ATO Interpretative Decision
ATO ID 2007/156 (Withdrawn)
Excise
Fuel Tax Credits: adjustments - vehicle fails to satisfy the environmental criteria requirement when fuel is used in the vehicleFOI status: may be released
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This ATO ID is withdrawn and has been replaced by FTD 2019/1 Fuel tax: fuel tax credits - vehicles and satisfying environmental criteria.This document has changed over time. View its history.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does an entity have an increasing fuel tax adjustment, under section 44-5 of the Fuel Tax Act 2006 (FTA), if the entity's vehicle satisfied the environmental criteria in section 41-25 of the FTA at the time of acquiring fuel, but did not satisfy the environmental criteria when the fuel was used?
Decision
Yes. An entity has an increasing adjustment, under section 44-5 of the FTA if the entity's vehicle satisfied the environmental criteria in section 41-25 of the FTA at the time of acquiring the fuel, but did not satisfy the environmental criteria when the fuel was used.
Facts
An entity operates a motor vehicle with a gross vehicle mass (GVM) of over 4.5 tonnes that was manufactured before 1 January 1996.
The entity acquired taxable fuel for use in the vehicle.
The vehicle met the environmental criteria requirements of subsection 41-25(1) of the FTA, at the time the fuel was acquired for use in the vehicle for travelling on public roads.
The entity satisfied all other requirements for entitlement to a fuel tax credit in respect of the fuel.
The entity claimed a fuel tax credit entitlement for the fuel acquired for use in the vehicle.
When the entity subsequently used the fuel in the vehicle, the vehicle no longer satisfied the environmental criteria in subsection 41-25(1) of the FTA.
The exclusions from the requirement to satisfy environmental criteria contained in subsection 41-25(2) of the FTA are not relevant to this entity.
Reasons for Decision
Under section 41-5 of the FTA an entity is entitled to a fuel tax credit for taxable fuel that they acquire or manufacture in, or import into, Australia to the extent that they do so for use in carrying on their enterprise.
The FTA sets out a number of limitations on an entity's entitlement to fuel tax credits where fuel is acquired, manufactured, or imported for use in a vehicle travelling on a public road.
One limitation, set out in subsection 41-25(1) of the FTA, is that an entity is not entitled to the extent that it acquires, manufactures or imports the fuel for use in a motor vehicle, unless the vehicle meets one of a number of environmental criteria. (Subsection 41-25(2) of the FTA provides for a number of circumstances where this limitation does not apply, none of which are relevant in this instance).
The entity satisfied one of the environmental criteria at the time it acquired the fuel. The entity also satisfies all of the other requirements for entitlement to a fuel tax credit in respect of the fuel.
Therefore the entity was entitled to a fuel tax credit when it acquired the fuel and claimed the credit in its fuel tax return.
At the time the entity used the fuel, the vehicle no longer satisfied the environmental criteria in subsection 41-25(1) of the FTA.
Section 44-5 of the FTA provides that an entity has a fuel tax adjustment if it uses fuel, or makes a taxable supply of fuel, in circumstances where, if the entity had originally acquired, manufactured or imported the fuel in those circumstances, their entitlement would have been different from their actual entitlement.
If the entity had failed to satisfy the environmental criteria when it acquired the fuel, they would not have been entitled to a fuel tax credit. Therefore, their entitlement at the time they acquired the fuel would have been different from the amount claimed. It follows that, pursuant to section 44-5 of the FTA, the entity has an increasing fuel tax adjustment.
Date of decision: 10 July 2007
Legislative References:
Fuel Tax Act 2006
subsection 41-5
subsection 41-25
subsection 41-25(1)
subsection 41-25(2)
subsection 44-5
Keywords
FTC environmental measures
FTC fuel tax adjustment
FTC vehicle emissions
Fuel tax credits
Increasing fuel tax amount
ISSN: 1445-2782
| Date: | Version: | |
| 13 July 2007 | Original statement | |
| You are here | 7 February 2020 | Archived |