Issue
Does subitem 11(6) of Schedule 3 to the Fuel Tax (Consequential and Transitional Provisions) Act 2006 (Fuel Tax Transitional Act) apply in relation to fuel used in an activity that would have given rise to an entitlement to an on-road credit under the Energy Grants (Credits) Scheme Act 2003 (Energy Grants Act)?
Decision
No. Subitem 11(6) of Schedule 3 to the Fuel Tax Transitional Act does not apply. Subitem 11(3) of Schedule 3 to the Fuel Tax Transitional Act applies to the fuel used in the activity.
Facts
An entity acquires diesel fuel between 1 July 2008 and 30 June 2012 for use in carrying on its enterprise.
The entity operates a diesel powered truck with a gross vehicle mass (GVM) of over 4.5 tonnes.
The fuel will be used in the truck for travelling on roads that are not public roads.
The entity would have been entitled to an on-road credit under the Energy Grants Act in respect of fuel used in the truck for travelling on roads that are not public roads.
Reasons for Decision
Item 11 of Schedule 3 to the Fuel Tax Transitional Act deals with the entitlement to a fuel tax credit for taxable fuel acquired, manufactured or imported between 1 July 2008 and 30 June 2012.
Item 11 of Schedule 3 to the Fuel Tax Transitional Act does not apply if an entity acquires, manufactures or imports fuel for uses listed under sub subparagraphs 11(1)(b)(i) to (vi). Effectively this means that an entity is entitled to a fuel tax credit for fuel acquired, imported or manufactured on or after 1 July 2008 for such uses in accordance with the fuel tax credit entitlement rules contained in the Fuel Tax Act 2006 (Fuel Tax Act).
In this case, the use of fuel in the truck for travelling on roads that are not public roads is not a use covered by paragraph 11(1)(b) of Schedule 3 to the Fuel Tax Transitional Act. However, uses of fuel that do not fall within the ambit of paragraph 11(1)(b) may still give rise to a fuel tax credit entitlement pursuant to subitems 11(3) or 11(5) of Schedule 3 to the Fuel Tax Transitional Act.
Subitems 11(3) and 11(5) of Schedule 3 to the Fuel Tax Transitional Act provide entitlement to a fuel tax credit during the period 1 July 2008 to 30 June 2012 in circumstances that would have given rise to an on-road or off-road credit respectively under the Energy Grants Act. These subitems ensure that a fuel tax credit entitlement exists for all previous uses of fuel that would have given rise to an on-road or off-road credit under the Energy Grants Act.
Additionally, subitem 11(6) of Schedule 3 to the Fuel Tax Transitional Act provides entitlement to a fuel tax credit during the period 1 July 2008 to 30 June 2012 for uses of fuel that would not have given rise to an entitlement to an on-road or off-road credit under the Energy Grants Act.
Subitem 11(6) in Schedule 3 to the Fuel Tax Transitional Act only applies to provide entitlement to a fuel tax credit for half the amount it would have been under Division 43 of the Fuel Tax Act for a use of fuel where subitems 11(3) or (11)(5) of Schedule 3 to the Fuel Tax Transitional Act do not apply to that use of fuel.
In this case, subitem 11(3) of Schedule 3 to the Fuel Tax Transitional Act applies as the entity would have been entitled to an on-road credit under the Energy Grants Act for fuel used in the truck for travelling on a road that is not a public road. As subitem 11(3) of Schedule 3 to the Fuel Tax Transitional Act applies, the entity is taken for the purposes of section 43-10 of the Fuel Tax Act to have acquired the fuel for use in a vehicle for travelling on a public road.
Consequently, subitem 11(6) of Schedule 3 to the Fuel Tax Transitional Act does not apply to the fuel used in this activity.