Private ruling: Fuel tax credits
Date of advice: 6 April 2018
Published: July 2018
Ruling period: 2015 - 2016 income year | 2016 - 2017 income year | 2017 - 2018 income year
Date scheme commenced: 1 July 2015

Ruling: Q4: The ruling concerned what was a fair and reasonable method for calculating a fuel tax credit entitlement for apportioned fuel where fuel is acquired and the amount of duty paid on its temperature corrected (15° Celsius) measured volume is known. The Commissioner ruled that where fuel is apportioned, the fuel tax amount of the apportioned fuel should be reflective of the proportion of fuel used in eligible activities with respect to the total quantity of fuel acquired. Any method in which the amount of fuel tax credit claimed did not exceed the fuel tax amount calculated using the volume of apportioned fuel corrected to 15° Celsius would be fair and reasonable.


Relevant legislative provisions: Fuel Tax Act 2006 section 2-1 | Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 Subdivision 41-B | Fuel Tax Act 2006 Division 43 | Fuel Tax Act 2006 subsection 43-5(1) | Fuel Tax Act 2006 subsection 43-5(2) | Fuel Tax Act 2006 subsection 43-5(2A) | Fuel Tax Act 2006 section 43-10 | Fuel Tax Act 2006 section 43-6 | Fuel Tax Act 2006 Division 70 | Fuel Tax Act 2006 section 70-5 | Fuel Tax Act 2006 section 110-5 | Excise Act 1901 section 4 | Excise Act 1901 subsection 54(1) | Excise Act 1901 section 65 | Excise Tariff Act 1921 Schedule 1 | Customs Tariff Act 1995 section 9 | Customs Act 1901


Question 1: This ruling concerned whether an entity was entitled to claim fuel tax credits. | The Commissioner ruled that the entity was entitled to claim fuel tax credits for taxable fuel acquired for use in carrying on its enterprise. | Question 2: The ruling concerned whether the methodology used by an entity to calculate its fuel tax credit entitlement was fair and reasonable. | The Commissioner ruled that the methodology used by the entity to calculate its fuel tax credit entitlement was fair and reasonable provided the methodology reflects the extent to which taxable fuel is acquired for an eligible activity. Notably, where fuel is apportioned, the fuel tax amount of the apportioned fuel should be reflective of the proportion of fuel used in eligible activities with respect to the total quantity of fuel acquired. | Question 3: The ruling concerned what type of equipment the entity can use for apportioning fuel to calculate its fuel tax credit entitlement and whether the method was fair and reasonable. | The Commissioner ruled that the legislation does not set out any methods that an entity must use to apportion taxable fuel. An entity may use more than one apportionment method for different fuel types, different activities or different types of vehicles, equipment or machinery. | However any method used to apportion fuel needs to be reviewed to determine if there are any circumstances that may distort results, (for example, acquisitions or events requiring a larger quantity of fuel usage) and to ensure the method does not apportion more taxable fuel than the entity has acquired.