Private ruling: Fuel tax credits in respect to public roads and apportionment
Published: August 2014
Ruling period: 1 July 2009 to 30 June 2014
Date scheme commenced: 1 July 2009

Ruling: Q1: Are certain roads considered to be 'public roads' for the purposes of section 41-20 of the Fuel Tax Act 2006 (FT Act)? | A1: No, the roads are not public roads for the purposes of section 41-20 of the FT Act. | Q2: Does the proposed method for apportioning taxable fuel used in your vehicles, plant and equipment and generators result in a fair and reasonable apportionment? | A2: Yes. The proposed method of apportionment is considered fair and reasonable in your circumstance.

Relevant facts and circumstances: You query whether certain roads are public roads for the purposes of section 41-20 of the FT Act. You advise that the roads have not been declared or dedicated as public roads under any Commonwealth or State/Territory statute. Further, there is no intention to dedicate these roads as public roads. No statute or act of parliament has been identified under which the roads have been declared or dedicated as public roads. You are currently registered for Goods and Services Tax (GST). Methodology in determining fuel tax credit entitlement Currently, the entity determines its fuel tax credit entitlement based on source documents such as fuel invoices issued by suppliers and log records/fuel usage registers. The fuel purchased is used to fill fuel tanks at a fuelling station. All vehicles and off road plant and equipment are filled directly from these fuel tanks. The heavy or light vehicles are used during every occasion either solely for private purposes or solely for business purposes. The heavy vehicles are not used for any private purposes. The vehicles' fuel tanks are full at the commencement of their use and topped up with fuel at the end of each use. The quantity of fuel used on that occasion will be recorded. In addition, plant and equipment are brought to the fuelling station. The plant and equipment are only used in carrying on your enterprise. There is no private use of the plant and equipment. The quantity of fuel used to fill the fuel tanks of the plant and equipment is recorded. It follows that, the fuel usage register will disclose the quantity of fuel used in heavy vehicles, light vehicles and plant and equipment. A person makes an entry in a fuel usage register for each fill up. The fuel data recorded on the fuel register is transferred to a fuel log record (which is an excel spread sheet). The log record sets out the date of each fill up, the number of litres of fuel taken and details of how the fuel is used. In respect of fuel usage, it is recorded as one of the following categories: • ineligible usage; • off road plant and equipment including pumps; and • road transport (each of the vehicles is identified by a specific registration number). You have treated the fuel used in light vehicles used for personal or private purposes as for an 'ineligible usage'. Subject to the outcome of this ruling you propose that fuel used in the course of the entity's enterprise, in regard to light vehicles, will no longer be treated as 'ineligible usage'. The 'road transport' category refers to heavy vehicles. At the end of each month, the fuel consumed in respect to road transport, plant and equipment and ineligible usage is recorded in the log record. The relevant fuel tax credit rates are applied to determine the entity's monthly fuel tax credit entitlement. Specifically: • road transport (at the heavy vehicle rate of $0.12003 per litre for 2013/14); • off road plant and equipment (at the rate of $0.316220 per litre for 2013/14); and • ineligible usage - at 0%. The difference between the total fuel purchased for the month (as per the tax invoice for the fuel) and the amount of fuel recorded on the monthly log record for each usage category, and the wastage allowance, is attributed to power generators. Therefore, the total fuel purchased, minus, the fuel recorded on the log record and the wastage allowance = the fuel attributed to the power generators. The fuel tax credit for the fuel attributed to power generators is claimed at the off road rate of $0.316220 per litre for 2013/14 and was claimed at the full rate prior to 1 July 2012.

