Private ruling: Fuel tax credits - snow vehicles
Published: June 2013
Ruling period: 1 July 2008 to 30 June 2013
Date scheme commenced: 1 July 2008

Ruling: Q1: Are you entitled to a fuel tax credit at the full rate for taxable fuel acquired for use in operating your snow grooming vehicles for the period 1 January 2009 to 30 June 2012? | A1: No. | Q2: Are you entitled to fuel tax credit at the half rate for taxable fuel acquired for use in operating your snow grooming vehicles for the period 1 January 2009 to 30 June 2012? | A2: Yes. | Q3: Is the amount of your fuel tax credit for taxable fuel acquired for use in operating your snow transport vehicles reduced by the road user charge (RUC) for the period from 1 January 2009 to 30 June 2012? | A3: Yes.

Relevant facts and circumstances: You maintain roads throughout the year as part of your broader operations and responsibilities. During the declared snow season, roads are closed to private vehicles in accordance with regulations. During this time you operate a visitor transport and freight delivery using a specified fleet of vehicles. Snow groomers You groom cross country trails during the declared snow season using snow groomers. You state the trails are a combination of public roads, fire access trails and walking tracks. These areas are closed to private vehicles during the snow season and only emergency and registered maintenance vehicles fitted with snow tracks are permitted to operate on these trails during the declared snow season. You do not seek a ruling on these vehicles as these are not vehicles operated by you. You acquire taxable alpine diesel fuel for use in snow groomers used to maintain the cross country trails during the declared snow season for the use of skiers. One of these snow groomers has a gross vehicle mass (GVM) exceeding 4.5 tonnes and the other has a GVM of less than 4.5 tonnes. Whilst they can carry a passenger in addition to the operator they generally do not. Snow transport vehicles You also acquire alpine diesel for use in snow transport vehicles with a GVM of 5.8 tonnes. Similar to the snow groomers, these are equipped with snow tracks and not wheels. As the tracks are damaged by travel on hard surfaces they generally cannot be operated on roads not covered by snow. The vehicles can carry up to 10 people and are used to ferry guests around the resort i.e. to and from their lodges. You have advised as the lodges are generally built along road ways, this is the route the snow transport vehicles generally take as they cannot go through buildings or fences. They can and do use routes which are not on the road reserves. You have stated the roads are public roads and members of the public have access to these roads outside of the declared snow season, although they are closed for specific events. Only emergency and registered maintenance vehicles are authorised to use these roads at these times. You have stated that you are responsible for maintaining the village roads throughout the year and that these roads are closed in accordance with relevant regulations and legislation through winter. You may determine parts of the resort to which entry is prohibited, including for certain vehicles or classes of vehicle. You have advised alpine diesel is a fuel refined in a way which makes it less likely to be affected by cold weather. You acquire this fuel from a commercial fuel wholesaler excise paid.

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 subsection 43-10(3) | Fuel Tax Act 2006 subsection 43-10(4) | Fuel Tax Act 2006 paragraph 43-10(4)(c) | Fuel Tax (Consequential and Transitional Provisions) Act 2006 Division 2 of Schedule 3 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(1) to Schedule 3 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(3) to Schedule 3 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(4) to Schedule 3 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(5) to Schedule 3 | Fuel Tax (Consequential and Transitional Provisions) Act 2006 subitem 11(6) to Schedule 3 | Energy Grants (Credits) Scheme Act 2003 section 53 | Energy Grants (Credits) Scheme Act 2003 subsection 53(2) | Energy Grants (Credits) Scheme Act 2003 subsection 53(3) | Energy Grants (Credits) Scheme Act 2003 subsection 53(4) | Energy Grants (Credits) Scheme Act 2003 subsection 53(5) | Energy Grants (Credits) Scheme Act 2003 subsection 53(6) | Energy Grants (Credits) Scheme Act 2003 subsection 53(7)

Reasons for decision: Summary: Section 41-5 of the Fuel Tax Act 2006 (FTA) provides that you are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into Australia to the extent that you do so for use in carrying on your enterprise and are registered for goods and services tax (GST). However, this entitlement is affected by Division 2 of Part 3 of Schedule 3 to the (FTCTPA) which operates to restrict this entitlement to specific activities and continues the previous entitlement provisions of the Energy Grants (Credits) Scheme Act 2003 (EGCSA) for the period 1 July 2008 to 30 June 2012. Subparagraph's 11(1)(b)(i) and 11(1)(b)(ii) of the FTCTPA provide that an entitlement to a fuel tax credit arises under section 41-5 of the FTA if you acquire taxable fuel for use in a vehicle for travelling on a public road or for incidental use in relation to a vehicle covered by subparagraph (i). The fuel tax credit disentitlement provisions are contained in subdivision 41B of the FTA. Section 41-20 of the FTA provides there is no fuel tax credit for fuel used in vehicles with a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road. You acquire alpine diesel for use in snow groomers and a number of snow transport vehicles associated with your operations. During their activities, these vehicles travel over snow covered terrain including walking trails, fire access trails and roads. We must first consider if the snow covered terrain which includes what are ordinarily public roads are considered public roads during the declared snow season. | Detailed Reasoning - Public roads: 'Public road' is not defined in the FTA however, the Explanatory Memorandum to the Fuel Tax Bill 2006 states: 2.50 A road is a public road if it is: · opened, declared or dedicated as a public road under a statute; · vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or · dedicated as a public road at common law. 2.51 A road is not a public road if it is a: · road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime; · forestry road; · private access road for use in a mining operation; or · road that has not been dedicated as a public road over privately owned land. In your case, you are responsible for maintaining the roads throughout the year and that these roads are closed in accordance with relevant regulations and legislation through winter. You have stated these roads are public roads and members of the public have access to these roads outside of the declared snow season, although they are closed for specific events. However, during the declared snow season, roads are closed to private vehicles in accordance with regulations. For the majority of the snow season the roads are under snow and require snow tracks to be fitted to all vehicles. | Detailed Reasoning - Public roads under the common law: If a road is not under the control and management of a state or territory authority which is responsible for the provision of road infrastructure to the public, then whether the road is a 'public road' under the common law is a question of fact. In order to establish that a road has been dedicated as a public road at common law, there must be established an 'unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road'. To establish whether a land owner has dedicated a road as a public road under the common law, some of the matters to be considered are: · whether there has been a declaration of an intention to dedicate; · delineation on maps or plans of roads set apart for public use; · use by the public; · whether vehicles must be registered to use the road and state or territory traffic laws are applicable while the vehicles use the road; or · the expenditure of money by public bodies in forming or maintaining the land as a road. Furthermore, the Commissioner considers that where the public does not have a plenary right of access and use, a road cannot be characterised as a public road. Accordingly, as the roads can be closed by you during the declared snow season, which in line with regulations restricts the use of the roads by the public and as you can prohibit entry of certain vehicles or classes of vehicle, we accept that the roads during the declared snow season are not public roads. You acquire alpine diesel for use in snow groomers and a number of snow transport vehicles associated with your operations. During their activities, these vehicles travel over snow covered terrain including walking trails, fire access trails and roads. The snow groomers are used to maintain the cross country trails during the declared snow season for the use of skiers and the husky vehicles can carry up to 10 people and are used to ferry guests around the resort i.e. to and from their lodges. | Detailed Reasoning - Snow groomers: As your snow groomers are not considered to be travelling on a public road, they do not meet the requirements for a fuel tax credit under subparagraph's 11(1)(b)(i) or (ii) of Schedule 3 to the FTCTPA. However, subitems 11(3) and 11(5) of Schedule 3 of the FTCTPA provide that you are entitled to a fuel tax credit under section 41-5 of the FTA if you would have been entitled to an on or an off-road credit under the EGCSA. In both cases, 11(3) and 11(5) provide you can disregard the registration requirement for vehicles as originally prescribed under the EGCSA. Subitem 11(4) of the FTCTPA goes on to state that if subitem 11(3) applies, you are deemed for the purposes of section 43-10 of the FTA to have acquired the fuel to use, in a vehicle, for travelling on a public road. In this context the road user charge (RUC) will still apply. | Detailed Reasoning - On-road credit under the EGCSA: Section 43 of the EGCSA provided that you were entitled to an on-road credit for fuel used in operating a registered vehicle on a road [emphasis added] with a GVM of 4.5 tonnes or more, but less than 20 tonnes, if the vehicle was a vehicle for transporting passengers or goods, and is undertaking a journey across a metropolitan boundary or wholly outside a metropolitan boundary. In your case you operate snow groomers - some with a GVM of greater than 4.5 tonnes and some with a GVM of less than 4.5 tonnes. Whilst you state they could transport an additional passenger, to