| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012710167998
Ruling
Subject: Fuel tax credit entitlement
Question 1
Are you entitled to a fuel tax credit for taxable fuel you acquire for use in carrying on your enterprise in vehicles with a gross vehicle mass (GVM) of 4.5 tonnes or less?
Answer
Yes
This ruling applies for the following periods:
2014 - 2015 income year
2015 - 2016 income year
2016 - 2017 income year
Relevant facts and circumstances
You are registered for goods and services tax (GST) and fuel tax credits (FTC).
The fuels you acquire for use in carrying on your enterprise are taxable fuels.
As part of your business operations, vehicles with a GVM of 4.5 tonnes or less are moved between various locations. The movement of these vehicles between these locations does not occur on a public road.
You also use taxable fuel in vehicles with a GVM of 4.5 tonnes or less when you periodically test vehicles for the purposes of preserving each vehicle's operating capacity. During this time, the vehicles remain stationary.
All vehicles and taxable fuel used in the vehicles are used in Australia for business purposes only.
All taxable fuel acquired is acquired solely for the purpose of moving the vehicles between the different locations.
The amount of taxable fuel used in the above process differs between vehicle models and engine size.
Ownership and risk in your motor vehicles remains with you until the vehicles reach their final destination.
The only incident of any travel on a public road may occur where the vehicles do not have access to the final destination. In this situation, the vehicles must be driven a small distance to reach the final destination on a public road.
The vehicles do not require registration for use on public roads.
Relevant legislative provisions
Fuel Tax Act 2006 Section 41-5
Fuel Tax Act 2006 Section 41-20
Fuel Tax Act 2006 Section 110-5
Reasons for decision
If you are registered for GST, 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 for use in Australia to the extent that you do so for use in carrying on your enterprise.
The term 'taxable fuel' is defined at section 110-5 of the FTA to mean any fuel on which excise or excise equivalent customs duties is payable.
You acquire taxable fuels for the testing and movement of vehicles between various locations with a GVM of 4.5 tonnes or less. This testing and movement process form part of your usual business operations.
Section 41-5 of the FTA has therefore been met.
Under section 41-20 of the FTA however, there is no fuel tax credit entitlement if taxable fuel is acquired for use in a vehicle with a GVM of 4.5 tonnes or less travelling on public roads.
Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge expresses that, in the Commissioner's view, a road is a public road if it is:
• opened, declared or dedicated as a public road under a statute
• vested in a government authority having statutory responsibility for the control and management of public road infrastructure, or
• dedicated as a public road at common law.
On occasion, your vehicles must be driven a small distance on a public road to reach the final destination. It can be seen that the vehicles in this circumstance are 'travelling on a public road', however the amount of travel on a public road would be negligible. This travel is not travel in the context of a journey; it is more reasonably considered 'movement' of the vehicle to the final destination.
Further, the taxable fuel is acquired solely for the purpose of testing the vehicles and moving the vehicles between the different locations. The fuel is not acquired for use in a vehicle travelling on a public road, albeit the vehicle may move a short distance along a public road during the transportation process.
Therefore you are entitled to a fuel tax credit under section 41-5 of the FTA for fuel acquired for testing and moving the vehicles between the different locations and section 41-20 of the FTA doesn't apply.
There are also no other sections in the FTA that restrict your entitlement to a fuel tax credit.