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Edited version of private ruling
Authorisation Number: 1011726557369
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Subject: Fuel tax credits - taxable fuel
Question:
Are you entitled to fuel tax credits for a urea solution you acquire and use in your heavy vehicles travelling on a public road?
Answer:
No.
This ruling applies for the following period
2010-11 income year
The scheme commenced on
1 July 2010
Relevant facts
You are registered for goods and services tax (GST) in the road transport industry.
You acquire and use a fuel additive in your heavy vehicles operating on public roads.
You advise that the fuel additive is a liquid solution required in many post January 2008 manufactured heavy trucks to reduce harmful exhaust emissions in diesel engines.
You also advise that the fuel additive is necessary for the operation of the truck. Failure to use it will cause the truck to de-rate and or shutdown, making it just as critical as diesel.
You acquire the fuel additive from various suppliers.
You agree that the Australian Taxation Office can access information about the fuel additive from any relevant websites.
Various websites indicate that it is an aqueous urea solution and it is not a fuel.
Relevant legislative provisions
Fuel Tax Act 2006 section 2-1
Fuel Tax Act 2006 section 41-5
Fuel Tax Act 2006 section 110-5
Reasons for decision
Section 2-1 of the Fuel Tax Act 2006 (FTA) provides a single system of fuel tax credits which are paid to reduce or remove the incidence of fuel tax levied on taxable fuels with a view to fuel tax only being applied to:
· fuel used in private vehicles and certain private purposes; and
· fuel used on-road in light vehicles for business purposes.
Section 41-5 of the FTA provides that you are entitled to a fuel tax credit for taxable fuel that you acquire for use in carrying on your enterprise if you are registered for GST.
Therefore, for an entitlement to a fuel tax credit under the FTA you must first acquire taxable fuel and then use it in an eligible activity in carrying on your enterprise.
Taxable fuel is defined in section 110-5 of the FTA as fuel on which duty is payable under:
…
(a) the Excise Act 1901 and the Excise Tariff Act 1921; or
(b) the Customs Act 1901 and the Customs Tariff Act 1995;
but does not include fuel covered by:
(c) item 15, 20 or 21 of the Schedule to the Excise Tariff Act 1921; or
(d) any imported goods that would be classified to item 15 of the Schedule to the Excise Tariff Act 1921, if the goods had been manufactured in Australia.
Neither the fuel additive nor aqueous urea solution appear in any of these Acts.
Moreover, the manufacturer of the fuel additive in Australia advises that the additive is not a fuel.
As we have determined that the fuel additive (or aqueous urea solution) is not a taxable fuel, you are not entitled to fuel tax credits for a urea solution you acquire and use in your heavy vehicles travelling on public roads.