Edited version of your written advice

Authorisation Number: 1012764009536

Ruling

Subject: Fuel tax credits in respect to roads on Aboriginal land

Question

Are roads on land classified as "Schedule 1 Land" under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) considered to be "public roads" for the purposes of section 41-20 of the Fuel Tax Act 2006?

Answer

No

This ruling applies for the following periods:

1 July 2012 to 30 June 2018.

The scheme commences on:

1 July 2012.

Relevant facts and circumstances

You are currently registered for goods and services tax and fuel tax credits (FTC).

You query whether certain roads are public roads for the purposes of section 41-20 of the FT Act.

You advise that the roads have not been declared or dedicated as public roads under any Commonwealth or State/Territory statute. Further, there is no intention to dedicate these roads as public roads. No statute or act of parliament has been identified under which the roads have been declared or dedicated as public roads.

Relevant legislative provisions

Fuel Tax Act 2006 section 41-20.

Fuel Tax Act 2006 subsection 43-10(3)

Fuel Tax Act 2006 subsection 43-10(4).

Reasons for decision

Section 41-20 of the Fuel Tax Act 2006 (FT Act) provides that you are not entitled to a fuel tax credit for taxable fuel you acquire to the extent that the fuel is for use in a vehicle with a gross vehicle mass of 4.5 tonnes or less (light vehicle) travelling on a public road.

While the areas listed in Schedule 1 to the ALRA (Schedule 1 Land) are not generally open to access by the public, the various roads and tracks used by vehicles travelling within the area may be considered 'public roads' for the purposes of the FT Act.

'Public road' is not a defined term in the FT Act. However, 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, provides guidance in respect of the meaning of roads and public roads for the purposes of subsections 43-10(3) and 43-10(4) of the FT Act. Whilst these provisions deal with the application of the road user charge to a fuel tax credit for fuel used in a heavy vehicle, for travelling, on a public road, the principles for determining if a road is a public road are applied where the phrase 'public road' is used throughout the FT Act.

Paragraph 44 of FTR 2008/1, explains that a road is a public road if:

• it is opened, declared or dedicated as a public road under a statute;

• it is vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or

• it is dedicated as a public road at common law.

Consideration is given to the criteria in respect of the roads that are the subject of this ruling:

Opened, declared or dedicated as a public road under statute

You advised that the roads on Schedule 1 Land have not acquired the status of public road by dedication. There cannot be a road under the CRA on Schedule 1 Land, as section 19 of the ALRA constitutes the only mechanism by which interest in Aboriginal Land can be created and therefore the notion of "dedication" of a public road cannot operate on Schedule 1 Land.

For a public road to be dedicated the road would need to be identified and excluded from the grant of the land. As no such identification and exclusion has occurred for Schedule 1 Land there are no public roads dedicated within this area.

Vested in a government authority having statutory authority for public roads for the control and management of public road infrastructure

Paragraphs 123 and 124 of FTR 2008/1 explain that roads which are constructed, managed or maintained by a statutory authority of a state or territory that has responsibility over roads for public use, are public roads. You state that, generally, the Northern Territory Government maintains the higher order road, such as rural arterial and secondary local roads, on Aboriginal Land and Local Government maintains the lower order roads, such as local roads, on Aboriginal Land.

As the roads on Schedule 1 Land have not been excluded from the grant of the land they cannot, and have not, been vested in the Northern Territory or a local government council. These roads traverse in alienable freehold land owned by an Aboriginal Land Trust comprised of a specified group of Traditional Owners.

Dedicated as a public road at common law

At paragraph 125 of FTR 2008/1 the Commissioner explains that there must be established an 'unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road' for a road to be dedicated as a public road at common law.

Paragraph 125A of FTR 2008/1 lists the factors to be considered in determining whether an owner of land has dedicated it as a public road under the common law, and include:

• whether there has been a declaration of an intention to dedicate;

• delineation on maps or plans of roads set apart for public use;

• use by the public (indicating acceptance of the dedication);

• whether vehicles must be registered to use the road and state or territory traffic laws are applicable while the vehicles use the road; and

• the expenditure of money by public bodies in forming or maintaining the land as a road.

Section 19 of the ALRA constitutes the only mechanism by which interest in Aboriginal Land can be created; the common law notion of "dedication" of a public road can also not operate on Aboriginal Land. For roads traversing Schedule 1 Land it can be seen that the owners of such roads have not dedicated and there has been no declaration of an intention to dedicate them as public roads.

Additional factors which support this view include:

• These roads are, from time to time, subject to closure by the relevant Land Trusts/Councils for cultural or other reasons.

• Provisions exist within the ALRA which prohibits entry onto Aboriginal Land except to the holder of a permit. Such provisions are clearly contemplated as applying to roads over Schedule 1 Land. This is evidenced in section 4(1) of the ALRA which is clearly expressed as applying to roads.

• The provisions which currently exist under the ALRA (sections 12AA to 12AC) provide for either agreement or declaratory orders to allow identification of roads in Schedule 1 Land, however these provisions have not been utilised.

As such the roads on Schedule 1 Land are not 'public roads' for the purposes of the FT Act.

Apportionment

It is noted that you have informed the Commissioner that there are roads that transverse both Schedule 1 Land and non-aboriginal land and as such apportionment will be required for vehicles travelling on roads traversing land both Schedule 1 Land and non-aboriginal land.

The Commissioner's view on apportionment in regard FT Act is described in Fuel Tax Determination FTD 2010/1 Fuel tax: is apportionment used when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006? and Law Administration Practice Statement PS LA 2010/3: apportionment for the purposes of the Fuel Tax Act 2006 (PS LA 2010/3).

At paragraph 6 of FTD 2010/1 the Commissioner's view is that the 'fair and reasonable' principle applies in determining the extent of your entitlement to a fuel tax credit and/or the amount of your fuel tax credit.

Paragraph 10 of FTD 2010/1 states you are generally required to perform separate calculations so that you are applying a fair and reasonable basis of apportionment where there is one type of taxable fuel for use in multiple activities that either attract no fuel tax credit or a full fuel tax credit.

PS LA 2010/3 provides discussions on various methods of apportionment with the key points being consistency of method and the method an entity chooses for apportioning taxable fuel for the purposes of claiming fuel tax credits is fair and reasonable in its circumstances (emphasis added).