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

Reasons for decision: Detailed Reasoning - Issue 1:: Are certain roads considered to be 'public roads' for the purposes of section 41-20 of the FT Act? Section 41-20 of the FT Act provides that 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. While the relevant areas are not generally open to the public, the various paths, tracks and roads used by vehicles travelling from one place to another within the area may fall within this definition and are considered to be 'roads' for the purposes of the FT Act. This ruling considers whether roads, other than forestry roads, are public roads for the purposes of the FT Act. 'Public road' is not a defined term in the FT Act. However, 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 , provides guidance in respect of the meaning of roads and public roads for the purposes of subsections 43-10(3) and 43-10(4) of the FT Act. Whilst these provisions deal with the application of the road user charge to a fuel tax credit for fuel used in a heavy vehicle, for travelling, on a public road, the principles for determining if a road is a public road are applied where the phrase 'public road' is used throughout the FT Act. Paragraph 44 of FTR 2008/1, explains that a road is a public road if: • it is opened, declared or dedicated as a public road under a statute; • it is vested in a government authority having statutory responsibility for the control and management of public road infrastructure; or • it is dedicated as a public road at common law. Consideration is given to the criteria in respect of the roads that are the subject of this ruling: | Detailed Reasoning - Opened, declared or dedicated as a public road under statute: You advised that the roads have not been declared or dedicated as public roads under any Commonwealth or State/Territory statute. Further, there has been no intention to dedicate these roads as public roads. | Detailed Reasoning - Vested in a government authority having statutory authority for public roads for the control and management of public road infrastructure: Paragraphs 123 and 124 of FTR 2008/1 explain that roads which are constructed, managed or maintained by a statutory authority of a state or territory that has responsibility over roads for public use, are public roads. The relevant roads are not maintained and provided for general public usage as the roads are provided solely to meet local needs, with any other use being incidental to this purpose. In summary, the roads are not constructed or maintained by a local government authority for general public usage. | Detailed Reasoning - 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' for a road to be dedicated as a public road at common law. The factors to be considered in determining whether an owner of land has dedicated it as a public road under the common law include: • 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 (indicating acceptance of the dedication); • whether vehicles must be registered to use the road and state or territory traffic laws are applicable while the vehicles use the road; and • the expenditure of money by public bodies in forming or maintaining the land as a road. We will address these factors as follows: Declaration of an intention to dedicate All of the information provided indicates that there has not been any declaration or an intention to dedicate any roads as public roads. Delineation on maps or plans of roads set apart for public use According to your ruling submission, the roads in question are not shown on any maps with any degree of precision. Use by the public In your ruling submission you advised that the general public does not have a public right of way over any of the roads. Vehicle registration For practical (rather than legislative) reasons, these vehicles are voluntarily registered. Expenditure of money by public bodies in forming or maintaining the land As stated above, the entity is responsible for managing, maintaining and constructing roads however it does not have any ownership or authority over the roads it constructs and maintains. We have weighed up all factors and on balance we consider that in respect of the roads in question, there is no evidence of an 'unequivocal indication of the intention of the owner of the land to dedicate it to the public as a road'. Consequently, these roads do not satisfy the requirement to be a dedicated public road at common law. On the basis the roads have not been: • opened, declared or dedicated as public roads under a statute; • vested in a government authority that has responsibility for the control and management of public road infrastructure • dedicated as a public road under common law, the roads are not 'public roads' for the purposes of the FT Act. | Detailed Reasoning - Issue 2:: Does the proposed method for apportioning taxable fuel used in your vehicles, plant and equipment and generators result in a fair and reasonable apportionment? Guidance on whether a method of apportionment is fair and reasonable in the circumstances is provided for in Practice Statement Law Administration (PSLA) 2010/3 - Apportionment for the purposes of the Fuel Tax Act 2006. Relevantly, the following apportionment methodologies are stated at: • paragraph 21: constructive method - actual use • paragraph 35: deductive method - actual use You propose to calculate the amount of fuel used in the light and heavy vehicles and the plant and equipment (constructive method) and subtract that amount from the total fuel acquired for the period to determine the quantity of fuel used in power generation (deductive method). As such, your method of apportionment is a combination of the constructive method-actual use, and deductive method-actual use. We consider that the methods you propose to determine the fuel consumed by your vehicles, plant and equipment and generators is a fair and reasonable apportionment methodology.