determine if a vehicle is for transporting passengers or goods consideration is given to its design. The design of a vehicle may assist in determining whether it is a type of vehicle for carrying passengers or goods. Examples of vehicles for transporting passengers or goods include buses and tanker trucks. Examples of vehicles not for transporting passengers or goods include mobile cherry-pickers, mobile cranes and front-end loaders. In the case of a snow groomer, whilst it may be able to carry a passenger, transportation of passengers would not be considered an integral part of the design of the vehicle. As such, your line snow groomers are not designed to carry passengers or goods. Furthermore, some of your groomers have a GVM of less than 4.5 tonnes. Accordingly, you would not be entitled to an on-road credit under the EGCSA and as such, subitem 11(3) of the FTCTPA does not apply. | Detailed Reasoning - Off-road credit: If an activity is not eligible for fuel tax credits under the on-road provisions of subitem 11(1) of Schedule 3 of the FTCTPA, there may be an entitlement under the off-road provisions of subitem 11(5) of Schedule 3 to the FTCTPA, which provides that you are entitled to a fuel tax credit if you would have been entitled to an off-road credit under the EGCSA. Section 53 of the EGCSA states that you are entitled to an off-road credit if you purchase fuel for a use by you that qualifies. Subsections 53(2) to 53(7) of the EGCSA specify the uses that qualify for an off-road credit, as follows: · mining operations · primary production which includes agriculture, fishing operations and forestry · marine or rail transport · generation of electricity for use at certain premises · use in certain industrial processes · uses other than as a fuel in various applications e.g. as a solvent, a mould release agent or in road construction · uses other than in an internal combustion engine where the fuel is of a kind specified in the regulations The use of diesel in your snow groomers to maintain cross country trails during the declared snow season for the use of skiers is not a use that qualifies. Accordingly, you would not be entitled to an off-road credit under the EGCSA and as such, subitem 11(5) of the FTCTPA does not apply. | Detailed Reasoning - Half credit: However, subitem 11(6) of Schedule 3 to the FTCTPA provides that an entitlement to a fuel tax credit under section 41-5 of the FTA arises if you would not have been entitled to a credit previously. That is if, during the period 1 July 2008 to 30 June 2012, you acquire taxable fuel for use in carrying on your enterprise, and were not entitled to a credit previously, then you are entitled to a fuel tax credit equal to half of the amount of the full fuel tax credit. As you were not entitled to either an on-road or off-road credit for the fuel you acquired and used in your snow groomers - with a GVM both greater than and less than 4.5 tonnes, you are entitled to a fuel tax credit at the half rate under subitem 11(6) of the FTCTPA for the period 1 January 2009 to 30 June 2012. | Detailed Reasoning - Snow transport vehicles: As your snow transport vehicles are not considered to be travelling on a public road, they do not meet the requirements for a fuel tax credit under subparagraph's 11(1)(b)(i) or (ii) of Schedule 3 to the FTCTPA. | Detailed Reasoning - On-road credit under the EGCSA: As highlighted above, section 43 of the EGCSA provided that you were entitled to an on-road credit for fuel used in operating a registered vehicle on a road [emphasis added] with a GVM of 4.5 tonnes or more, but less than 20 tonnes, if the vehicle was a vehicle for transporting passengers or goods, and is undertaking a journey across a metropolitan boundary or wholly outside a metropolitan boundary. In the case of the snow transport vehicles they have a GVM greater than 4.5 tonnes. The Commissioner also accepts that they are a vehicle for transporting passengers or goods as they are used to ferry guests around the resort i.e. to and from their lodges. However, they can and do use routes which are not on the road reserves. Furthermore, the meaning of 'metropolitan areas' was defined in section 6 of the EGCSA. Within this meaning, it did not include your operating area. As such, you operate the snow transport vehicles in an area wholly outside a metropolitan boundary for the purposes of section 43 of the EGCSA. Accordingly, you would have been entitled to an on-road credit. As you were entitled to an on-road credit under the EGCSA, subitem 11(3) of the FTCTPA applies. | Detailed Reasoning - Application of the road user charge: However, subitem 11(4) of the FTCTPA provided that if subitem 11(3) applied, you are taken, for the purpose of subsection 43-10(3) of the FTA to have acquired the fuel 'to use, in a vehicle, for travelling on a public road'. Therefore, as the snow transport vehicles would have been entitled to an on-road credit under the EGCSA, subitem 11(3) of the FTCTPA allows for a fuel tax credit and subitem 11(4) of the FTCTPA applies to reduce the amount of fuel tax credit by the RUC. Accordingly, you are entitled to a fuel tax credit at the full rate of 38.143 cents per litre less the road user charge for diesel acquired for use in your snow transport vehicles for the period 1 January 2009 to 30 June 2012.