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Authorisation Number: 1011643566464

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Ruling

Subject: Fuel tax credits

Question 1:

For the period 1 July 2001 to 30 June 2003, will the Commissioner exercise his discretion under subsection 388-55(1) in Schedule 1 to the Taxation Administration Act 1953 (TAA) and extend the time allowed for giving the Commissioner a claim under the Products Grants and Benefits Act 2000 (PGBAA) where the time limit prescribed in subsection 15(2) of the PGBAA has expired?

Answer:

No. Accordingly, you cannot claim an energy grant for the fuel purchased for the period 1 July 2001 to 30 June 2003.

Question 2:

Does the Commissioner have the discretion to allow an energy grant associated with fuel purchases from 1 July 2001 to 30 June 2003, to be claimed as a decreasing fuel tax adjustment?

Answer:

No. As such, you cannot claim a decreasing fuel tax adjustment for fuel purchased for the period 1 July 2001 to 30 June 2003.

Question 3

For fuel purchased between 1 July 2003 to 30 June 2006, do you have a decreasing fuel tax adjustment?

Answer:

Yes.

Question 4:

Does the Commissioner have discretion to extend the four year time limit for unclaimed fuel tax credit entitlements under section 105-55 of Schedule 1 to the TAA if a valid notification of the entitlement is not provided to the Commissioner before four years of the end of associated tax period?

Answer:

No.

This ruling applies for the following period:

2001 - 2002 income year

2002 - 2003 income year

2003 - 2004 income year

2004 - 2005 income year

2005 - 2006 income year

2006 - 2007 income year

2007 - 2008 income year

2008 - 2009 income year

2009 - 2010 income year

The scheme commences on:

1 July 2001

Relevant facts and circumstances

You operate a haulage business and are registered for goods and services tax (GST).

You contacted us and queried the four year rule and whether you could claim the fuel tax credits and input tax credits back to 2001.

You advised that you were informed that you could claim back to 2001 but you needed to claim the fuel tax credits as a lump sum on the September 2005 business activity statement (BAS).

Later, you lodged numerous BAS that covered a period up to 30 June 2006. Your lodgments for the period 1 July 2005 to 30 June 2006 contained claims for fuel tax credits.

We contacted you and advised you that we were processing your BAS for the period 1 July 2005 to 30 June 2006 without the fuel tax credit claims. You state that you were informed that the credits were disallowed due to the four year rule and this legislation came in on 1 January 2010.

You are requesting that the fuel tax credits be allowed as it is substantial and legitimate.

You understand that you are very behind in your lodgments. You state that you were with another accountant for several years and regardless of your constant perusal of the work to be completed, it was never done so.

You advise that you supplied your previous accountant with all the information necessary to have the work completed up to the date before the new legislation came into affect.

You contend that you would not be in this predicament if your previous accountant had done their job and have stated that you have left them out of pure frustration.

You have advised that your records are very tidy and that you have kept all records associated with the proposed claims.

You have stated that if these credits are disallowed it will cause you serious financial hardship.

Our records show that you were registered for Diesel and Alternative Fuels Grants as well as for the Energy Grants (Credits) Scheme (EGCS).

No claims were made for a diesel and alternative fuel grant for the period after 1 July 2001, with your last claim received before 1 July 2001.

You did not lodge any EGCS claims during the period 1 July 2003 to 30 June 2006.

Your last business activity statement (BAS) lodgment before 2010 was in 2001.

Relevant legislative provisions

Diesel and Alternative Fuels Grants Scheme Act 1999

Energy Grants (Credits) Scheme Act 2003 section 40

Energy Grants (Credits) Scheme Act 2003 section 51

Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003 Schedule 2

Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003 Schedule 7

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 47-5

Fuel Tax Act 2006 subsection 47-10(3)

Fuel Tax Act 2006 section 60-5

Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 1 of Part 2 in Schedule 3

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

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

Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 1 of Part 8 in Schedule 3

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

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

Income Tax Assessment Act 1997 995-1

Products Grants and Benefits Administration Act 2000 Part 4

Products Grants and Benefits Administration Act 2000 section 5

Products Grants and Benefits Administration Act 2000 section 7

Products Grants and Benefits Administration Act 2000 section 15

Products Grants and Benefits Administration Act 2000 subsection 15(2)

Products Grants and Benefits Administration Act 2000 paragraph 15(2)(a)

Products Grants and Benefits Administration Act 2000 paragraph 15(2)(b)

Products Grants and Benefits Administration Act 2000 paragraph 15(2)(db)

Products Grants and Benefits Administration Act 2000 paragraph 15(2)(e)

Taxation Administration Act 1953 subdivision 388-B in Schedule 1

Taxation Administration Act 1953 section 388-50 in Schedule 1

Taxation Administration Act 1953 subsection 388-55(1) in Schedule 1

Taxation Administration Act 1953 section 105-55 in Schedule 1

Taxation Administration Act 1953 paragraph 105-55(1)(a) in Schedule 1

Reasons for decision

For the period of this ruling, two provisions in the Taxation Administration Act 1953 (TAA) are relevant in relation to discretion. For fuel purchased for the period 1 July 2001 to 30 June 2003, the relevant provision is section 388-50 of Schedule 1 to the TAA.

