Private ruling: Fuel tax credits
Date of advice: 12 September 2019
Published: November 2019
Ruling period: 2019 - 2020 income year | 2020 - 2021 income year | 2021 - 2022 income year | 2022 - 2023 income year
Date scheme commenced: 1 July 2019

Ruling: Q1: Are you entitled to a fuel tax credit at the full rate for taxable fuel you acquired for use in your plant and equipment when used in the quarry as part of your enterprise? | A1: Yes | Q2: Is it fair and reasonable to apportion 5% of the total fuel used in your prime movers exceeding 4.5 tonnes gross vehicle mass (GVM) that travel on both public and non-public roads and tow tipping equipment, for powering the tipping equipment via a power take off as well as for use in the vehicles when not travelling on public roads? | A2: Yes

Relevant facts and circumstances: You are registered for goods and services tax (GST). Your business activities involve off road operation within the quarry to extract materials and you use your heavy vehicles to transport the quarried materials to the various sites as required. You purchased and used taxable fuel in your plant and equipment to extract the materials in the quarry. The plant and equipment operates in the quarry only, and do not enter any public roads. You have never claimed any fuel tax credits for any fuel consumed by the plant and equipment. Your prime movers are heavy vehicles exceeding 4.5 tonnes gross vehicle mass (GVM). The vehicles are used to transport the quarried materials to the various sites as required. Your prime movers tow tipper trailers/side tipper trailers (auxiliary equipment) whilst travelling both on public roads and off public roads. The auxiliary equipment is powered through a power take off unit which draws power from the engine while the vehicle is idling and, as such, fuel is used in the vehicle to operate the auxiliary equipment. You operate the auxiliary equipment at various locations including job sites, quarry and other locations as required. You propose to apportion 5% of the total fuel used in your prime movers for powering the auxiliary equipment and for when the vehicle is not travelling on a public road. The fuel tax credits for this 5% of fuel will not be reduced by the road user charge.

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 section 47-5 | Fuel Tax Act 2006 subsection 65-5(1)

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 (GST) 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. You are registered for GST. | Detailed Reasoning - Fuel used in the quarry: You purchased and used taxable fuel in your plant and equipment to extract materials within the quarry as part of your enterprise. The diesel is consumed by the plant and equipment whilst operating within the confines of the quarry only and do not enter any public roads. Accordingly, the purchase and use of taxable fuel for the activity described above satisfies the fuel tax credit entitlement provision and you are therefore eligible to claim fuel tax credits at the full rate for this activity. | Detailed Reasoning - Fuel used to power auxiliary equipment: You use prime movers which are heavy vehicles exceeding 4.5 tonnes gross vehicle mass (GVM) to transport the quarried materials to various sites. Your prime movers tow tipper trailers/side tipper trailers (auxiliary equipment) whilst travelling on a public road. The auxiliary equipment is powered through a power take off. Fuel used to power auxiliary equipment is sourced from the same tank that fuels the main engine of the vehicle. You also use the prime movers off public roads. You propose to apportion 5% of the total fuel used in your heavy vehicles for powering the auxiliary equipment and when the vehicle is not travelling on a public road. Based on the information you have provided, we consider that it would be fair and reasonable to apportion 5% of fuel consumed by the prime movers with tippers/side tippers for all off-road use of the prime movers (including the auxiliary equipment and off-road travel or idling) at the full rate. That is, fuel tax credit rate for this 5% of fuel does not have to be reduced by the road user charge.