Private ruling: Fuel Tax Credits - Use of petrol in aircraft
Published: June 2013
Ruling period: 1 July 2012- 13 income year | 1 July 2013-14 income year | 1 July 2014-15 income year
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to fuel tax credits for taxable fuel (petrol) you acquire and use in your aircraft as part of carrying on your enterprise? | A1: Yes. | Q2: Are you entitled to fuel tax credits at the full rate of 38.143 cents per litre (CPl) for the petrol you acquire and use in your aircraft as part of carrying on your enterprise? | A2: No. The rate of fuel tax credits you can claim for the relevant tax periods are: 1 July 2012 to 30 June 2013 - 32.623 cpl 1 July 2013 to 30 June 2014 - 32.347 cpl 1 July 2014 to 30 June 2015 - 32.047 cpl.

Relevant facts and circumstances: You are registered for goods and services tax (GST) You provide services and have acquired an aircraft in order to service your clients located in remote locations. You acquire petrol for use in the aircraft. The fuel is purchased through small retail outlets, which primarily consists of service stations. Your invoices for the fuel do not show the amount of excise duty paid but include the number of litres purchased, price per litre and total cost. You advised that the fuel is purchased at the going market rate for normal commercial transactions. Assumption(s) The petrol you acquire for use in your aircraft is not fuel that was entered into home consumption [domestic market] for use as fuel in an aircraft. The fuel you acquire is not covered by the Opt-in Scheme from 1 July 2013.

Relevant legislative provisions: Fuel Tax Act 2006 41-5 | Fuel Tax Act 2006 section 41-30 | Fuel Tax Act 2006 subsection 41-30(1) | Fuel Tax Act 2006 subsection 41-30(2) | Fuel Tax Act 2006 section 43-5 | Fuel Tax Act 2006 section 43-8 | Fuel Tax Act 2006 subsection 43-8(1) | Fuel Tax Act 2006 section 43-11

Reasons for decision: Detailed Reasoning - Question 1 - Entitlement to fuel tax credit: 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 for use in carrying on your enterprise, if you are registered for goods and services tax (GST). Subsection 41-30(1) of the FTA states that you are not entitled to a fuel tax credit for taxable fuel you acquire for use as fuel in aircraft if the fuel was entered for home consumption [domestic market] for that use. You acquire petrol which is a taxable fuel for use in your business. You purchase this from service stations at the going market rate for normal commercial transactions and as such an assumption has been made that this fuel was not entered for home consumption for use as fuel in an aircraft. Therefore, section 41-30 does not prevent you from being entitled to a fuel tax credit in respect to the petrol you acquire for use in your aircraft. Accordingly, you are entitled to fuel tax credits for taxable fuel (petrol) you acquire and use in your aircraft as part of carrying on your enterprise. Note: Subsection 41-30(2) of the FTA provides that subsection 41-30(1) will not apply to exclude you from a fuel tax credit if the fuel is covered by the Opt-in Scheme - applicable from 1 July 2013. This would not apply to your circumstances as: · you are not excluded from a fuel tax credit by virtue of subsection 41-30(1) of the FTA and · only certain large users of liquid fuels can apply to the Clean Energy Regulator to opt into the carbon pricing mechanism (i.e. covered by the Opt-in Scheme). | Detailed Reasoning - Question 2 - Calculating your fuel tax credit: Section 43-5 of the FTA provides that the amount of your fuel tax credit for taxable fuel is the amount worked out based on the amount (but not below nil) of effective fuel tax less the amount of the carbon reduction. The amount of effective fuel tax that is payable on the fuel is the amount (but not less than nil) of fuel tax less any grant or subsidy. In your case the effective fuel tax is 38.143 cents per litre (cpl). Subsection 43-8(1) of the FTA provides that the amount of carbon reduction that applies to a particular quantity of fuel you acquire, manufacture or import is calculated using the following formula: Quantity of fuel x carbon price x carbon emission rate The carbon emission rate in relation to petrol is 0.0024 and the carbon price for the financial years commencing 1 July 2012, 1 July 2013 and 1 July 2014 is 2,300 cents, 2,415 cents and 2,540 cents respectively. Accordingly, the amount of the carbon reduction for the periods ending 30 June 2013, 30 June 2014 and 30 June 2015 is 5.52, 5.796 and 6.096 cents per litre respectively. Therefore, the rate of fuel tax credits you can claim for the relevant tax periods are: 1 July 2012 to 30 June 2013 - 32.623 cpl 1 July 2013 to 30 June 2014 - 32.347 cpl 1 July 2014 to 30 June 2015 - 32.047 cpl.