ATO ID 2013/16: Fuel tax credits: vehicles of less than 4.5 tonnes GVM travelling on a public road whilst providing safety support to a vehicle engaged in road maintenance, repair or construction
Date of decision: 2 April 2013
Year of income: 2012-13 income year
Business line: Indirect Tax

Issue
Is a safety vehicle with a gross vehicle mass (GVM) of less than 4.5 tonnes travelling on a public road, for the purposes of section 41-20 of the Fuel Tax Act 2006 (FTA), when it is moving along a public road providing safety support services to a separate vehicle that is maintaining a public road?

Decision
Yes. A safety vehicle which is providing safety support services is travelling on a public road for the purposes of section 41-20 of the FTA.

Facts
An entity acquires taxable fuel for use in its enterprise of road line marking. The fuel is used in the vehicle used for line marking and in the vehicle used to accompany the line marking vehicle. The line marking vehicle has a GVM exceeding 4.5 tonnes and marks lines on a public road by spraying paint onto the road or the verge as stipulated under the relevant state and territory legislation. A factor in the Australian Safety Standards with which the entity must comply in its line marking activities is the provision of a 'safety vehicle'. This vehicle is positioned in front or behind the vehicle marking the road and travels at the same speed as the line marking vehicle. The vehicle has yellow flashing lights affixed to the roof of the cabin and warns other vehicles, approaching from both directions, of the presence of a slow moving vehicle, and to reduce speed and to change lanes or overtake the vehicles when it is safe to do so. The safety vehicle has a GVM of less than 4.5 tonnes.

Reasons for decision
Summary: Under section 41-5 of the FTA an entity is entitled to a fuel tax credit for taxable fuel that it acquires, manufactures, or imports into Australia to the extent that it does so for use in carrying on its enterprise. Subdivision 41-B of the FTA provides a number of disentitlement rules for fuel tax credits. Relevantly, section 41-20 of the FTA states that an entity is not entitled to a fuel tax credit for taxable fuel used in a vehicle with a GVM of 4.5 tonnes or less 'travelling on a public road'. The FTA does not define the term 'travelling', however, in Fuel Tax Ruling FTR 2008/1, Fuel tax : vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge (FTR 2008/1), the Commissioner discusses the meaning of the terms 'travel' and 'travelling', and other relevant terms. The Commissioner states in paragraph 14 of FTR 2008/1 that in subsections 43-10(3) and 43-10(4) of the FTA the terms 'travelling' and 'travel' mean 'to go from one place to another place or to move from one point to another point'. At paragraph 22 of FTR 2008/1 the Commissioner states: However, 'travelling' in the sense contemplated by subsection 43-10(3) of the FTA does not include the movement of a vehicle on a public road or portion of a public road where: • the vehicle is engaged in the construction, repair or maintenance of the road; and • that road or portion of that road is under construction, repair or maintenance. The Commissioner further explains at paragraph 117 of FTR 2008/1 that where a vehicle is engaged in road construction, repair or maintenance and moves on the road that is under construction, repair or maintenance in the course of carrying out this work, the vehicle does not 'travel' on the road in the sense contemplated by subsections 43-10(3) and 43-10(4) of the FTA. The purpose of this movement is to benefit the road, not to use the road to relocate the vehicle. In this case the safety vehicle is moving along the road warning on-coming vehicles of a potential road hazard, namely a slow moving vehicle positioned on the road such that it is likely to be an obstruction. Whilst Australian Safety Standards require that a vehicle must accompany the vehicle that is marking lines on a public road, the safety vehicle is not engaged in the construction, repair or maintenance of the road. The function of a safety vehicle is to warn on-coming vehicles of a potential road hazard. The activity of the vehicle to which the safety warning relates is irrelevant. Hence, the discussion at paragraphs 22 and 117 of FTR 2008/1 is not relevant to a safety vehicle, irrespective of the activity that is undertaken on the public road that requires the provision of a safety vehicle. It is considered that a safety vehicle moving along a public road providing safety support to a vehicle that is constructing, repairing or maintaining the road is travelling on a public road. Accordingly, section 41-20 of the FTA applies to the taxable fuel acquired for use in a safety vehicle, such that there is no entitlement to a fuel tax credit for the fuel used.

Legislative references: Fuel Tax Act 2006 Subdivision 41-B section 41-5 section 41-20 subsection 43-10(3) subsection 43-10(4)
Related public rulings and determinations: FTR 2008/1
Related ATO interpretative decisions: ATO ID 2009/114
Subject references: Excise Excise offsets FTC light vehicle FTC Partial Credit FTC public road FTC road user charge FTC use in road construction Fuel tax credits