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Fuel Tax Bill 2006

Part 3-1 Basic rules

Division 40 Object of this Chapter

Table of Subdivisions

40-A     Object of this Chapter

Subdivision 40-A Object of this Chapter

Table of Sections

40-5          Object of this Chapter

40-5   Object of this Chapter

             (1)  The object of this Chapter is to provide a single system of fuel tax credits to ensure that, generally, fuel tax is effectively only applied to:

                     (a)  fuel used in private vehicles and for certain other private purposes; and

                     (b)  fuel used on-road in light vehicles for business purposes.

             (2)  To do this, a fuel tax credit is provided to reduce or remove the incidence of fuel tax applied to:

                     (a)  fuel used in * carrying on your * enterprise (other than fuel used on-road in light vehicles); and

                     (b)  fuel used for domestic heating and domestic electricity generation; and

                     (c)  fuel packaged for use other than in an internal combustion engine.

Note:          However, other provisions of this Act might affect your entitlement to a fuel tax credit.



 

Division 41 Fuel tax credits for business taxpayers and non-profit bodies

Table of Subdivisions

             Guide to Division 41

41-A     Entitlement rules for fuel tax credits

41-B      Disentitlement rules for fuel tax credits

Guide to Division 41

41-1   What this Division is about

Fuel tax credits are provided under Subdivision 41-A to business taxpayers who are registered, or required to be registered, for GST (and to some non-profit bodies) in 2 situations.

The first situation is where you acquire, manufacture or import fuel to use in carrying on your enterprise (whether the fuel is used as fuel or otherwise). The second situation is where you acquire, manufacture or import fuel to make a taxable supply to a private user for domestic heating or to package the fuel for the purpose of making a taxable supply of it for use other than in an internal combustion engine.

However, fuel tax credits are denied under Subdivision 41-B if:

               (a)     another person is already entitled to a fuel tax credit in respect of the fuel; or

              (b)     the fuel is for use on-road in light vehicles; or

               (c)     the fuel is for use in vehicles that do not meet certain environmental criteria; or

              (d)     the fuel is for use in aircraft.

Subdivision 41-A Entitlement rules for fuel tax credits

Table of Sections

41-5          Fuel tax credit for fuel to be used in carrying on your enterprise

41-10        Fuel tax credit for fuel to be sold or packaged

41-5   Fuel tax credit for fuel to be used in carrying on your enterprise

             (1)  You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that you do so for use in * carrying on your * enterprise.

Note 1:       Other provisions can affect your entitlement to the credit. (For example, see Subdivisions 41-B and 45-A of this Act and Part 3 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 .)

Note 2:       Fuel is taken to have been used if it is blended as specified in a determination made under section 95-5.

Registration for GST

             (2)  However, you are only entitled to the fuel tax credit if, at the time you acquire, manufacture or import the fuel, you are * registered for GST, or * required to be registered for GST.

             (3)  Subsection (2) does not apply if, at the time you acquire, manufacture or import the fuel:

                     (a)  you are a non-profit body; and

                     (b)  you acquire, manufacture or import the fuel for use in a vehicle (or vessel) that:

                              (i)  provides emergency services; and

                             (ii)  is clearly identifiable as such.

41-10   Fuel tax credit for fuel to be sold or packaged

             (1)  You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that:

                     (a)  you do so to make a * taxable supply of the fuel to an entity; and

                     (b)  the fuel is kerosene, heating oil or any other fuel prescribed by the regulations; and

                     (c)  you have a reasonable belief that the entity:

                              (i)  will not use the fuel in * carrying on an * enterprise; but

                             (ii)  will use the fuel for domestic heating.

             (2)  You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that:

                     (a)  you do so to package the fuel, in accordance with the regulations, for the purpose of making a * taxable supply of the fuel for use other than in an internal combustion engine; and

                     (b)  the fuel is kerosene, mineral turpentine, white spirit or any other fuel prescribed by the regulations.

Subdivision 41-B Disentitlement rules for fuel tax credits

Table of Sections

41-15        No fuel tax credit if another entity was previously entitled to a credit

41-20        No fuel tax credit for fuel to be used in light vehicles on a public road

41-25        No fuel tax credit for fuel to be used in motor vehicles that do not meet environmental criteria

41-30        No fuel tax credit for fuel to be used in aircraft

41-15   No fuel tax credit if another entity was previously entitled to a credit

             (1)  You are not entitled to a fuel tax credit for taxable fuel if it is reasonable to conclude that another entity has previously been entitled to a fuel tax credit, or a * decreasing fuel tax adjustment, for the fuel.

             (2)  However, subsection (1) does not apply if it is also reasonable to conclude that another entity had, in respect of the credit, an * increasing fuel tax adjustment of the * amount of the credit.

