Issue
Is the effective fuel tax for taxable fuel that is a blend of biodiesel and diesel worked out as if the fuel were diesel in accordance with subsection 43-5(4) of the Fuel Tax Act 2006 (FTA), if an approval that varies the fuel standard for automotive diesel in a specified way in respect of specified supplies of that fuel is granted to a person under the Fuel Quality Standards Act 2000 (FQSA) and the fuel supplied by that person (or another person specified in the approval) complies with the fuel standard as varied?
Decision
Yes. The effective fuel tax for taxable fuel that is a blend of biodiesel and diesel is worked out in accordance with subsection 43-5(4) of the FTA, if an approval that varies the fuel standard for automotive diesel in a specified way in respect of specified supplies of the fuel is granted under section 13 of the FQSA, and: • the fuel supplied is subject to the approval; • the fuel supplied complies with the fuel standard as varied by the approval; and • the conditions specified in the approval are met.
Facts
An entity acquired taxable fuel that was a blend of biodiesel and diesel for use in its enterprise.
The supply of the fuel was the subject of a grant of approval made under section 13 of the FQSA which varied the fuel standard for automotive diesel that is set out in the Fuel Standard (Automotive Diesel) Determination 2001.
The fuel complied with the standard for automotive diesel as varied by the approval.
The approval was subject to the following conditions: • the fuel, subject to the approval, was supplied to specified entities; and • the approval holder was required to notify the specified entities of how the fuel varied from the fuel standard made under section 21 of the FQSA.
The conditions specified in the approval were met.
The entity is registered for goods and services tax.
Reasons for Decision
Subsection 43-5(4) of the FTA deals with the amount of effective fuel tax for taxable fuel that is a blend of more than one kind of fuel. Paragraph 43-5(4)(b) of the FTA stipulates that the taxable fuel must meet 'a fuel standard, under the FQSA, for petrol or diesel.
The term 'fuel standard' is not defined in the FTA. Subsection 43-5(4) of the FTA refers to a fuel standard 'under the Fuel Quality Standards Act 2000 '. This reference creates a nexus with the term 'fuel standard' for the purposes of the FTA and a fuel standard for the purposes of the FQSA. Therefore, the term 'fuel standard' in subsection 43-5(4) is a reference to a fuel standard that is made under the FQSA.
Section 3 of the FQSA states that the objects of the Act are to regulate the quality of fuel supplied in Australia and to ensure that, where appropriate, information about fuel is provided when the fuel is supplied. To this end, the Minister administering the FQSA has made several determinations under section 21 of the FSQA that set out the fuel standards for particular fuels, including the Fuel Standard (Automotive Diesel) Determination 2001 (Determination) that sets out the fuel standard for automotive diesel.
The Minister administering the FQSA may also, under section 13 of the FQSA, grant an approval to a person that varies a fuel standard in a specified way in respect of specified supplies of the fuel by the person or any other person specified in the approval. The Minister has granted a number of such approvals. A Notice of such approval is published in the Commonwealth of Australia Gazette.
The term 'fuel standard' in paragraph 43-5(4)(b) of the FTA is a reference to the fuel standard that is made under the FQSA for petrol or diesel and therefore includes a fuel standard as varied under an approval granted under section 13 of the FQSA in relation to specified supplies of petrol or diesel by the person or persons specified in the approval.
Therefore, paragraph 43-5(4)(b) of the FTA will be met, in relation to specific supplies of a blend of more than one kind of fuel, for example biodiesel and diesel, where the Minister administering the FQSA, grants under section 13 of the FQSA: • an approval in writing to a person varying the automotive diesel fuel standard in a specified way in respect of those specified supplies of that fuel; and • the fuel supplied, that is subject to the approval, meets the automotive diesel fuel standard as varied by the approval; and • the conditions specified in the approval are met.