Private ruling: Fuel tax credits
Date of advice: 15 August 2018
Published: October 2018
Ruling period: 2016 - 17 income year | 2017 - 18 income year | 2018 - 19 income year | 2019 - 20 income year
Date scheme commenced: 1 July 2016

Ruling: Q1: Can the data extracted from the installed tracking device of your heavy vehicles be used for determining the location of the vehicles for fuel tax credit purposes and for working out the amount of fuel tax credit entitlement? | A1: Yes | Q2: Is it fair and reasonable to accept, without additional supporting documentation, that the data extracted from the installed tracking device has correctly classified the locations of the vehicles as a public road or non-public road? | A2: No | Q3: Is it fair and reasonable to use a 12-week tracking device data set that shows vehicles’ fuel consumption for travelling on a public road and non-public road at one of your work sites to derive the non-public road fuel consumption apportionment percentage and apply that apportionment percentage retrospectively to claim further fuel tax credits? | A3: No, the Commissioner does not prescribe a sampling size or set period that an entity must use for sampling. You are required to substantiate with evidence that the percentage of fuel used “off road” is a fair and reasonable representation of your fleet and the circumstances of your business operations.

Relevant facts and circumstances: You are registered for Goods and Services Tax. You engage in bulk haulage of soil and other types of material. You use vehicles exceeding 4.5 tonnes GVM (heavy vehicles) in this activity. The heavy vehicles begin their trip at the worksite whereby they are loaded with the relevant material. The heavy vehicles leave the worksite and travel along a public road to the road construction site. The vehicles travel along the road construction or maintenance site to a designated location where it unloads the relevant material, spreading it along the road under construction. After unloading the materials, the heavy vehicles travel on public roads to return to the worksite to repeat the trip. Your vehicles have recently been fitted with a Tracking device. The tracking device installed in your vehicles have inbuilt “coordinates” that are input by the independent third party who administers the tracking and recording service. The “coordinates” are inserted based on information supplied by you. The “coordinates” are pre-determined coordinates that allow for separation and categorisation of locations, that your vehicles travel in or along, public roads and non-public roads, such as details of when the vehicles leave a public road and enter into private property and/or a construction site which is not eligible for public access, i.e. a worksite or road construction site. The device also records the engine’s fuel consumption. The fuel consumption recorded is separated into “public road” and “non-public road” uses based on the “Coordinates”. You will use a 12-week data set that shows vehicles’ fuel consumption for travelling on a public road and non-public road at one of your work sites to calculate a percentage of “non-public road” fuel usage to be applied in the retrospective claim. You advised you have taken into consideration the variance of work conducted by the trucks and the different roads/sites that the truck operates on. You will also take any amount of fuel tax credit entitlement that you have already claimed into account in any retrospective claim. Once all the retrospective claims have been finalised, the GPS tracking device will be used as an actual fuel usage measure for individual vehicles for future claims. Assumption Data that has been obtained using tracking device technology in the heavy vehicles has correctly classified roads as public and non-public roads for working out the fuel tax credit entitlement that is not reduced by the road user charge (RUC) under subsection 43-10(3) of the FTA.

Relevant legislative provisions: Fuel Tax Act 2006 section 41-5 | Fuel Tax Act 2006 section 47-5 | Fuel Tax Act 2006 subsection 43-10(3) | Fuel Tax Act 2006 subsection 65-5(1)

Reasons for decision: Summary: In Fuel Tax Determination 2010/1 Fuel tax: is apportionment used when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 ?(FTD 2010/1) , it is explained that entities may need to use a 'fair and reasonable' apportionment method to calculate the extent of their entitlement to a fuel tax credit. The Commissioner recognises the use of related technology to confirm relevant information as a known reliable measure for calculating the amount of taxable fuel acquired for use in an eligible activity. The use of reports generated by relevant technology may also be used as a means of record keeping. Essentially, the use of this technology is a recognised means of reporting data relevant to the calculation of the fuel tax credit claim but not determinative of a fair and reasonable claim. Your vehicles have recently been fitted with a Tracking device. The tracking device installed in your vehicles have inbuilt “Coordinates” that are input by the independent third party who administers the tracking and recording service. The Coordinates are inserted based on information supplied by you. The “Coordinates” are pre-determined coordinates that allow for separation and categorisation of locations, that your vehicles travel in or along, public roads and non-public roads, such as details of when the vehicles leave a public road and enter into private property and/or a construction site which is not eligible for public access, i.e. a worksite or road construction site. The tracking device also records the engine’s fuel consumption. The fuel consumption recorded is separated into “public road” and “non-public road” uses based on the “Coordinates”. You will use a 12-week data set that shows vehicles’ fuel consumption for travelling on a public road and non-public road at one of your work sites to calculate a percentage of “non-public road” fuel usage to be applied in the retrospective claim. You will also take any amount of fuel tax credit entitlement that you have already claimed into account in any retrospective claim. The Commissioner does not prescribe a sampling size or period that an entity must use. You are required to demonstrate that the sampling of vehicles used for the fuel tracking is a reasonable representation of the fleet that were used at your work site, and that the sampling length of the tracking period will show a consistent fuel usage throughout the business operations at this particular site. To the extent that fuel is consumed by your heavy vehicle for travelling on a non-public road in the course of carrying on your business, you are entitled to claim fuel tax credits at the full rate. You may use the tracking device records of the fuel usage whilst the vehicle is located on a non-public road as a means of calculating the apportionment of fuel used by your heavy vehicles. However you will nevertheless remain obligated to ensure that the apportionment of the fuel tax credit claim is fair and reasonable by ensuring that in analysing the data, the location of the vehicle when the fuel is used is appropriately determined to be either a public road or a non-public road area. You will also need to keep all the appropriate records to substantiate any claim. By way of further information, the Practical Compliance Guideline 2016/8 Fuel Tax Credits – apportioning fuel for fuel tax credits (PCG 2016/8) provides some acceptable, practical methodologies to assist taxpayers in apportioning taxable fuel to meet their fuel tax credit obligations. It also explains various principles, measures and factors that may be applied to determine if other methods used are also 'fair and reasonable.'