Private ruling: Fuel tax credits
Published: February 2015
Ruling period: From 1 October 2009
Date scheme commenced: 1 October 2009

Ruling: Q1: For the tax periods from 1 October 2009 to 30 June 2012, does item 11 of the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (the Transitional Act) apply to the fuel acquired for use in powering your auxiliary equipment? | A1: No | Q2: For the tax periods from 1 October 2009 to 30 June 2014, does subsection 43-10(3) of the Fuel Tax Act 2006 (the FTA) apply to the fuel acquired for use in powering your auxiliary equipment? | A2: No

Relevant facts and circumstances: • You provide logistics services. • You acquire and use fuel in vehicles with a gross vehicle mass of greater than 4.5 tonnes (heavy vehicle) that travel on a public road. • All of the vehicles are manufactured after 1 January 1996. • A number of the vehicles have auxiliary equipment affixed. The auxiliary equipment is used to load and unload goods from the vehicles. • The vehicles must be in idle for the auxiliary equipment to operate.

Relevant legislative provisions: Energy Grants (Credits) Scheme Act 2003 Section 8 | Fuel Tax Act 2006 Subsection 43-10(3) | Fuel Tax (Consequential and Transitional Provisions) Act 2006 Item 11 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 Sub-item 11(1)

Reasons for decision: Summary: No, item 11 of the Transitional Act does not apply to the fuel acquired for use in powering the auxiliary equipment of the vehicles for the tax periods from 1 October 2009 to 30 June 2012. | Detailed Reasoning - Detailed reasoning: Item 11 of the Transitional Act applied to fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia between 1 July 2009 and 30 June 2012. Subitem 11(1) of the Transitional Act states that Item 11 of the Transitional Act applies if: (a) you acquire, manufacture or import taxable fuel between 1 July 2008 and 30 June 2012 (inclusive); and (b) you acquire, manufacture or import the fuel for use in carrying on your enterprise, other than: i. for use in a vehicle travelling on a public road; or ii. for incidental use (within the meaning of section 8 of the Energy Grants Act) in relation to a vehicle covered by subparagraph (i)… You use auxiliary equipment, which are affixed to vehicles that travel on a public road, to load and unload goods. These vehicles are used to conduct your business operations and travel on public roads. Section 8 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) states that powering the auxiliary equipment in or on a vehicle, while the goods to be transported are being loaded or goods transported are unloaded, is an incidental use of fuel, in relation to that vehicle. As the fuel you acquire for use in powering the auxiliary equipment of your heavy vehicles falls within the meaning of incidental use under the EGCSA, item 11 of the Transitional Act does not apply to the fuel. | Summary: No, subsection 43-10(3) of the FTA does not apply to fuel acquired for use in powering the auxiliary equipment of the vehicles in the tax periods 1 October 2009 to 30 June 2014. | Detailed Reasoning - Detailed reasoning: If you acquire, manufacture or import into Australia, fuel for use in a heavy vehicle, for travelling on a public road, subsection 43-10(3) of the FTA states that your fuel tax credit (FTC) for the fuel is reduced by the amount of the road user charge. Paragraphs 23A to 23E of 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 explain the Commissioner's view of the meaning of the phrase 'taxable fuel to use, in a vehicle, for travelling on a public road' in subsection 43-10(3) of the FTA. Essentially, the Commissioner considers that fuel used 'for travelling': …encompasses not only fuel for propulsion, but also fuel for aspects of the vehicle's function and operation that are for the purpose of travelling on a public road. Fuel for travelling would include fuel used for stopping and idling while stationary in the course of a journey as well as the use of lights, brakes, power steering and windscreen wipers. … The expression 'for travelling' does not include fuel used for a purpose unrelated to a vehicle's movement on a public road. The auxiliary equipment is used to load and unload goods and the vehicles must be in idle for the auxiliary equipment to operate. As such the auxiliary equipment is equipment of the vehicle that is not for the purpose of the vehicle's movement on a public road. As the fuel you acquire for use in powering the auxiliary equipment of your heavy vehicles is not used for propelling the vehicle or for any aspects of the vehicle's movement on a public road, subsection 43-10(3) of the FTA does not apply to the fuel.