41-20   No fuel tax credit for fuel to be used in light vehicles on a public road

                   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.

Note:          If you acquire a vehicle of 4.5 tonnes before 1 July 2006, you might be entitled to the credit under Part 4 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 .

41-25   No fuel tax credit for fuel to be used in motor vehicles that do not meet environmental criteria

             (1)  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 * motor vehicle, unless the vehicle meets one of the following criteria:

                     (a)  it is manufactured on or after 1 January 1996;

                     (b)  it is registered in an audited maintenance program that is accredited by the * Transport Secretary;

                     (c)  it meets Rule 147A of the Australian Vehicle Standards Rules 1999;

                     (d)  it complies with a maintenance schedule that is endorsed by the Transport Secretary.

             (2)  Subsection (1) does not apply to a * motor vehicle:

                     (a)  that is used:

                              (i)  in carrying on a * primary production business; and

                             (ii)  primarily on an agricultural property; or

                     (b)  that is not powered by a diesel engine; or

                     (c)  that is not used on a public road.

41-30   No fuel tax credit for fuel to be used in aircraft

                   You are not entitled to a fuel tax credit for taxable fuel that you acquire, manufacture or import for use as fuel in aircraft if the fuel was entered for home consumption for that use (within the meaning of the Excise Act 1901 or the Customs Act 1901 , as the case requires).



 

Division 42 Fuel tax credit for non-business taxpayers

Table of Subdivisions

             Guide to Division 42

42-A     Fuel tax credit for non-business taxpayers

Guide to Division 42

42-1   What this Division is about

Fuel tax credits are provided under this Division to non-business taxpayers. Currently, a credit is only provided for fuel to be used by you for generating electricity for domestic use.

Subdivision 42-A Fuel tax credit for non-business taxpayers

Table of Sections

42-5          Fuel tax credit for fuel to be used in generating electricity for domestic use

42-5   Fuel tax credit for fuel to be used in generating electricity for domestic use

                   You are entitled to a fuel tax credit for taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that you do so for use by you in generating electricity for domestic use.

Note:          If you are carrying on an enterprise, you might be entitled to a credit under section 41-5.



 

Division 43 Working out your fuel tax credit

Table of Subdivisions

             Guide to Division 43

43-A     Working out your fuel tax credit

Guide to Division 43

43-1   What this Division is about

The amount of your credit for taxable fuel is the amount of fuel tax that was payable on the fuel, reduced to take account of certain grants and subsidies that were payable in respect of the fuel (as the grants or subsidies reduced the amount of fuel tax that effectively applied to the fuel).

In some cases, the credit is reduced so that some of the fuel tax can be retained to fund cleaner fuel grants and as a road user charge.

Subdivision 43-A Working out your fuel tax credit

Table of Sections

43-5          Working out your fuel tax credit

43-10        Reducing the amount of your fuel tax credit

43-5   Working out your fuel tax credit

             (1)  The * amount of your fuel tax credit for taxable fuel is the amount of * effective fuel tax that is payable on the fuel.

Note:          The amount of the credit might be reduced under section 43-10.

Amount of effective fuel tax

             (2)  The * amount of effective fuel tax that is payable on the fuel is the amount (but not below nil) worked out using the following formula:

where:

fuel tax amount means the * amount of fuel tax that was or would be payable on the fuel:

                     (a)  if you are * registered for GST, or * required to be registered for GST—at the rate in force at the beginning of the * tax period to which the credit is attributable; and

                     (b)  if you are not registered for GST, nor required to be registered for GST—at the rate in force on the day on which the Commissioner receives your return relating to the fuel.

Note:          Division 65 sets out which tax period a credit is attributable to.

grant or subsidy amount means the * amount of any grant or subsidy that was or would be payable in respect of the fuel by the Commonwealth:

                     (a)  if you are * registered for GST, or * required to be registered for GST—at the rate in force at the beginning of the * tax period to which the credit is attributable; and

                     (b)  if you are not registered for GST, nor required to be registered for GST—at the rate in force on the day on which the Commissioner receives your return relating to the fuel.

Note 1:       Division 65 sets out which tax period a credit is attributable to.

Note 2:       Subsection (4) affects how this formula applies to some blends of petrol or diesel.

Exclusions from grant or subsidy amount

             (3)  In applying subsection (2), the following grants are disregarded:

                     (a)  a grant under the Biofuels Capital Grants Program;

                     (b)  a grant for on-road alternative fuel under the Energy Grants (Credits) Scheme Act 2003 ;

                     (c)  a grant for petrol or diesel under the Energy Grants (Cleaner Fuels) Scheme Act 2004 ;

                     (d)  a benefit under the Product Stewardship (Oil) Act 2000 .

