Edited version of private advice

Authorisation Number: 1051606338964

Date of advice: 11 November 2019

Ruling

Subject: Fuel tax credits

Question

Are you entitled to a fuel tax credit at the full rate for taxable fuel you acquired for use in your machinery when used in the quarry as part of your enterprise?

Answer

Yes

This ruling applies for the following periods:

20XX - 20XX income year

20XX - 20XX income year

20XX - 20XX income year

20XX - 20XX income year

20XX - 20XX income year

The scheme commences on:

1 October 20XX

Relevant facts and circumstances

You are registered for goods and services tax (GST).

You undertake a mining/quarrying operation.

You purchased and used diesel exclusively in the quarry to extract materials. The diesel is used in the following types of machinery:

·         Mobile crushing plant

·         Generators

·         Water truck

·         Dump truck

·         Screening plant

·         Excavators

·         Dozers

All fuel is used at the quarry sites. They do not enter public roads.

All fuel is delivered in bulk to onsite tanks.

No trucks which travel on public roads are fuelled from bulk tanks located on site.

All fuel is used for onsite quarrying activities.

You have not claimed any fuel tax credit for this activity as you did not realise that you were eligible. You wish to amend your business activity statement (BAS) to make a fuel tax credit back-claim for the previous four years, taking into account the time limits for claiming fuel tax credits.

Relevant legislative provisions

Fuel Tax Act 2006 section 41-5

Fuel Tax Act 2006 section 47-5

Fuel Tax Act 2006 section 65-5

Reasons for decision

Eligibility

Section 41-5 of the Fuel Tax Act 2006 (FTA) provides that if you are registered for goods and services tax (GST) at the time you acquire the fuel, you are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, the indirect tax zone to the extent that you do so for use in carrying on your enterprise.

You are registered for GST.

You purchased and used taxable fuel (diesel) in machinery such as mobile crushing plant, excavators, dozers etc., as part of your enterprise. The diesel is consumed by the machinery whilst performing their duties within the confines of the quarry and associated crushing and screening plants only, and do not enter any public roads.

Accordingly, the purchase and use of taxable fuel for the activity described above satisfies the fuel tax credit entitlement provision and therefore, you would be eligible to claim fuel tax credits at the full (off-road) rate for this activity.

Time limits

If you are entitled to a fuel tax credit, you need to claim it within four years of the end of the tax period in which the credit would be claimed at the time of acquisition of the fuel. If the fuel tax credit is not claimed within this time the entitlement ceases under subsection 47-5(1) of the FTA.

Subsection 47-5(1) of the FTA states:

You cease to be entitled to a fuel tax credit to the extent that it has not been taken into account, in an *assessment of a *net fuel amount of yours, during the period of 4 years after the day on which you were required to give to the Commissioner a return for the tax period or fuel tax return period to which the fuel tax credit would be attributable under subsection 65-5(1), (2) or (3).

In this case, you have been registered for GST and FTC for many years, and you have not claimed any fuel tax credits for the above activity.

For fuel tax credit entitlements that arose within the previous 4 years of the current tax period you can claim these credits on your current activity statement.

For fuel tax credits, the four-year period starts on the day after you're required to lodge the activity statement for the period the credit relates to. This is generally the tax period in which the fuel was acquired. To claim a fuel tax credit, you must work out the amount using the rate that applied at the time you acquired the fuel.