Private ruling: Fuel tax credits - resident agent
Published: July 2012
Ruling period: 2010-11 income year | 2011-12 income year | 2012-13 income year
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim fuel tax credits as resident agent for a non-resident shipping operator (NRSO) where: · the importation or acquisition of fuel is made through you as resident agent · the NRSO is either registered or required to be registered for GST purposes under the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) · the NRSO is not a member of a GST group | A1: Yes. | Q2: Are you required to provide a comprehensive package of supporting and complimentary goods and services to the NRSO, in addition to the provision of fuel bunker services, as a condition precedent to entitlement to claim fuel tax credits as resident agent for a NRSO? | A2: No.

Relevant facts and circumstances: You are a maritime services provider, offering a broad range of shipping-related services including berthing, spare parts, maintenance, surveying, provisioning of water, fuel bunkers and food, crewing, cargo management and handling. You provide these maritime services to Australian resident and foreign based (i.e. non-resident) ship operators (owners and charterers of ships). It is a commercial practice for some resident agents to refer a NSRO to you for the provision of fuel bunkers, which you provide under a separate agency agreement between you and the NSRO. The referring agent retains their agency agreement for the provision of other maritime services to the NSRO. You state that the following statement from the ATO publication Bunker fuel and commercial shipping refers to the scope of services typically provided by a resident shipping agent, but that the statement does not infer that a comprehensive package of services must be provided, in addition to the provision of bunker fuel, for the entity to be considered a resident shipping agent: "A resident shipping agent is a resident agent who provides shipping operators with a comprehensive package of supporting and complimentary goods and services , often including the provision of bunker fuel." [emphasis added] You are registered for goods and services tax (GST).

Relevant legislative provisions: Fuel Tax Act 2006 section 70-30 | A New Tax System (Goods and Services Tax) Act 1999 Division 57 | A New Tax System (Goods and Services Tax) Act 1999 section 57-10 | A New Tax System (Goods and Services Tax) Act 1999 subsection 57-10(1) | A New Tax System (Goods and Services Tax) Act 1999 paragraph 57-10(1)(a) | A New Tax System (Goods and Services Tax) Act 1999 paragraph 57-10(1)(b) | A New Tax System (Goods and Services Tax) Act 1999 subsection 57-10(2) | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: Section 70-30 of the Fuel Tax Act 2006 (FTA) provides that where an entity is a 'resident agent', the fuel tax law applies to the entity and its fuel tax credits, net fuel amount and fuel tax adjustments in the corresponding way to the way in which Division 57 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) applies to the entity. Under the basic rules for GST, an entity making a creditable acquisition is entitled to the input tax credits for that acquisition. However, if you are a resident and an agent under general law for a non-resident principal who makes creditable acquisitions through you, then you are entitled to the input tax credit on the acquisitions and not the non-resident principal. These transactions are made through you as an agent where you have the authority of the non-resident principal to make those transactions on its behalf. Creditable acquisitions may be made for the non-resident principal if it is registered or required to be registered for GST. You will need to make reasonable enquiries to establish the non-resident's GST registration status or requirement to be registered. Subsection 57-20(1) of the GST Act stipulates that the resident agent is required to be registered where the non-resident principal is registered or required to be registered for GST. Division 57 of the GST Act effectively makes resident agents acting for non-residents responsible for the GST consequences of taxable supplies and creditable acquisition the non-residents make through their resident agents. In respect of non-resident's creditable acquisitions made through resident agents, section 57-10 of the GST Act ensures that the resident agent is the only entity eligible to claim the relevant input tax credit. Specifically, section 57-10 provides: (1) If a non-resident makes a creditable acquisition or creditable importation through a resident agent: (a) the agent is entitled to the input tax credit on the acquisition or importation; and (b) the non-resident is not entitled to the input tax credit on the acquisition or importation. (2) This section has effect despite sections 11-20 and 15-15(which are about who is entitled to input tax credits). A resident agent is defined in section 195-1 of the GST Act as: Resident agent means an agent that is an Australian resident A resident agent claiming input tax credits pursuant to Division 57 of the GST Act for its non-resident principals would need to demonstrate that the relevant acquisition was a creditable acquisition made within the terms of the agency arrangement and that the amount claimed is correct. In the situation you have described, in your capacity as the resident agent you acquire fuel for your principal, a non-resident shipping operator (NRSO), that is either registered or required to be registered for GST and it is not a member of a GST group. Where these requirements are met, section 70-30 of the FTA applies such that the fuel tax credit entitlement is treated in the same manner as an input tax credit would be by the operation of Division 57 of the GST Act. This means that you, as the resident agent, are entitled to the fuel tax credit on the acquisition of the fuel. | Detailed Reasoning - Provision of supporting and complimentary goods and services: Some resident agents refer a NSRO to you for the provision of fuel bunkers, which you provide under a separate agency agreement between you and the NSRO. The referring agent retains their agency agreement for the provision of other maritime services to the NSRO. You state that the following statement refers to the scope of services typically provided by a resident shipping agent, but that the statement does not infer that a comprehensive package of services must be provided, in addition to the provision of bunker fuel, for the entity to be considered a resident shipping agent: "A resident shipping agent is a resident agent who provides shipping operators with a comprehensive package of supporting and complimentary goods and services , often including the provision of bunker fuel." [emphasis added] Neither section 70-30 of the FTA nor Division 57 of the GST Act place the requirement for a resident agent to provide such services, even though it is generally accepted that a resident agent would undertake such services in their role as a resident shipping agent. Therefore, you are not required to provide a comprehensive package of supporting and complimentary goods and services to the NRSO, in addition to the provision of fuel bunker services, as a condition precedent to entitlement to claim fuel tax credits as resident agent for a NRSO. You must, however, must be able to reasonably demonstrate that you acquire the fuel in your capacity as resident agent for the NRSO.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.