For fuel purchased for the period 1 July 2003 to 30 June 2006 and fuel acquired for the period 1 July 2006 to 30 June 2010, section 105-55 in Schedule 1 to the TAA is relevant.

1 July 2001 to 30 June 2003

Energy Grant

The Diesel and Alternative Fuels Grants Scheme Act 1999 (DAFGSA) (repealed) provided for the payment of a grant for the purchase of eligible fuel for use in eligible activities for the period 1 July 2000 to 30 June 2003.

On 1 July 2003, DAFGSA was repealed under Schedule 2 of the Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003. The Schedule provided that the DAFGSA continued to apply if a claim for a fuel grant for diesel fuel purchased prior to 1 July 2003 is made after 30 June 2003 but before 30 November 2003, provided a claim had not been made for the same fuel under the Energy Grants (Credits) Scheme Act 2003 (EGCSA).

That is a fuel grant associated with the fuel for the period 1 July 2001 to 30 June 2003 may have been claimed under the DAFGSA. Claims under the DAFGSA had to be made by 30 November 2003.

The EGCSA effectively replaced the DAFGSA from 1 July 2003. Schedule 7 of the Energy Grants (Credits) Scheme (Consequential Amendments) Act 2003 afforded a transitional extension of the EGCSA to include fuel purchases for the period 1 July 2000 to 30 June 2003, provided it had not been claimed under the DAFGSA.

Paragraph 15(2)(db) of the PGBAA stipulated that if the claim for payment of an energy grant is in respect of an on-road or off-road credit, it must be given to the Commissioner before the earlier of

· 1 July 2007; and

· the end of 3 years after the start of the claim period.

Claims for an energy grant that arose under the EGCSA, including the transitional period, were made under Part 4 of the Product Grants and Benefits Administration Act 2000 (PGBAA). Part 4 of the PGBAA, and in particular subsection 15(2) of the PGBAA specified the claim:

(a) may relate to all goods in respect of which you are entitled to a grant or benefit for the claim in question; and

(b) must be in the approved form; and

…

(e) must be given to the Commissioner before the end of 3 years after the start of the claim period.

The 'approved form' is defined in section 5 of the PGBAA defines as having the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Section 995-1 of the ITAA 1997 defines 'approved form' as having the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act 1953 (TAA).

Subdivision 388-B in Schedule 1 to the TAA sets out a number of arrangements that apply to information that must be given to the Commissioner in the approved form as defined in section 388-50 in Schedule 1 to the TAA.

Section 7 of the PGBAA states the Commissioner has general administration of this Act. Further, it contains a note that states that an effect of section 7 is that the TAA applies to the PGBAA as a taxation law.

Therefore, the approved form provisions contained within the TAA are applicable to applications for energy grants under the PGBAA.

Subsection 388-55(1) in Schedule 1 to the TAA states:

The Commissioner may defer the time within which an *approved form is required to be given to the Commissioner or to another entity.

Consequently, although the three year time limit imposed by subsection 15(2) of the PGBAA may have expired, subsection 388-55(1) in Schedule 1 to the TAA permitted the Commissioner to allow additional time to an entity to lodge an energy grant claim under the PGBAA.

In deciding whether to allow additional time for lodgment of an approved form, the Commissioner has a number of general obligations under administrative law such that include:

· each request must be considered on its merits

· the decision maker must have regard to the request, the contents of the claim itself and any other relevant matter

· have regard to the merits of the taxpayers' request

· must take into account relevant considerations

· the decision must be made in good faith and without bias

· if there is material adverse to the request of which the client may not be aware, the client should be made aware and asked to comment on it, and

· the decision must be based on evidence and not surmise or conjecture.

The Commissioner must be satisfied that the circumstances that prevented you from lodging your claim within the required time period were beyond your control and did genuinely prevent you from making the claim within time. As such, the following factors must also be considered and weighed in determining whether to grant the request:

· your explanation for the failure to lodge the claim within the specified time limit

· the circumstances of the delay, and

· any other relevant matters.

