Issue
Does the 4-year time limit in section 105-55 of Schedule 1 to the Taxation Administration Act 1953 (TAA) apply to a notification of entitlement to a refund, where the refund is of a net fuel amount for a fuel tax return period that arises because of a decreasing fuel tax adjustment under Item 9 of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (Fuel Tax Transitional Act)?
Decision
Yes, the 4-year time limit in section 105-55 of Schedule 1 to the TAA applies to a notification of entitlement to a refund where the refund is of a net fuel amount that arises because of a decreasing fuel tax adjustment under Item 9 of Schedule 3 to the Fuel Tax Transitional Act.
Facts
An entity is neither registered for goods and services tax (GST) nor required to be registered for GST.
The entity purchased a quantity of on-road diesel fuel prior to 1 July 2006 for which it is entitled to an on-road credit under the Energy Grants (Credits) Scheme Act 2003 (Energy Grants Act).
The entity has not claimed an energy grant in relation to this credit under section 15 of the Product Grants and Benefits Administration Act 2000 (PGBAA).
The entity realises after 1 July 2009 that it has not attributed the amount of the credit as a decreasing fuel tax adjustment to a fuel tax return period ending before 1 July 2009.
The entity chooses to attribute the decreasing fuel tax adjustment to their fuel tax return period ending 30 June 2009.
The entity's net fuel amount for the fuel tax return period ended 30 June 2009 (without taking into account the decreasing fuel tax adjustment) is a negative amount, with reference to section 61-5 of the Fuel Tax Act 2006 (FTA).
Paragraph 105-55(3)(c) of Schedule 1 to the TAA dealing with fraud and evasion does not apply.
Reasons for Decision
Item 9 of Schedule 3 to the Fuel Tax Transitional Act provides a method for an entity to claim its entitlement to a credit under the Energy Grants Act for an on-road or an off-road credit for diesel fuel purchased or imported between 1 July 2003 and 30 June 2006.
Where an entity has not made a claim for payment of an energy grant in relation to the credit under section 15 of the PGBAA, it is able to claim the amount of the credit as a decreasing fuel tax adjustment under the fuel tax regime pursuant to item 9 of Schedule 3 to the Fuel Tax Transitional Act.
Subitem 9(3) of Schedule 3 to the Fuel Tax Transitional Act provides that the decreasing fuel tax adjustment must be attributed to a fuel tax return period, of the entity's choice, that ends before 1 July 2009.
Section 105-55 of Schedule 1 to the TAA places a time limit on entitlements to refunds and credits to which subsections 105-55(1) and 105-55(3) apply.
Subsection 105-55(3) of Schedule 1 to the TAA applies to entities that are neither registered for GST nor required to be registered. These entities are not entitled to a refund or fuel tax credit in respect of a fuel tax return period unless, within four years after the end of the fuel tax return period, or the acquisition, manufacture or importation; • the entity notifies the Commissioner of their entitlement to the refund or credit; or • the Commissioner notifies the entity that they are entitled to the refund or credit.
Subsection 105-55(4) of Schedule 1 to the TAA provides that subsection 105-55(3) applies to a refund under section 61-5 of the FTA in respect of a particular fuel tax return period. (Subsection 105-55(4) of Schedule 1 to the TAA also provides that subsection 105-55(3) of Schedule 1 to the TAA applies to fuel tax credits).
Under the heading 'Entitlement to a refund', section 61-5 of the FTA provides that if an entity's net fuel amount for a fuel tax return period is less than zero, the Commissioner must pay that amount to the entity.
The phrase 'net fuel amount' in subsection 61-5(1) of the FTA is defined as having the meaning given by section 60-5 of the FTA.
Section 60-5 of the FTA provides that a net fuel amount is worked out using the formula: Total fuel tax - Total fuel tax credits + Total increasing fuel tax adjustments - Total decreasing fuel tax adjustments
Total fuel tax | - | Total fuel tax credits | + | Total increasing fuel tax adjustments | - | Total decreasing fuel tax adjustments
In this case, the entity's net fuel amount is already negative prior to taking into account the decreasing fuel tax adjustment pursuant to Item 9 of Schedule 3 to the Fuel Tax Transitional Act. Therefore, the decreasing fuel tax adjustment would serve to increase the entity's refund.
Accordingly, subsection 105-55(3) of Schedule 1 to the TAA is applicable. Therefore, the entity is not entitled to the refund that would result from the decreasing fuel tax adjustment unless the entity notifies the Commissioner that they are entitled to the refund within four years of the end of the fuel tax return period they choose that ends before 1 July 2009.
In this case, for the entity to receive a refund they must notify the Commissioner before 1 July 2013 that they are attributing the decreasing fuel tax adjustment to the tax period ending 30 June 2009.