ATO ID 2008/47: Fuel tax credits and measuring instruments for fuel
Date of decision: 20 March 2008
Business line: Indirect Tax

Issue
For the purposes of working out the amount of fuel in respect of which you are entitled to a fuel tax credit under the Fuel Tax Act 2006 (FTA), are you required by the FTA or the Tax Office to use a measuring instrument approved for trade use by the National Measurement Institute and certified in accordance with the relevant trade measurement legislation?

Decision
No. For the purposes of working out the amount of fuel in respect of which you are entitled to a fuel tax credit under the FTA, you are not required by the FTA or the Tax Office to use a measuring instrument approved for trade use by the National Measurement Institute and certified in accordance with the relevant trade measurement legislation?

Facts
You acquire fuel in Australia for use in carrying on your enterprise. You dispense varying quantities of fuel from a tank into several different vehicles by using metering equipment. The equipment is not approved for trade use by the National Measurement Institute nor certified in accordance with the relevant trade measurement legislation? You use the records of the quantities of fuel metered into the vehicles to enable you to apportion the fuel between multiple uses. Those uses include uses for which you claim a fuel tax credit.

Reasons for decision
Summary: The FTA provides for the payment of fuel tax credits to ensure that, generally fuel tax is effectively only applied to: Section 41-5 of the FTA of the states: You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacturer in, or import into, Australia to the extent that you do so for use in carrying on your enterprise. For the purposes of working out your entitlement to a fuel tax credit, the FTA does not specify any method or equipment to calculate the quantity of taxable fuel that you acquire for use in carrying on your enterprise. In Fuel Tax Determination FTD 2010/1, about calculation methods, the Commissioner has determined that you can use any fair and reasonable method to work out the quantity of fuel for use in carrying on your enterprise. You need to keep records that detail how the quantity of fuel was worked out in order to show that your method is fair and reasonable and appropriate to your circumstances. What is fair and reasonable depends on the circumstances, but trade measurement legislation requirements do not limit what is fair and reasonable for the purposes of the FTA. Measuring equipment approved for trade use and certified in accordance with state or national trade measurement legislation can support a method of working out the quantity of fuel used in carrying on your enterprise, and may be one type of measuring equipment that provides a fair and reasonable basis for calculating your entitlement to a fuel tax credit. Other measuring equipment not so certified may also provide a fair and reasonable basis for calculating your entitlement to a fuel tax credit. Whether use of such equipment meets the requirements of the relevant trade measurement legislation is a separate matter for the relevant authority to determine.

Legislative references: Fuel Tax Act 2006 section 41-5
Related public rulings and determinations: Fuel Tax Determination FTD 2010/1
Subject references: FTC fuel tax