is opened, declared or dedicated as a public road under a statute;

· it is vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or

· it is dedicated as a public road at common law.

The following are not considered public roads for the purposes fuel tax credits:

· a road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime;

· a forestry road; or

· a road that has not been dedicated as a public road over privately owned land.

A forestry road is a road within a forest or plantation which is constructed and maintained primarily and principally for the purposes of providing access to an area to facilitate forestry activities (for example, to facilitate trees to be planted or tended in the area, or timber felled in the area to be removed) and for related forestry management activities.

Travel

The Commissioner's view on when a vehicle is travelling on a public road is expressed in Fuel Tax Ruling FTR 2008/1 Fuel Tax: vehicles travel on a public road that is incidental to the vehicles main use and the road user charge. As discussed in the ruling, travelling and travel mean to go from one place to another place or to move from one point to another point. Travel includes all the ordinary incidents of a journey undertaken by a vehicle. This includes stopping in the course of a journey and the use of auxiliary equipment on the vehicle.

A vehicle's travel begins when it commences to move and ends when it arrives at a destination i.e. moving to and from a site at which it is to operate is travel. However, when a vehicle (especially a special purpose vehicle such as your truck EWP) is stationary and engaged in elevating its operator, it is not travelling for the purposes of the FTA.

Travel on a public road also includes any incidental use of the vehicle. Incidental use is defined in section 8 of the EGCSA and would include the movement of trucks off road to and from the place where they will load or unload goods.

Fuel used by your truck EWP when stationary and elevating personnel is not considered 'loading' or 'unloading' and therefore does not satisfy the definition of an incidental use of fuel as per section 8 of the EGCSA.

As such, diesel fuel used in your EWP when it is undertaking stationary and engaged in it's EWP special purpose work is not travelling for the purposes of these provisions. Therefore, you would not be entitled to a fuel tax credit for the fuel used in the EWP when it is stationary and engaged in it's EWP special purpose work for the period 1 July 2006 to 30 June 2008.

You acquire diesel fuel for both of your trucks with a GVM of greater than 4.5 tonnes in travelling on public roads. Accordingly you are entitled to a fuel tax credit for diesel fuel used in your trucks with a GVM of greater than 4.5 tonnes in travelling on public roads.

Note: this includes your elevated work platform in travelling on public roads.

Off-road activities

In undertaking your business you undertake work for various corporate customers whose activities include forestry, mining, on railways, and agriculture. You also undertake work for councils and on private properties.

This is not an eligible use of fuel under any of the items in subitems 10(1) and 11(1) of Schedule 3 of the FTCTPA. Therefore it is necessary to consider whether your activities qualify under any other provisions.

Subitems 10(5) and 11(5) of Schedule 3 to the FTCTPA provide that you are entitled to a fuel tax credit if you would have been entitled to an off-road credit under the EGCSA.

As determined above you are entitled to an off-road credit under the EGCSA for diesel fuel purchased and used in equipment and machinery in maintaining forestry roads in areas set aside for logging. Accordingly you are entitled to a fuel tax credit for diesel fuel acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2006 to 30 June 2012.

For the period 1 July 2008 to 30 June 2012 you are also entitled to a fuel tax credit for petrol acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging under subitem 11(5) of the FTCTPA.

As determined above, you are not entitled to an off-road credit under the EGCSA for diesel fuel purchased and used in work undertaken for mining, on railways and agriculture, councils and on private properties. Accordingly you are not entitled to a fuel tax credit at the full rate for diesel fuel acquired for use in work undertaken for mining, on railways and agriculture, councils and on private properties for the period 1 July 2006 to 30 June 2008.

Half rate of fuel tax credits

Subitem 11(6) of Schedule 3 of the FTCTPA provides that from 1 July 2008, an entitlement to a fuel tax credit arises under the FTA, if you were not previously entitled to an on-road or an off-road credit. The amount of the credit is half of the amount of the full rate.

This provision is subject to the disentitlement rules of subdivision 41-B of the FTA, which disallows a fuel tax credit:

· if another entity was previously entitled to a credit,

· for fuel used in light vehicles travelling on public roads,

· for fuel used in motor vehicles that do not meet environmental criteria, or

· for fuel used in aircraft.

Therefore, from 1 July 2008 you are entitled to a fuel tax credit at the half rate for the acquisition and use of fuel in the above activities which were not previously eligible. As discussed above, the activities that you were previously not eligible for fuel tax credits included:

· fuel used in the EWP when it is stationary and engaged in it's EWP activities;

· fuel used in equipment and machinery in areas not set aside for logging;

· work undertaken in and around the metal smelting facility;

· work for farmers that you are contracted to, involves the removal of trees from around their farm buildings;

· fuel used in equipment that does not operate on rails on railways; and

· for fuel used in your equipment and machinery for work undertaken by councils and on private properties.

Taxable fuel acquired and used in these activities will be eligible for a fuel tax credit at the half rate for the period 1 July 2008 to 30 June 2012.

Note that subitem 11(6) of Schedule 3 of the FTCTPA does not apply to your use of fuel in any vehicles with a GVM of less than 4.5 tonnes travelling on public roads as they are subject to the disentitlement rules of subdivision 41-B of the FTA.

Unclaimed on-road credits under the Energy Grants Credits Scheme

Parts 3 and 4 of Division 3 of the EGCSA provide for the entitlement to on-road credits and off-road credits respectively.

Item 9 of the FTCTPA provides that you have a decreasing fuel tax adjustment if:

· you purchased or imported on-road diesel fuel or off-road diesel fuel between 1 July 2003 and 30 June 2006 (inclusive); and

· you were entitled to an on-road credit or an off-road credit in respect of the fuel; and

· you have not made a claim for payment of an energy grant under section 15 of the Product Grants and Benefits Administration Act 2000.

In order to claim a decreasing fuel tax adjustment under item 9 of the FTCTPA and attribute amounts to a tax period of your choice that ends before 1 July 2009, you must be the entity who purchased and used the fuel in eligible on-road or off-road activities under the EGCSA.

For the period 1 July 2005 to 30 June 2006 you were entitled to claim an on-road credit for the portion of fuel that you acquired and used in your truck that is designed to carry passengers or goods and that has a GVM greater than 4.5 tonnes travelling on roads. You are also entitled to claim off-road credits for diesel fuel purchased and used in equipment and machinery in maintaining forestry roads in areas set aside for logging for that period. As such, you can attribute the amount for fuel purchased and used by you to a BAS that ends before 30 June 2009.

Unclaimed fuel tax credits

As determined above you are entitled to fuel tax credit for

· your vehicles with a GVM of more than 4.5 tonnes travelling on public roads for the period 1 July 2006 to 30 June 2012.

· for diesel fuel acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2006 to 30 June 2012.

· for petrol fuel acquired for use in equipment and machinery in maintaining forestry roads in areas set aside for logging for the period 1 July 2008 to 30 June 2012.

· for all fuel used in your equipment and machinery in other activities at the half rate for the period 1 July 2008 to 30 June 2012.

You can claim any unclaimed fuel tax credits on a business activity statement (BAS). However, this must be made within 4 years.