The fuel tax credit system implemented by the Fuel Tax Act 2006 (FT Act) and the Fuel Tax (Consequential and Transitional Provisions) Act 2006 commenced on 1 July 2006. It substantially replaced the Energy Grants Credits Scheme (EGCS), and the final changes introduced by the reforms will apply from 1 July 2012. The FT Act provides credits to eligible commercial fuel users (e.g. vehicle fleet owners, power generators) at a rate of either 18 cents or 38 cents per litre of fuel.
The fuel tax credit system provides a credit for fuel tax (excise duty) that is included in the price of taxable fuel. "Taxable fuel” is fuel in respect of which duty is payable under the Excise Act 1901 and the Excise Tariff Act 1921 or the Customs Act 1901 and the Customs Tariff Act 1995 subject to certain exceptions. Taxable fuel includes petrol and diesel fuel.
Under the FT Act, an entity that is registered for goods and services tax (GST) and acquires or manufactures in, or imports into Australia taxable fuel for use in eligible activities, is entitled to a fuel tax credit under the FT Act.
Draft Fuel Tax Ruling FTR 2007/D1, issued on 11 April 2007, explains the Commissioner’s preliminary view regarding the meaning in the FT Act of "acquire”, "manufacture”, and "import” in the expression "taxable fuel that you acquire or manufacture in, or import into, Australia to the extent you do so for use in carrying on your enterprise”.
FTR 2007/D1 also explains:
- the context of the fuel tax credit system
- the meaning of "taxable fuel”, and
- the meaning of "Australia”.
FTR 2007/D1 applies to the class of entities who acquire or manufacture in, or import into, Australia, taxable fuel to the extent they do so for use in carrying on an enterprise.
The Draft Ruling does not deal with an entity’s entitlement to a fuel tax credit if they acquire or manufacture in, or import into, Australia certain liquefied and compressed gaseous fuels to the extent that they do so for use in carrying on their enterprise, as these fuels do not begin to incur fuel tax until 1 July 2011.
This Draft Ruling is significant, as it will influence the range of potential claimants under the FT Act. Any company that uses fuel for commercial purposes including vehicles, power generators, agriculture or industrial processes should make themselves familiar with the Draft Ruling and the general availability of credits under the new legislation.
In addition to the FT Act, companies claiming credits should be aware that the "grandfather” provisions for claiming rebates under the EGCS will finish on 30 June 2007. This means that eligible rebates earned under the pre July 2006 scheme will no longer be available. Claims under EGCS must be lodged on or before 30 June 2007.
For further information, please complete the following form, or contact:
Zara Ritchie, Partner
PricewaterhouseCoopers Tax
Customs and Excise
Phone +61 3 8603 6386
zara.ritchie@au.pwc.com
Darryl Daisley, Director
PricewaterhouseCoopers Tax
Customs and Excise
Phone +61 8 9238 3341
darryl.daisley@au.pwc.com
Bill Cole, Senior Manager
PricewaterhouseCoopers Tax
Customs and Excise
Phone +61 3 8603 6043
bill.cole@au.pwc.com
Philip Magoffin, Director
PricewaterhouseCoopers Tax
Customs and Excise
Phone +61 7 3257 8722
philip.magoffin@au.pwc.com
Michael Roche, Senior Manager
PricewaterhouseCoopers Tax
Customs and Excise
Phone +61 2 8266 0184
michael.roche@au.pwc.com
