Edited version of private ruling

Authorisation Number: 1011606448885

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Ruling

Subject: fuel tax credits - nursing and medical - vehicle less than 4.5 tonnes

Question 1:

Are you entitled to claim a fuel tax credit for taxable fuel you acquire and use in a vehicle that has a gross vehicle mass (GVM) of less than 4.5 tonnes, when travelling on a public road?

Answer:

No.

Question 2:

Is the use of a vehicle on a public road considered for use at a hospital or nursing home or any other institution providing medical or nursing care under the Energy Grants (Credits) Scheme Act 2003?

Answer:

No.

This ruling applies for the following periods:

2008-09 income year

2009-10 income year

2010-11 income year

2011-12 income year

The scheme commences on:

1 July 2008

Relevant facts and circumstances

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

You engage a doctor for the medical requirements for a town and surrounding areas.

As part of the employment arrangements, fuel for the doctor's vehicle is supplied by you to allow the doctor to travel to required medical appointments at places such as the local hospital and medical clinic.

You have advised that the vehicle has a GVM of less than 4.5 tonnes and travels on public roads.

You state that you acquire taxable fuel.

You have queried in your private ruling application whether you have an entitlement under nursing and medical activities.

Relevant legislative provisions

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 subdivision 41-B

Fuel Tax Act 2006 section 41-20

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

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

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

Schedule 3

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

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

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

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

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

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

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

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

Schedule 3

Energy Grants (Credits) Scheme Act 2003 section 53

Energy Grants (Credits) Scheme Act 2003 paragraph 53(4)(c)

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 goods and services tax. However, this entitlement is affected by Division 2 in Part 3 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (FTCTPA) that operates to restrict this entitlement to specific activities for fuel acquired between 1 July 2008 and 30 June 2012, whilst retaining entitlements under the Energy Grant (Credits) Scheme Act 2003 (EGCSA).

Travel on a public road

The specific activities are listed in paragraph 11(1)(b) in Part 3 of Schedule 3 to the FTCTPA. They are:

I) for use in a vehicle travelling on a public road; or

II) for incidental use (within the meaning of section 8 of the Energy Grants Act) in relation to a vehicle covered by subparagraph (i); or

III) generation of electricity

IV) use other than as a fuel

V) burner fuel

VI) for use as heating oil.

If your activities satisfy one of those listed under paragraph 11(1)(b) in Part 3 of Schedule 3 to the FTCTPA, then the other provisions of item 11 in Part 3 of Schedule 3 to the FTCTPA do not need to be considered.

You engage a doctor for the medical requirements for a town and surrounding areas. As part of the employment arrangements, you acquire and supply taxable fuel for the doctor's vehicle. The doctor's vehicle is used to travel to required medical appointments at places such as the local hospital and medical clinic. You have advised that the travel is on public roads and that the vehicle has a GVM of less than 4.5 tonnes.

Subparagraph 11(1)(b)(i) in Part 3 of Schedule 3 to the FTCTPA provides an entitlement to a fuel tax credit arises under section 41-5 of the FTA for taxable fuel acquired for use in a vehicle travelling on a public road. Therefore, you satisfy this requirement.

However, paragraph 11(1)(b) in Part 3 of Schedule 3 to the FTCTPA is subject to a number of disentitlement rules outlined at subdivision 41-B of the FTA which provides that there is no fuel tax credit:

§ if another entity was previously entitled

§ fuel used in a light vehicles on a public road

§ fuel used in motor vehicles that do not meet the environmental criteria, and

§ fuel used in aircraft.

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

Whilst you acquire taxable fuel for use in a vehicle that travels on public roads, the vehicle has a GVM of less than 4.5 tonnes. Therefore, section 41-20 of the FTA applies.

Accordingly, you are not entitled to claim fuel tax credits for taxable fuel you acquire and use in a vehicle that has a GVM less than 4.5 tonnes, when travelling on a public road.

Nursing and medical

As stated above, the remaining provisions of item 11 in Part 3 of Schedule 3 to the FTCTPA do not need to be considered where your activities satisfy one of those listed under paragraph 11(1)(b) in Part 3 of Schedule 3 to the FTCTPA.

However in your private ruling application you have queried whether you have an entitlement under nursing and medical activities. Therefore this will be considered.

Subitem 11(5) in Part 3 of Schedule 3 to the FTCTPA provides that an entitlement may arise under the FTA if you would have been entitled to an off-road credit under the EGCSA.

Section 53 of the EGCSA provides that an entity is entitled to an off-road credit if they purchase or import into Australia fuel for a use that qualifies.

Use at a hospital or nursing home or at any other institution providing medical or nursing care is a use that qualifies per paragraph 53(4)(c) of the EGCSA.

The Commissioner considers that the legalisation provides for locational and purposive tests. The determination of whether or not these tests are satisfied will depend on the individual facts and circumstances of each case.

There will be no entitlement to an off-road credit under the EGCSA and subsequently no entitlement to a fuel tax credit if one or either of these tests cannot be satisfied.

The locational test requires the fuel to be used 'at' the hospital or other institution providing medical or nursing care.

You stated that the fuel for the doctor's vehicle is supplied by you to allow the doctor to travel to required medical appointments at places such as the local hospital and medical clinic. You advised that the travel is on public roads.

The travel is on public roads 'to' medical appointments at places such as the local hospital and medical clinic and is not for use 'at' the hospital or other institution providing medical or nursing care. Accordingly, we consider that the locational test of 'at' a hospital or other institution providing medical or nursing care is not satisfied.

As such, the use of a vehicle on a public road is not considered for use 'at' a hospital or nursing home or any other institution providing medical or nursing care for the purposes of paragraph 53(4)(c) of the EGCSA.

Therefore, you would not be entitled to an off-road credit and accordingly, you do not satisfy subitem 11(5) in Part 3 of Schedule 3 to the FTCTPA.