Amount of effective fuel tax for blends of petrol and diesel

             (4)  The effective fuel tax for taxable fuel that:

                     (a)  is a blend of more than one kind of fuel; and

                     (b)  meets a fuel standard, under the Fuel Quality Standards Act 2000 , for petrol or diesel;

is worked out under subsection (2) as if the fuel were entirely that kind of petrol or diesel (as the case requires).

43-10   Reducing the amount of your fuel tax credit

Cleaner fuel grants

             (1)  The * amount of your fuel tax credit for taxable fuel is reduced to the extent, determined by the Minister, that fuel tax is imposed on the fuel to fund a cleaner fuel grant.

             (2)  For the purposes of subsection (1), the Minister must determine, by legislative instrument, the * amount of the fuel tax imposed that will fund a cleaner fuel grant.

Road user charge

             (3)  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, determined by the * Transport Minister.

Note:          Only certain motor vehicles whose gross vehicle mass is more than 4.5 tonnes are entitled to any credit (see sections 41-20 and 41-25).

             (4)  However, the * amount is not reduced under subsection (3) if the vehicle’s travel on a public road is incidental to the vehicle’s main use.

             (5)  For the purposes of subsection (3), the * Transport Minister must determine, by legislative instrument, the * amount of the road user charge.

Working out the amount of the reduction

             (6)  The * amount by which a fuel tax credit for taxable fuel is reduced under subsection (1) or (3) is worked out by reference to the rate of fuel tax or road user charge in force:

                     (a)  if you are * registered for GST, or * required to be registered for GST—at the beginning of the * tax period to which the credit is attributable; and

                     (b)  if you are not registered for GST, nor required to be registered for GST—on the day on which the Commissioner receives your return relating to the fuel.

Note:          Division 65 sets out which tax period a credit is attributable to.



 

Division 44 Increasing and decreasing fuel tax adjustments

Table of Subdivisions

             Guide to Division 44

44-A     Increasing and decreasing fuel tax adjustments

Guide to Division 44

44-1   What this Division is about

Your entitlement to a fuel tax credit for taxable fuel is worked out on the basis of what the fuel is intended for when you acquire, manufacture or import the fuel.

If you use or supply the fuel differently, or you do not use or supply the fuel at all, you have an increasing or decreasing fuel tax adjustment.

Fuel tax adjustments are included in working out your net fuel amount under Division 60. (Your net fuel amount determines how much you owe the Commissioner or the Commissioner owes you.)

Note:          There is also a decreasing fuel tax adjustment under Division 45 (Greenhouse Challenge Plus Programme).

Subdivision 44-A Increasing and decreasing fuel tax adjustments

Table of Sections

44-5          Increasing and decreasing fuel tax adjustments for change of circumstances

44-10        Increasing fuel tax adjustment for failure to use or make a taxable supply of fuel

44-5   Increasing and decreasing fuel tax adjustments for change of circumstances

             (1)  You have a * fuel tax adjustment if you use fuel, or make a * taxable supply of fuel, in circumstances where, if you had originally acquired, manufactured or imported the fuel to use or make a taxable supply in those circumstances, the * amount of the fuel tax credit to which you would have been entitled would have been different from the amount to which you are or were entitled.

             (2)  The * amount of the adjustment is the difference between the 2 amounts.

Note:          Division 65 sets out which tax period or fuel tax return period the fuel tax adjustment is attributable to.

Decreasing fuel tax adjustments

             (3)  The * fuel tax adjustment is a decreasing fuel tax adjustment if the * amount to which you would have been entitled is greater than the amount to which you are or were entitled.

Increasing fuel tax adjustments

             (4)  The * fuel tax adjustment is an increasing fuel tax adjustment if the * amount to which you are or were entitled is greater than the amount to which you would have been entitled.

Example:    You acquire taxable fuel to use in a harvester in carrying on your farming enterprise, so you are paid a fuel tax credit for the fuel. Later on, you use the fuel to transport wheat in a vehicle of more than 4.5 tonnes travelling on a public road. As your fuel tax credit would have been reduced by the amount of the road user charge, you have an increasing fuel tax adjustment of the difference between the 2 amounts.

44-10   Increasing fuel tax adjustment for failure to use or make a taxable supply of fuel

                   You have an increasing fuel tax adjustment if:

                     (a)  you are or were entitled to a fuel tax credit for taxable fuel; and

                     (b)  you have no reasonable prospect of using, or making a * taxable supply of, the fuel.

The * amount of the adjustment is the amount of the credit that you are or were entitled to.

Example:    You acquire taxable fuel to use in a harvester in carrying on your farming enterprise, so you are paid a fuel tax credit for the fuel. Later on, the fuel is stolen. You have an increasing fuel tax adjustment of the amount of the credit.

Note:          Division 65 sets out which tax period or fuel tax return period the fuel tax adjustment is attributable to.