Making an adjustment may increase or decrease your fuel tax credit entitlement.
If an adjustment results in an increase in your fuel tax credit amount, then you include the dollar amount of the adjustment at label 7D (Fuel tax credit) when completing your business activity statement (BAS).
If an adjustment results in a decrease in your fuel tax credit amount, then you have been overpaid fuel tax credits. Include this dollar amount at label 7C (Fuel tax credit over claim) on your BAS. A decrease may mean you have to repay a debt to us.
Types of adjustments
You may have to make a fuel tax credit adjustment on your BAS for a number of reasons. The table below outlines how to make an adjustment in a range of situations.
Type of adjustment |
Increase or decrease in fuel tax credit amount |
Which label to complete on your BAS |
When to make the adjustment |
|---|---|---|---|
Used more fuel for an activity than intended. See Example 1 |
Increase |
Label 7D |
On the BAS for the tax period in which you become aware of the actual use of the fuel. |
Used less fuel for an activity than intended. See Example 2 |
Decrease |
Label 7C |
On the BAS for the tax period in which you become aware of the actual use of the fuel. |
Used the fuel for a different activity than intended, increasing your fuel tax credit amount. See Example 3 |
Increase |
Label 7D |
On the BAS for the tax period in which you become aware of the actual use of the fuel. |
Used the fuel for a different activity than intended, decreasing your fuel tax credit amount. See Example 4 |
Decrease |
Label 7C |
On the BAS for the tax period in which you become aware of the actual use of the fuel. |
Type of adjustment |
Increase or decrease in fuel tax credit amount |
Which label to complete on your BAS |
When to make the adjustment |
|---|---|---|---|
Claimed for fuel and it was later lost, stolen or otherwise disposed of, decreasing your fuel tax credit amount. See Example 5 |
Decrease |
Label 7C |
On the BAS for the tax period in which you become aware of the loss, theft or disposal of the fuel. |
Note: When calculating your fuel tax credits, use the fuel tax credit rate that applied at the time you acquired the fuel.
If you pay your GST in instalments and are registered for fuel tax credits, special rules apply. Under these rules, an adjustment may be delayed to a later reporting period.
Examples of adjustments
Example 1: change in the use of fuel – used more fuel than intended, increasing fuel tax credit amount
Peter has a ground maintenance business. He buys 1,500 litres of petrol on 21 November 2021. He intends to use:
- 500 litres in his slashers and mowers (eligible for fuel tax credits)
- 1,000 litres in his 2–tonne petrol truck that travels on public roads (ineligible for fuel tax credits).
Peter claims fuel tax credits on his December quarterly BAS of $216 (500 × $0.433) for his intended use of petrol in the slashers and mowers.
On 15 January 2022, Peter sells his truck and buys a 2–tonne diesel utility for the same use (also ineligible for fuel tax credits). He decides to use the remaining petrol (1,000 litres) in his slashers and mowers.
Peter can make an adjustment that will increase his fuel tax credit amount by $433 (1,000 × $0.433). He does this by including the amount at label 7D (Fuel tax credit) in his March 2022 quarterly BAS. This is the reporting period in which he becomes aware of the changed use of the fuel.
End of example
Example 2: change in the use of fuel – used less fuel than intended, decreasing fuel tax credit amount
Chris has an earthmoving business. On 21 November 2021, he buys 4,000 litres of diesel intending to use it in his front-end loader and backhoe working on-site (eligible for fuel tax credits). Chris claims fuel tax credits of $1,732 (4,000 × $0.433) on his December quarterly BAS.
In January 2022, Chris changes his business activities. He sells his backhoe and uses 2,000 litres of the diesel in his one-tonne utility driving between sites. Chris uses less fuel in an eligible activity than he claims for, as the actual use of the 2,000 litres in his utility is ineligible for fuel tax credits.
Chris decreases his fuel tax credit amount by $866 (2,000 × $0.433) at label 7C (Fuel tax credit over claim) on his March quarterly BAS. This is the reporting period in which he becomes aware of the changed use of the fuel.
End of example
Example 3: change in the use of fuel – used for a different eligible use, increasing fuel tax credit amount
Sandra has a primary production business. On 15 November 2021, she buys 5,000 litres of diesel. She intends to use:
- 2,000 litres in her 10–tonne truck, carrying produce to the railhead
- 3,000 litres in her tractors and harvester.
Both activities are eligible for fuel tax credits. Sandra claims $1,637 on her BAS for the December 2021 quarter [(2,000 × $0.169 = $338.00) plus (3,000 × $0.433 = $1,299.00)].
In January 2022, her truck breaks down. Sandra has only used 1,000 litres in her truck. She uses the remaining 1,000 litres (intended for her truck) in her tractors and harvester instead. As Sandra has used the fuel for a different use than intended, her actual fuel tax credit amount should be $1,901 (1,000 × $0.169 = $169.00) plus (4,000 × $0.433 = $1,732).
Sandra claims an increase in her fuel tax credit amount of $264 ($1,901 − $1,637) at label 7D (Fuel tax credit) on her March quarterly BAS. This is the reporting period in which she becomes aware of the changed use of the fuel.
End of example
Example 4: change in the use of fuel – used for a different eligible use, decreasing fuel tax credit amount
Leo is a commercial fisher and only uses his boat for business purposes. He buys 12,000 litres of diesel on 28 November 2021, intending to use it in his commercial fishing boat (eligible for fuel tax credits). Leo claims fuel tax credits of $5,196 (12,000 litres × $0.433) on his December quarterly BAS.
In January 2022, Leo uses 1,000 litres of the diesel in his 10-tonne truck, which he uses to transport his catch to the market. Leo has used the fuel for a different eligible use than intended, decreasing his fuel tax credit amount. As it has a different rate, Leo is only entitled to $0.169 per litre for the 1,000 litres he used in the truck. Leo calculates the adjustment by subtracting his actual amount from the original amount of fuel tax credits he claimed.
Leo’s actual fuel tax credit amount is $4,932 [(11,000 × $0.433 = $4,763) plus (1,000 × $0.169 = $169.00)].
Leo decreases his fuel tax credit amount by $264 ($5,196 − $4,932) at label 7C (Fuel tax credit over claim) on his March 2022 quarterly BAS. This is the reporting period in which he becomes aware of the changed use of the fuel.
End of example
Example 5: fuel lost, stolen or otherwise disposed of, decreasing fuel tax credit amount
Gerry stores his diesel in a bulk tank at his earthmoving business. In November 2021, Gerry buys 5,000 litres intending to use it in his front-end loader (eligible for fuel tax credits). On his December quarterly BAS he claims fuel tax credits of $2,165 (5,000 × $0.433).
In January 2022, the tank is damaged, and Gerry estimates half his fuel (2,500 litres) is lost. Gerry cannot use that fuel in his business, so he is not entitled to fuel tax credits for the lost fuel.
Gerry decreases his fuel tax credit amount by $1,082 (2,500 × $0.433) at label 7C (Fuel tax credit over claim) on his March 2022 quarterly BAS. This is the reporting period in which he becomes aware of the loss of the fuel.
End of example