Other relevant matters include the period of the delay, whether any efforts were made to rectify the situation and any relevant contact with the ATO including lodgment of business activity statements and income tax returns.

You have asked the Commissioner to allow fuel tax credits to be claimed outside of the specified time limits. Your request includes credits for fuel purchased for the period 1 July 2001 to 30 June 2003. In support of your request, you have advised that you supplied your previous accountant with all the information necessary to have the work completed up to the date before the new legislation came into affect. You state that you were with your previous accountant for several years and regardless of your constant perusal of the work to be completed, it was never done so.

You contend that you would not be in this predicament if your previous accountant had done their job and have stated that you have left them out of pure frustration.

As stated previously, when considering allowing additional time for lodgment, the Commissioner must be satisfied that the circumstances that prevented you from lodging your claim within the required time period were beyond your control and did genuinely prevent you from making the claim within time.

During the period 1 July 2001 to 1 January 2010 no fuel grant claims were made by you or by your agent. Nor during the period were any business activity statements or income tax returns lodged by you or your agent. This is a significant period of time in which you did not meet your lodgment obligations, and during this time you, apparently, took no action to meet your obligations or contact the ATO in respect of your outstanding obligations.

Although your previous accountant had not lodged your claim despite your repeated efforts for him to do so, the Commissioner believes that the circumstances that prevented you from lodging your claim within the required time period were not beyond your control.

Therefore the Commissioner will not exercise his discretion under subsection 388-55(1) in Schedule 1 to the TAA and extend the time allowed for giving the Commissioner a claim under the PGBAA where the time limit prescribed in subsection 15(2) of the PGBAA has expired.

Decreasing fuel tax adjustment

However, Item 9 of Schedule 3 to the FTCTPA provides an alternative method for an entity to claim its entitlement to energy grants under the FTA.

Item 9 of Schedule 3 to the FTCTPA states that for the purpose of the FTA, 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

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

· have not made a claim for payment of an energy grant under section 15 of the PGBAA.

The decreasing fuel tax adjustment is included in working out your net fuel amount for a tax period under section 60-5 of the FTA.

As stated above, you have asked the Commissioner to allow fuel tax credits to be claimed outside specified time limits. Your request includes credits for fuel for the period 1 July 2001 to 30 June 2003.

Item 9 of Schedule 3 to the FTCTPA does not provide the Commissioner discretion to include energy grants associated with fuel purchased for the period 1 July 2001 to 30 June 2003 as a decreasing fuel tax adjustment. The legislation specifically states the transition period applies to energy grants for fuel purchased from 1 July 2003 to 30 June 2006.

As such, you cannot claim a decreasing fuel tax adjustment for fuel purchased for the period 1 July 2001 to 30 June 2003.

1 July 2003 to 30 June 2006

As stated previously, Item 9 of Schedule 3 to the FTCTPA provides that for the purpose of the FTA, 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.

Subitem 9(3) of Schedule 3 to the FTCTPA states that the decreasing fuel tax adjustment must be attributed to a tax period that you may choose that ends before 1 July 2009.

Therefore for fuel purchased between 1 July 2003 to 30 June 2006, you have a decreasing fuel tax adjustment that must be attributed to a tax period that ends before 1 July 2009.

1 July 2006 to 30 June 2010

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 goods and services tax (GST). However, this entitlement is affected by Divisions 1 and 2 of Schedule 3 to the FTCTPA which operate to restrict this entitlement to specific activities for fuel purchased between 1 July 2006 and 30 June 2012.

Section 47-5 of the FTA states that you cease to have an entitlement to a fuel tax credit to the extent that you have not taken them into account in working out your net fuel amount during the period of four years after the day on which you were required to give the Commissioner a return for a tax period.

However, subsection 47-10(3) of the FTA provides that you do not cease to be entitled to a fuel tax credit under section 47-5 of the FTA if you give the Commissioner a notice, pursuant to paragraph 105-55(1)(a) of Schedule 1 to the TAA, no later than 4 years after the end of the tax period to which the credit would be attributable.

As stated above, paragraph 105-55(1)(a) of Schedule 1 to the TAA states that you are not entitled to a refund or fuel tax credit in respect of a tax period unless, within four years after the end of the tax period, or importation you notify the Commissioner of their entitlement to the refund or credit.

There are no relevant legislative provisions in either the FTA or the TAA to allow the Commissioner to exercise any discretion and waive the time limit of four years when notification of entitlement is not received within four years.