Fuels eligible for fuel tax credits
To be eligible for claiming fuel tax credits, a fuel must be taxable. That is, fuel tax (excise or customs duty) must be paid on it.
You can use our Fuel tax credit eligibility tool to check if your fuel – and activities –are eligible.
See when you can claim fuel tax credits for liquid fuels and gaseous fuels.
Liquid fuels
Eligible liquid fuels include:
- Petrol – for example, unleaded, premium unleaded and high octane
- diesel
- other fuels such as
- fuel oil – a heavier petroleum product used in industrial furnaces, ships and locomotives
- kerosene
- mineral turpentine
- white spirit
- toluene
- heating oil
- some solvents.
You can claim fuel tax credits for fuel blends. The rate you can claim depends on the amount of biodiesel or ethanol in each blend.
For some business activities (for example, packaging or fuel used for domestic home heating), you can only claim for certain taxable fuels.
Fuel used in aircraft
You cannot claim fuel tax credits for aviation fuels (aviation gasoline and aviation kerosene).
However, if you use diesel or petrol in an aircraft as part of your business activities, there may be circumstances where you can claim fuel tax credits. For example, if you are registered for GST and can provide details that the fuel was not entered into home consumption as fuel for use in an aircraft at the time of purchase, then you're likely entitled to claim.
If you are unsure whether you can claim fuel tax credits for fuel used in your aircraft, you can phone us.
Gaseous fuels
You may be able to claim fuel tax credits for eligible gaseous fuels used in your business activities.
Gaseous fuels are:
- liquefied petroleum gas (LPG)
- liquefied natural gas (LNG)
- compressed natural gas (CNG).
Gaseous fuels are sold as either:
- transport gaseous fuels inclusive of excise or customs duty in the price (duty paid)
- non-transport gaseous fuels exclusive of excise or customs duty in the price (not duty paid).
Transport gaseous fuels (duty paid)
You can claim fuel tax credits on transport gaseous fuels because duty has been paid on them.
Transport gaseous fuels include:
- LPG or LNG intended for use in an internal combustion engine of a motor vehicle or vessel (boat), either directly or by filling another tank connected to such an engine
- CNG that is imported or compressed for use as a fuel in a motor vehicle
- all gaseous fuels for mixed use (that is, both transport and non-transport use) or when the end use is unknown.
Transport gaseous fuels are not limited to use in transport activities. They can also be used in all other business activities that are undertaken off a public road.
When claiming fuel tax credits for gaseous fuels, you need to keep records to substantiate that fuel tax (excise duty) has been paid on the fuel.
Non-transport gaseous fuels (not duty paid)
Non-transport gaseous fuels that are not duty paid are not eligible for fuel tax credits. In other words, you can't claim fuel tax credits for them.
Non-transport gaseous fuels include:
- LPG and LNG delivered only for use other than in an internal combustion engine of a motor vehicle or vessel (for example, in residential heating or burner applications)
- LPG delivered for use in forklifts
- CNG imported or compressed only for use in forklifts or not for use as a fuel in a motor vehicle
- CNG compressed at a residential premises (including for use in a motor vehicle) using equipment capable of compression at a rate not more than 10kg of natural gas per hour and not for sale.
If you have been supplied bulk non-transport LPG that hasn't had excise or customs duty paid on it (such as a delivery of containers of 210 kg capacity or more) the tax invoice will include the following:
'Not to be used, or supplied, for transport use. Penalties apply.'
A supplier does not need to supply a notice when the LPG is supplied:
- in or into a container of 210 kgs capacity or less
- to residential premises and is not for business use.
Example: LPG supplied for use in agriculture
Paul owns a farm and purchases LPG to dry his grain. The fuel invoice does not include the notice 'Not to be used, or supplied, for transport use. Penalties apply'.
Paul purchases LPG in containers less than 210 kg and is unsure if the fuel was supplied to him inclusive of duty.
Paul contacts the fuel supplier to clarify. The fuel supplier confirms the fuel was supplied exclusive of duty.
Paul is not entitled to claim fuel tax credits for the use of the LPG in his business activities.
End of example