ATO Interpretative Decision

ATO ID 2008/67 (Withdrawn)

Excise

Fuel Tax Credits: Fuel used to power a refrigerated container (Reefer) - road user charge
FOI status: may be released
  • This ATO ID is withdrawn as the issue is now covered by Fuel Tax Ruling FTR 2008/1, which issued on 9 April 2008.
    This document has changed over time. View its history.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is an entity's fuel tax credit for fuel acquired for use in a clip-on generator set that powers a refrigerated container (reefer) while being transported by a prime mover, reduced by the amount of the road user charge under subsection 43-10(3) of the Fuel Tax Act 2006 (FTA)?

Decision

No. An entity's fuel tax credit for fuel acquired for use in a clip-on generator set to power a reefer while being transported by a prime mover, is not reduced by the amount of the road user charge under subsection 43-10(3) of the FTA.

Facts

An entity operates a transport enterprise and is registered for GST.

The entity acquires taxable fuel for use in a clip-on generator set to power a reefer.

A reefer is a refrigerated container that ensures the quality of perishable goods during transportation by maintaining the desired temperature of its contents.

In this case, the reefer has an integral refrigeration unit that is powered by electricity from a clip-on generator set attached to the reefer.

The clip-on generator set has its own fuel tank.

The reefer is transported on a skeletal trailer that is towed by a prime mover.

The entity is entitled to a fuel tax credit under section 41-5 of the FTA for taxable fuel it acquired for use in the generator set to produce electricity to power the reefer during the entire journey of the goods.

The disentitlement rules in Subdivision 41-B of the FTA do not apply.

Reasons for Decision

Subsection 43-10(3) of the FTA provides that, to the extent that an entity '...acquires, manufactures, or imports taxable fuel to use, in a vehicle, for travelling on a public road...' the amount of the entity's fuel tax credit for the fuel is reduced by the amount of the road user charge. Therefore, the question arises as to whether the fuel used in the generator set attached to the reefer is fuel used in a vehicle when the reefer is placed on the skeletal trailer.

The Commissioner's view of the term 'vehicle' for the purposes of subsection 43-10(3) of the FTA is expressed in paragraphs 11 to 13 of Fuel Tax Ruling FTR 2008/1. It includes any vehicle that is capable of being authorised to travel on a public road by a relevant road traffic authority, whether or not the vehicle is designed for road travel or ordinarily travels on a public road. It is not restricted to a conveyance for the carriage of passengers or goods. Nor is the term 'vehicle' confined to a self-propelled vehicle. It includes any plant, machinery or equipment that is capable of locomotion and which may be authorised to travel on a public road by a relevant road traffic authority.

A refrigerated container serves two purposes: (1) to ensure the quality of the perishable goods are maintained; and (2) to provide adaptability to a combined use of road, rail and sea transport in a single journey where it is critical and efficient to retain the perishable goods within the same container. A reefer is an independent object to the means of conveyance. Similar to palletised goods, the reefer is the thing being conveyed. Thus a reefer is not a vehicle. The clip-on generator set is likewise not a vehicle even when attached to a reefer on a trailer.

As a reefer is not a vehicle, fuel that is acquired for use in a clip-on generator set that powers a reefer does not fall within the expression 'fuel to use, in a vehicle' for the purposes of subsection 43-10(3) of the FTA.

Therefore, the road user charge does not apply to reduce the amount of the entity's fuel tax credit arising under section 41-5 of the FTA for fuel it acquired for use in a clip-on generator set to power the reefer while being transported by a prime mover.

Date of decision:  24 April 2008

Legislative References:
Fuel Tax Act 2006
   section 41-5
   sub-section 41-B

Related Public Rulings (including Determinations)
Fuel Tax Ruling FTR 2008/1

Related ATO Interpretative Decisions
ATO ID 2008/66
ATO ID 2007/113
ATO ID 2007/80
ATO ID 2004/745

Keywords
FTC Partial Credit
FTC road user charge
Fuel tax credits

Siebel/TDMS Reference Number:  5875907

Business Line:  Indirect Tax

Date of publication:  9 May 2008

ISSN: 1445-2782

history
  Date: Version:
  24 April 2008 Original statement
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