ATO ID 2010/223: Fuel tax credits: GST groups - applications for private rulings
Date of decision: 3 December 2010
Business line: Indirect Tax

Issue
Does section 70-5 of the Fuel Tax Act 2006 (FTA) prevent an entity that is a member of a GST group, but is not the representative member of the group, from applying for a private ruling in relation to transactions they enter into that affect the net fuel amount of the group?

Decision
Yes. Section 70-5 of the FTA prevents an entity that is a member of a GST group, but is not the representative member of that group, from applying for a private ruling in relation to transactions they enter into that affect the net fuel amount of the group because the right to seek the ruling has transferred to the representative member of the group.

Facts
An entity is a member of a GST group. The entity is not the representative member of the GST group. The entity enters into a transaction that affects the net fuel amount of the GST group.

Reasons for decision
Summary: Division 357 of Schedule 1 to the Taxation Administration Act 1953 (TAA) sets out common rules that apply to rulings. Under paragraph 357-55(i) of Schedule 1 of the TAA, a ruling can be made in relation to a net fuel amount, or the administration, collection or payment of a net fuel amount. Subsection 359-5(1) of Schedule 1 to the TAA explains that the Commissioner may, on application, make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply to 'you in relation to a specified scheme'. Subsection 359-10(1) of Schedule 1 to the TAA provides that 'you, your agent or your legal personal representative may apply to the Commissioner for a private ruling'. The combined effect of the above provisions is that rulings can be sought and provided in relation to the application of schemes insofar as they relate to the applicant's net fuel amount (or the administration, collection or payment of the applicant's net fuel amount). Section 70-5 of the FTA explains the application of the fuel tax law to GST groups and joint ventures. Subsection 70-5(1) of the FTA provides that the entities listed in column 1 of the table in the section are treated as a single entity for the fuel tax law. Subsection 70-5(2) of the FTA provides that the entities listed in column 2 of the table have all the rights, powers and obligations under the fuel tax law instead of each entity in column 1 of the table having those rights, powers and obligations. Column 1 of item 1 of the table in subsection 70-5(2) of the FTA stipulates that the members of a GST group are treated as a single entity for the purposes of the fuel tax law. Column 2 of item 1 then stipulates that the representative member of the GST group has all the rights, powers and obligations of the single entity under the fuel tax law. The fuel tax law is defined in section 110-5 of the FTA as: As the ability to seek a private ruling in relation to fuel tax matters, and the Commissioner's ability to issue a ruling, are provided for under the TAA, the provisions relating to private rulings are 'fuel tax law' insofar as they relate to fuel tax. As explained above, the effect of the private rulings provisions in the TAA is that an entity has the power to seek a private ruling in relation to schemes they enter into that affect their net fuel amount. However, section 70-5 of the FTA treats all the members of a GST group as a single entity, and gives the representative member all the rights, powers and obligations of the single entity. It follows that where a transaction has been entered into that affects the net fuel amount of the single entity (being the GST group), it is the representative member, and not the individual entity that entered into the transaction, that is able to seek a private ruling.

Legislative references: Fuel Tax Act 2006 section 70-5 section 110-5
Subject references: Fuel tax credits FTC general FTC fuel tax FTC fuel tax law FTC net fuel amount FTC indirect tax ruling FTC indirect tax law Private ruling Private rulings