Private ruling: Fuel tax credits - use of fuel for refrigeration
Published: November 2013
Ruling period: 1 July 2013 to 30 June 2015
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to fuel tax credits for taxable fuel acquired for use, in powering refrigerated delivery compartments, in vehicles that have a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road? | A1: No. | Q2: Are you entitled to claim fuel tax credits on a prospective basis and retrospective basis going back four years, for a percentage of diesel acquired for use in operating the refrigeration compartments on your delivery fleet vehicles with a GVM of 4.5 tonnes or less travelling on a public road? | A2: No.

Relevant facts and circumstances: You were registered for goods and services tax and fuel tax credit from a specified date. You operate a business and use your own fleet of vehicles to deliver the customers' orders around Australia. The entire fleet of vehicles have a refrigerated delivery compartment affixed used for maintaining products at an appropriate temperature to prevent spoilage. The vehicles have a gross vehicle mass of less than 4.5 tonnes. Diesel is acquired for use in the vehicles. The refrigeration unit is fuelled from the same fuel tank which is used to propel the vehicle. You do not currently claim any fuel tax credits in respect of the fuel that you use for the operation of your delivery fleet.

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 section 41-B | Fuel Tax Act 2006 section 41-20 | Fuel Tax Act 2006 subsection 43-10(3)

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 in Australia to the extent you do so for use in carrying on your enterprise, if you are registered for GST. The disentitlement provisions to a fuel tax credit are contained in Subdivision 41-B of the FTA. Section 41-20 of the FTA states: You are not entitled to a fuel tax credit for taxable fuel to the extent that you acquire, manufacture or import the fuel for use in a vehicle with a gross vehicle mass of 4.5 tonnes or less travelling on a public road. Section 41-20 of the FTA focuses on whether fuel is for use in a vehicle travelling on a public road. This is in contrast to subsection 43-10(3) of the FTA which refers to a particular use of fuel in a vehicle travelling on a public road. Subsection 43-10(3) of the FTA states: To the extent that you acquire, manufacture or import taxable fuel to use, in a vehicle, for travelling on a public road, the amount of your fuel tax credit for the fuel is reduced by the amount of the road user charge for the fuel. In Linfox Australia Pty Ltd and Commissioner of Taxation [2012] AATA 517 (Linfox) the issue to be decided by the AAT was whether fuel acquired by the applicant for use in a refrigeration unit in a refrigerated trailer travelling on a public road was fuel that fell within subsection 43-10(3) of the FTA and as such, if fuel tax credit entitlement was reduced by the road user charge (RUC). The AAT found that the punctuation in the phrase 'fuel to use, in a vehicle, for travelling on a public road' in subsection 43-10(3) of the FTA meant that, in order for the provision to apply, fuel must be acquired both: · to use in a vehicle; and · to use for travelling on a public road [our emphasis]. Paragraph 23E of FTR 2008/1 - Fuel tax: vehicle's travel on a public road…and the road user charge , which deals specifically with subsection 43-10(3) of the FTA, provides that the expression 'for travelling' does not include fuel used for a purpose unrelated to a vehicle's movement on a public road. At example 9A of FTR 2008/1 it is demonstrated that fuel used to power the refrigeration unit of a refrigerated trailer is not for travelling. Further, the location of the fuel is not determinative. However, section 41-20 refers to fuel for use in a vehicle without the further requirement that it be 'for travelling' on a public road. At paragraph 43 of the Linfox decision the AAT states in part that: 43. It is significant, in our view, that the word "for" does not precede the phrase "travelling on a public road" in s 41-20 but it does in s 43-10(3). In other words, there is a clear intention emerging from s 41-20 to ensure that in the case of a light vehicle, the fuel tax credit is to be denied for all on-road applications of taxable fuel in the vehicle. … It follows that, taxable fuel used for powering the refrigeration unit of a vehicle with a gross vehicle mass of 4.5 tonnes or less travelling on a public road falls within section 41-20 of the FTA such that a fuel tax credit for the fuel is denied. Accordingly, you are not entitled to fuel tax credits for taxable fuel acquired for use, in powering refrigerated delivery compartments, in vehicles that have a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road. As such, you are not entitled to claim fuel tax credits on a prospective basis and retrospective basis going back four years, for a certain percentage of diesel acquired for use in operating the refrigeration compartments on your delivery fleet vehicles with a GVM of 4.5 tonnes or less travelling on a public road.