ATO Interpretative Decision
ATO ID 2013/22 (Withdrawn)
Fuel Tax
Fuel tax: carbon reduction for fuel used in a vehicle moving along a public road undertaking maintenance-
This ATO ID is withdrawn from 1 July 2014, the date of repeal of Subdivision 43-B of the Fuel Tax Act 2006. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of fuel acquired, manufactured or imported in the period the Subdivision was in force, being 1 July 2012 up to and including 30 June 2014.This document has changed over time. View its history.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Does paragraph 43-8(4)(c) of the Fuel Tax Act 2006 (FTA) apply, and hence the carbon reduction nil, where fuel is acquired for use in a vehicle with a gross vehicle mass (GVM) of more than 4.5 tonnes that is moving along a public road while engaged in undertaking road maintenance?
Decision
No, paragraph 43-8(4)(c) of the FTA does not apply. The use of fuel in a vehicle moving along a public road whilst it is engaged in road maintenance will not satisfy the requirements of paragraph 43-8(4)(c) of the FTA.
This is because the vehicle is not travelling on a public road.
Facts
An entity operates a vehicle with a GVM of more than 4.5 tonnes.
The vehicle is engaged in the construction, maintenance and repair of public roads.
The entity acquires taxable fuel to power the vehicle.
Reasons for Decision
Subsection 43-5(1) of the FTA reduces the fuel tax credit an entity may claim by an amount of carbon reduction. However, in certain circumstances, the amount of carbon reduction will be nil. Paragraph 43-8(4)(c) of the FTA provides that:
The *amount of carbon reduction that applies to the fuel is nil to the extent that:
The wording of paragraph 43-8(4)(c) of the FTA focuses on whether fuel is for use in a vehicle travelling on a public road.
Meaning of 'travel'
The meaning of the term 'travel' in the sense of travelling on a public road is considered in Fuel Tax Ruling FTR 2008/1: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge.
The discussion of the meaning of the term 'travel' in FTR 2008/1 is focused on its significance in determining whether a road user charge is applicable under
subsection 43-10(3) of the FTA, and the possible effect of subsection 43-10(4) of the FTA.
However, given the test in paragraph 43-8(4)(c) of the FTA also contains the phrase 'travelling on a public road', the discussion in FTR 2008/1 is equally applicable to the determination of whether the carbon reduction applicable to the use of fuel in a vehicle with a GVM greater than 4.5 tonnes is nil.
With regard to the use of fuel in road maintenance vehicles, FTR 2008/1 provides the following guidance:
Movement by a vehicle engaged in road construction, repair or maintenance
21. The movement of a vehicle engaged in road construction, repair or maintenance to and from a road works site is 'travelling' for the purposes of subsection 43-10(3).
22. However, 'travelling' in the sense contemplated by subsection 43-10(3) does not include the movement of a vehicle on a public road or portion of a public road where:
23. The movement of a vehicle engaged in the construction, repair or maintenance of a road, for example, a grader, bulldozer, water cart or street sweeper which occurs on the road or portion of the road that is under construction, repair or maintenance is not 'travelling' for the purposes of subsection 43-10(3).
Consequently, while the vehicles in question are engaged in constructing, maintaining or repairing a road, they are not travelling on the public road. It follows that the fuel tax credit otherwise available is reduced by the relevant carbon reduction for the fuel calculated in accordance with section 43-8 of the FTA.
Year of income: Year ended 30 June 2013
Legislative References:
Fuel Tax Act 2006
section 41-5
section 41-20
section 43-5
section 43-8
subsection 43-8(4)
subsection 43-10(3)
Related Public Rulings (including Determinations)
FTR 2008/1
Keywords
FTC amount of credit
FTC heavy vehicle
FTC Partial Credit
FTC public road
FTC road user charge
Fuel tax credits
ISSN: 1445-2782
| Date: | Version: | |
| 1 July 2012 | Original statement | |
| You are here | 30 July 2014 | Archived |