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Edited version of private ruling
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Ruling
Subject: Fuel tax credits
Question:
Are you entitled to claim a fuel tax credit for the fuel used in a vehicle that has a gross vehicle mass of less than 4.5 tonnes whilst travelling on a public road when escorting heavy vehicles with oversized loads?
Answer:
No.
This ruling applies for the following period
2010-2011 income year
The scheme commenced on
1 July 2010
Relevant facts and circumstances
You own a light commercial vehicle that is solely used in your business activity as an escort hire vehicle.
The vehicle has a gross vehicle mass (GVM) of less than 4.5 tonnes.
You travel on public roads escorting heavy vehicles that carry large earthmoving, mining and farming equipment etc.
All escorted loads are 'oversize'.
You advise that under the Road Transport Act legislation guidelines state that you are not permitted to use a vehicle over 4.5 tonne GVM as an escort vehicle unless it is the rear most vehicle in the escort.
You always travel with heavy vehicles as their escort for oversize loads
You are registered for goods and services tax (GST).
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 subitem 11(1) of Schedule 3
Fuel Tax (Consequential and Transitional Provisions) Act 2006 subparagraph 11(1)(b)(i) of Schedule 3
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).
The specific activities for which an entitlement exists are listed within subitem 11(1) of Schedule 3 to the FTCTPA.
Subparagraph 11(1)(b)(i) of Schedule 3 to the FTCTPA provides an entitlement to a fuel tax credit under section 41-5 of the FTA for taxable fuel acquired for use in a vehicle travelling on a public road.
You own a light commercial vehicle that is solely used in your business activity as an escort hire vehicle. You travel on public roads escorting heavy vehicles that carry oversize loads.
Subject to you acquiring taxable fuel for use in the travel on the public road, you satisfy subparagraph 11(1)(b)(i) of Schedule 3 to the FTCTPA which provides an entitlement to fuel tax credits under section 41-5 of the FTA.
However, section 41-5 of the FTA is subject to a number of disentitlement rules outlined at subdivision 41-B of the FTA.
Section 41-20 of the FTA states that you are not entitled to a fuel tax credit for the use of fuel in a vehicle with a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road.
Paragraph 2.48 of the Explanatory Memorandum to the Fuel Tax Bill 2006 states:
The break point of 4.5 tonnes or less gross vehicle mass aligns the eligibility for fuel tax credits with the additional licensing conditions that must be met in all Australian jurisdictions to drive a vehicle of this mass or greater and the Australian Design Rules for heavy vehicles. In addition, the Heavy Vehicle Charges Determination that establishes the road-user charges for heavy vehicles applies to vehicles over 4.5 tonnes.
The term 'gross vehicle mass' takes its ordinary meaning as the gross vehicle mass accepted by the authority that registered the vehicle.
You use a light commercial vehicle that travels on public roads to escort heavy vehicles with oversize loads. Your 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 a fuel tax credit for the fuel used in a vehicle that has a GVM of less than 4.5 tonnes whilst travelling on a public road when escorting heavy vehicles with oversized loads.
Please note: there is no provision under the legislation that provides any discretion for the Commissioner to allow a fuel tax credit where there is no entitlement.