Private ruling: Fuel tax credits
Date of advice: 14 April 2026
Published: 29 June 2026
Ruling period: 1 September 20XX to 31 December 20XX
Date scheme commenced: 1 September 20XX

Ruling: Q1: Is the methodology to apportion fuel used in your transport operation fair and reasonable? If the methodology is considered fair and reasonable, can it be applied retrospectively and prospectively? | A1: Yes. The methodology to apportion fuel is fair and reasonable and can be applied retrospectively subject to the four years' time limits, and prospectively.

Relevant facts and circumstances: You are registered for goods and services tax. You carry on an enterprise, providing transport services. You purchased and used taxable fuel in heavy vehicles with a gross vehicle mass (GVM) greater than 4.5 tonnes, and auxiliary equipment. You do not claim any fuel tax credits for fuel used in light vehicles travelling on a public road. Your methodology does not use ATO accepted percentages outlined in Practical Compliance Guideline PCG 2016/11 Fuel tax credits - apportioning taxable fuel used in a heavy vehicle with auxiliary equipment. Your apportionment methodology is a deductive methodology. You use telematics data and engine diagnostic data (over the life of the engine) as part of the methodology. You advised that you have undertaken robust review of the results and underlying data. Sample records were provided to support the methodology. You also advised the type of work and usage of the vehicles are substantially consistent (for the retrospective periods).

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 subsection 43-10(3) | Fuel Tax Act 2006 subsection 47-5(1) | Fuel Tax Regulation 2016

Reasons for decision: Summary: Section 41-5 of the Fuel Tax Act 2006 (FTA) provides that if you are registered for goods and services tax at the time you acquire the fuel, you are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, the indirect tax zone to the extent that you do so for use in carrying on your enterprise. To carry on your business, you operate heavy vehicles and auxiliary equipment. Fuel tax credits for fuel acquired for use in heavy vehicles are reduced by the road user charge to the extent that the fuel is used for travelling on a public road under subsection 43-10(3). You proposed a methodology to apportion fuel used in heavy vehicles for on road travels and other eligible uses. The FTA and Fuel Tax Regulation 2016 do not set out any methods that an entity must use to apportion taxable fuel. Fuel Tax Determination FTD 2010/1 Fuel tax: apportionment may apply when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 (FTD 2010/1) sets out the Commissioner's view on apportioning fuel tax credit entitlements. The Commissioner considers that an entity can use any apportionment methodology that is fair and reasonable in its circumstances. Relevantly, paragraphs 7 and 8 of FTD 2010/1 provide that: 7. You can use any apportionment method that is fair and reasonable in your circumstances to determine the fuel tax credit that is available for the taxable fuel that you acquire. 8. Where there is more than one fair and reasonable way of apportioning, you may choose any method as long as it is fair and reasonable in your circumstances. Effectively, you may choose any apportionment method or an established method, reliable measures and testing and sampling that is fair and reasonable to your circumstances and, can be supported by relevant documentary evidence. Your proposed methodology has utilised some known reliable measures to apportion and calculate fuel usage, including using telematics data and engine diagnostic data (over the life of the engine), and you have undertaken robust review of the results and underlying data. Your sample period and sample size is considered to be reasonable. The methodology is fair and reasonable for the purposes of calculating fuel tax credits. The method can be applied retrospectively and prospectively. In regards to applying the apportionment rate retrospectively, you advised the type of work and usage of the vehicles are substantially consistent. For retrospective claims, you will need to ensure the fuel tax credit is claimed within the four years' time limits. If the fuel tax credit is not claimed within this time the entitlement ceases under subsection 47-5(1) of the FTA. Further, you must keep records to support your fuel tax credit eligibility, the accuracy of fuel purchased and used, and the fuel tax credit claims. For prospective claims, the Commissioner is not in a position at the time of this ruling to examine future evidence. As such, you must keep records to support your fuel tax credit eligibility, the accuracy of fuel purchased and used, and the fuel tax credit claims. Your method will be fair and reasonable where the fleet and the type of work remain substantially consistent. You will need to update your methodology, even during the period of this ruling, should there be any material changes as this ruling will no longer apply from that point onwards.