Private ruling: Fuel tax credits - elevated work platform
Published: December 2013
Ruling period: 2012-13 income year | 2013-14 income year
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a fuel tax credit for the taxable fuel (diesel) you acquire and use in your business to operate an elevated work platform (EWP)? | A1: Yes. | Q2: Is the fuel tax credit in relation to the diesel you acquire and use in your EWP with a gross vehicle mass (GVM) of more than 4.5 tonnes, for travelling on public roads, reduced by the amount of the road user charge (RUC) for the period 1 July 2012 to 30 June 2014? | A2: Yes. | Q3: Is the fuel tax credit in relation to the diesel you acquire and use in hydraulic equipment on your EWP reduced by the amount of the RUC for the period 1 July 2012 to 30 June 2014? | A3: No. | Q4: Is the fuel tax credit in relation to the diesel you acquire and use in hydraulic equipment on your EWP subject to the applicable amount of carbon reduction for diesel while the EWP is not travelling on a public road for the period 1 July 2012 to 30 June 2014? | A4: Yes.

Relevant facts and circumstances: You are an Australian company registered for goods and services tax (GST). As part of your business, you operate an elevated work platform (EWP). You are not currently registered for fuel tax credits. Your EWP is not solely designed for on-road use but it does use public roads to travel to its job locations. The EWP has a gross vehicle mass (GVM) of more than 4.5 tonnes and its main purpose is to lift workers above the ground to enable them to carry out their tasks. The EWP has one diesel engine which is used to propel the vehicle on public roads. The engine is also used to power hydraulic systems attached to the EWP which are used to raise and lower the work platform. You acquire and use the taxable diesel fuel used in your EWP.

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 section 43-8 | Fuel Tax Act 2006 subsection 43-8(4) | Fuel Tax Act 2006 subsection 43-10(3)

Reasons for decision: Summary: Section 41-5 of the Fuel Tax Act 2006 (FTA) provides that you are entitled to a fuel tax credit for taxable fuel that you acquire for use in carrying on your enterprise if you are registered for GST. However, the amount of the fuel tax credit to which you are entitled for taxable fuel may be affected by: · an amount of carbon reduction (if applicable) · the amount of any applicable grant or subsidy; or · the amount of the road user charge (RUC) in relation to taxable fuel to use, in heavy vehicle, for travelling on public roads. Heavy vehicles for the purposes of fuel tax credits are generally vehicles with a gross vehicle mass (GVM) of greater than 4.5 tonnes. | Detailed Reasoning - Carbon reduction: Section 43-8 of the FTA sets out the rules for working out the amount of the carbon reduction to fuel tax credit calculations from 1 July 2012. It provides that the amount of carbon reduction that applies to a particular quantity of taxable fuel is worked out by using the following formula: | Detailed Reasoning - Quantity of fuel x carbon price x carbon emission rate: Therefore the carbon reduction for diesel fuel for the period: 1. 1 July 2012 to 30 June 2013 is 6.21 cents per litre 2. 1 July 2013 to 30 June 2014 is 6.521 cents per litre. However, subsection 43-8(4) of the FTA provides for those circumstances where no carbon reduction applies. That is, the amount of carbon reduction that applies to the fuel will be nil where the fuel is acquired for use in vehicles with a GVM of more than 4.5 tonnes travelling on a public road. | Detailed Reasoning - For travel on a public road and application of road user charge: Subsection 43-10(3) of the FTA provides that to the extent that you acquire taxable fuel to use, in a vehicle, for travelling on a public road, the amount of your fuel tax credit for the fuel is reduced by the amount of the road user charge for the fuel. 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, the Commissioner explains the RUC and its application for the purposes of subsections 43-10(3) and (4) of the FTA. Paragraphs 23A to 23D of FTR 2008/1 provides that the phrase "fuel to use, in a vehicle, for travelling on a public road" in subsection 43-10(3) of the FTA covers fuel that is used in a vehicle: · for the purpose of propelling that vehicle on a public road; and · fuel for aspects if the vehicle's function and operation that are for the purpose of travelling on a public road, that is stopping or idling whilst in the course of a journey, as well as the use of lights, brakes, power steering etc. Determining whether an aspect of the vehicles' function or operation has this character requires a practical assessment of its connection with travelling, as distinct from some other function of the vehicle. In contrast, the Commissioner goes on to state at paragraph 23E of FTR 2008/1 that the expression 'for travelling' does not include fuel used for a purpose unrelated to a vehicle's movement on a public road and provides for a number of examples, including cherry picker vehicles. You acquire diesel fuel for use in your EWP with a GVM of greater than 4.5 tonnes. As the EWP travels on public roads to get to its job locations, you are entitled to claim a fuel tax credit for the amount of fuel used in the vehicle for this purpose. However, as mentioned above, subsection 43-10(3) of the FTA provides that the amount of your fuel tax credit is reduced by the amount of the RUC for the fuel where you acquire taxable fuel to use, in a vehicle, for travelling on a public road. That is, fuel that is used in your vehicle for the purpose of propelling the vehicle on a public road. For the period commencing 1 July 2012, the RUC is 25.5 cents per litre (cpl). For the period commencing 1 July 2013 the RUC is 26.14 cpl. In addition, as this amount of fuel is used in a vehicle with a GVM of more than 4.5 tonnes travelling on a public road, subsection 43-8(4) of the FTA provides that the amount of carbon reduction that applies to the fuel will be nil. Accordingly, you are entitled to a fuel tax credit in relation to taxable fuel you acquire and use in your EWP with a GVM of more than 4.5 tonnes, for travelling on public roads. The amount of fuel tax credit to which you entitled is 38.143 cpl less the relevant amount of RUC for the period 1 July 2012 to 30 June 2014. The fuel tax rates you can claim for the applicable periods are: 1 July 2012 to 30 June 2013: 12.643 cpl 1 July 2013 to 30 June 2014: 12.003 cpl | Detailed Reasoning - Fuel used to operate hydraulic systems fitted to your EWP: Your EWP is also fitted with a hydraulic system which is powered by the same motor that propels the vehicle. That is, you also use an amount of fuel in a vehicle for a purpose other than the propulsion of that vehicle The fuel being used in the hydraulic system is not fuel to use, in a vehicle, for travelling on a public road" as described above. As such, subsection 43-10(3) does not apply and your fuel tax credit for the quantity of fuel used in the hydraulic system attached to your EWP will not be reduced by the RUC. However, as the fuel used in the hydraulic system of your EWP is not used in the vehicle while travelling on a public road, the provision in paragraph 43-8(4)(c) of the FTA does not apply and the fuel tax credit calculated for this quantity of fuel is reduced by the applicable carbon reduction amount for the fuel (diesel). Accordingly, you are entitled to a fuel tax credit at the rate of 38.143 cents per litre less the applicable carbon reduction amount for the quantity of diesel fuel you acquire and use in the hydraulic systems fitted to your EWP, during the period 1 July 2012 to 30 June 2014. The fuel tax rates you can claim for the diesel used for the applicable periods are: 1 July 2012 to 30 June 2013: 31.933 cpl 1 July 2013 to 30 June 2014: 31.622 cpl Note: You must be registered for both GST and fuel tax credits to claim any entitlement to fuel tax credits.